Karachi: The fresh disbursement of the subsidized scheme for housing finance and Prime Minister's Kamyab Jawan Youth Entrepreneurship Scheme (PMKJ-YES) has been put on hold by the State Bank of Pakistan (SBP). The central bank has taken the step in view of the prevailing macroeconomic challenges to minimize the budget deficit under the instruction of the IMF. The circular issued by the central bank on Thursday said, “It is advised that the Government of Pakistan is considering review/revise features of subject Scheme in light of recent developments in the macroeconomic scenario.”
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In this regard, the SBP has advised the banks and other financial institutions to put on hold the disbursement under Merta Pakistan Mera Ghar (MPMG) Scheme from Ist July to August 31, 2022. The statement explained further, “Accordingly, banks, development finance institutions, and microfinance banks are advised to put further disbursements under 'Mera Pakistan Mera Ghar (MPMG) on hold from July 01, 2022, till August 31, 2022. However, in those cases where partial disbursements have already been made till June 30, 2022, banks may release remaining disbursement under MPMG.”
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The experts believe that the decision of the government to review the mark-up subsidy scheme for housing finance seems to have been taken under the pressure of the IMF. The govt wants to curtail demand in the economy and ensure fiscal consolidation to minimize budget deficit.“It is advised that the Government of Pakistan is considering reviewing/revising features of the subject Scheme in light of recent developments in the macroeconomic scenario. Accordingly, banks participating as executing agencies under PMKJ-YES are advised to put on hold fresh disbursement from July 1, 2022, to July 15, 2022,”
It is pertinent to mention here that the previous government had a full-fledged plan to promote the housing and construction sector in the country. In this regard as of April 2022, the Banks increased housing and construction finance to more than Rs404 billion by March 31, 2022, compared to the previous year's figure of Rs204 billion. In Oct. 2020, the then government introduced the MPMG scheme for low to middle-income segments of society in both conventional and Islamic modes to enable banks to provide financing for the construction and purchase of houses at very low financing rates. Over the past couple of years, the banks showed great progress in approving and financing loans along with special incentives under the MPMG Scheme.
