Adequate housing is a basic human necessity, yet in Pakistan, the need for affordable housing greatly surpasses the available supply. Acknowledging the vital role of the construction sector in fostering economic growth and tackling the housing crisis, the Government of Pakistan has launched an ambitious plan to significantly boost the number of housing units in the upcoming years. To facilitate this goal, the State Bank of Pakistan (SBP) and the Government of Pakistan have rolled out the Mera Pakistan Mera Ghar (MPMG) scheme, an innovative initiative designed to turn affordable housing into a reality for low- and middle-income families.
Mera Pakistan Mera Ghar (MPMG) Scheme: An Overview
MPMG scheme started in October 2020, under the Government Markup Subsidy Scheme. This scheme provides low financing rates for eligible people to construct or purchase their homes. It was upgraded in March 2021, taking various stakeholders' feedback to broaden the coverage and reach.
Key Features
Financing Modes: Available in both conventional and Islamic banking modes.
Target Audience: Designed for low- and middle-income segments of the population.
Executing Partners: A collaborative effort between the State Bank of Pakistan, the Government of Pakistan, and the Naya Pakistan Housing and Development Authority (NAPHDA).
Financing Options
Under the MPMG scheme, individuals can avail financing for:
Purchasing a house, flat, or apartment.
Purchasing a plot and constructing a house on it.
Extending a pre-owned housing unit.
Constructing a house on an already owned plot.
Eligibility Criteria
To ensure the scheme benefits those most in need, the following eligibility criteria apply:
National Identification: All Pakistanis with valid CNIC or NICOP.
First-Time Homeowner: Applicants must be first-time house owners.
One-Time Benefit: Each individual can avail the subsidized house loan facility only once.
NAPHDA Projects: For NAPHDA projects, eligible candidates are shortlisted by NAPHDA and referred to banks upon request.
Loan Tenor and Types
Customers can choose a financing tenor ranging from 5 to 20 years. The scheme offers two main types of loans:
NAPHDA Projects
Non-NAPHDA Projects
For NAPHDA projects, financing is available for houses up to 125 square yards (5 Marla) or flats with a maximum covered area of 850 square feet. NAPHDA projects must not have a maximum market value of a housing unit at the time of financing approval of more than Rs. 3.5 million. The amount of financing varies with the project type and client needs, with a limit of Rs. 2.7 million in NAPHDA projects.
Financing Rates and Installments
The scheme’s subsidized rates make home financing accessible to a larger audience. For example:
Tier 1 (NAPHDA Projects):
3% financing rate for the first five years.
5% financing rate for the next five years.
KIBOR + up to 250 basis points for the remaining tenor.
Monthly installment examples for various financing amounts are as follows:
Required Documents
Applicants must provide the following documents based on their employment status:
Formal Salaried Persons
Loan Application Form (LAF) with CF Undertaking
Valid CNIC of applicant and co-partner
Salary slips and employment proof
Bank statements for the last six months
Undertaking for first-time homeownership
Formal Business and Informal Income Persons
Similar documentation is required, with income proof adjusted to reflect business or informal earnings. Banks have implemented income proxy models to facilitate applicants with informal income sources.
Regulatory Measures by State Bank of Pakistan
To ensure the success of the MPMG scheme, the SBP has put in place several regulatory measures:
Debt Burden Relaxation: This allows banks to use repayment surrogates for financing.
Informal Income Models: Banks are permitted to approve loans based on models that estimate informal income.
Personal Guarantees: Housing finance can be provided against third-party personal guarantees for a duration of up to one year.
Standardization: There are standardized forms for loan applications, facility offer letters, and property document requirements.
Technological Solutions: The development of advanced credit scoring models and data acquisition technologies is underway.
Complaint Management System: An online portal has been established with a maximum resolution time of 8 working days.
Participating Banks
Various banks across Pakistan are associated with the MPMG scheme, providing a wide range of housing finance. Prospective applicants can choose from multiple banks with customized solutions suited for them.
Help Desk and Helpline
In a bid to facilitate the applicants, SBP has established help desks in 16 of its field offices across the country. These desks assist in obtaining all necessary information to complete an application. Additionally, an online complaint portal provides a source through which complaints and issues can be resolved efficiently.
For further assistance, applicants can contact the helpline at:
+92 (0) 3377786786
Application Form: Click Here
To Apply Online: Click Here
Conclusion
The Mera Pakistan Mera Ghar scheme is a valuable move which seeks to solve the housing problems which Pakistan is facing. The initiative instead helps to realize the dream of billions in owning a home while boosting economic development through the construction industry. As long as the stakeholders stand firm and continue supporting and working with each other, the dream of well housed Pakistan can become a reality.