The government must take steps to increase the flow of loans to the real estate sector to ensure housing for every citizen in cities and elsewhere across the country, economists and banking and real estate experts said on Wednesday.
They said that in neighboring India, banks and non-banking financial institutions annually lend 10% of their loans to the housing sector, while the rate is only 3% in Bangladesh.
At the same time, barriers to lending in the housing sector must be overcome, they added.
Experts also pointed out that in order to qualify for housing loans, the mortgage documentation system in banks here is quite complicated. In addition to this, banks and non-banking financial institutions do not follow Bangladesh Bank guidelines on providing housing loans.
They said many people have become loan defaulters due to the impacts of Covid. There should now be a logical solution to this problem, the experts added.
They made the comments during a virtual discussion on the Housing Roundtable Series on Rebuilding the Post-Covid Economy through Housing Finance and Construction, co-hosted by the Policy Research Institute (PRI) and the International Finance Corporation (IFC).
PRI Executive Director Dr Ahsan H Mansur, who facilitated the program, said people regularly move from rural areas to cities in search of livelihoods. Especially since they are coming more and more to the capital.
They live in rented houses with high payments because adequate housing has not been secured for them, he added.
Concessional housing loans will help the government secure basic housing rights for every citizen and at the same time fulfill the condition of improved housing to move to a developing country, the economist said.
Keynote speaker Simon Christopher Walley, Senior Financial Sector Specialist at the World Bank, said the respective countries must ensure sustainable housing for their citizens in line with the conditions for implementing the Sustainable Development Goals by 2025.
Citing a World Bank study, he said a total of $16 trillion will be needed to provide sustainable housing. $3 trillion of which will come from citizens and the rest is to be provided by the government and various national and international banks and agencies.
Simon Walley said the government and banks must come forward to ensure sustainable housing in Bangladesh. There is no alternative, he added.
Speaking as the chief guest, Salman F Rahman, Prime Minister’s adviser for private industry and investment, said the government had undertaken multi-faceted projects to ensure housing for all. The Ashrayan project is one of them. In addition, the government is working to provide housing in the capital through various agencies such as Rajdhani Unnayan Kartripakkha (Rajuk).
He said the government would take all possible steps to ensure housing for all.
Nuzhat Anwar, IFC’s Acting Country Director for Bangladesh, Bhutan and Nepal; Allen Forlemu, IFC’s regional industrial director for Asia and the Pacific; Shaikh Shamsuddin Ahmed, Commissioner, Bangladesh Securities And Exchange Commission; Naser Ezaz Bijoy, National Managing Director of Standard Chartered Bank; Md Salim Uddin, Chairman of Bangladesh House Building Finance Corporation; Kulasekhare Chakravarthy, Managing Director of National Housing Bank, India; and Thierno Habib Hann, Global Housing Finance and Capital Markets at IFC WBG-Asia/Pacific Lead, also spoke during the program.