Miftah says reshaping MPMG scheme by next week

KARACHI: The government has planned to reshape and move toward with its subsidised housing financing scheme Mera Pakistan Mera Ghar (MPMG) to secure borrowers money, finance minister said on Saturday.

“Many people are writing to me that their loans were approved in the Mera Ghar scheme and that they have spent money based on that approval. I want to assure you that we are reshaping this scheme and no-one will lose their money," Ismail said via its official Twitter handle "We will resolve the issues within the next week.”

Last month, the SBP put on hold fresh disbursements under MPMG and Prime Minister's Kamyab Jawan youth entrepreneurship scheme (PMKJ-YES) which analysts say was an attempt to rein in the budget deficit to revive the International Monetary Fund (IMF) bailout.

The government is considering reviewing and revising features of MPMG in light of recent developments in the macroeconomic scenario,” the SBP said in a circular issued on June 30. It advised banks, development finance institutions, and microfinance banks to put further disbursements under 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, it added.

Banks almost doubled their housing and construction finance portfolio to Rs404 billion as of March 31, 2022, from Rs204 billion a year earlier, according to the SBP’s number released in April.

Banks showed strong progress in approving and disbursing the financing under the MPMG scheme against the manifold increase in applications by borrowers to avail of housing finance.

Till April 11, 2022, banks received applications for housing finance amounting to Rs409 billion, which was merely Rs57 billion a year ago, reflecting an increase of more than 7 times, it said.

In October 2020, the government augmented these efforts by introducing the MPMG scheme. Available in both conventional and Islamic modes, this scheme enables banks to provide financing for the construction and purchase of houses at very low financing rates for low to middle-income segments of the population.