Speakers at a roundtable on Wednesday emphasised reasonable mortgage, small and easy housing finance, development of bond and capital markets for home financing, targeted subsidies, planned urbanisation, and decentralisation of administration for ensuring affordable housing for all.

They said urbanisation planning should not be taken centring the capital Dhaka. Rather, the planning should be taken across the country, including villages.

The distinguished speakers opined that housing should be treated as an essential sector, and planning should be taken to develop an ecosystem for ensuring housing for all.

The government may facilitate a number of financial institutions to facilitate easy and affordable financing. Registration cost should be rationalised for affordable housing, they added.

Policy Research Institute of Bangladesh (PRI) organised the virtual roundtable on “Housing Finance – Part 2”, which is an IFC-led initiative and part of an ongoing housing-sector roundtable – “Rebuilding the Economy post-COVID through Housing Finance and Construction”.

Speaking as the chief guest, Prime Minister’s Private Industry and Investment Affairs Adviser Salman F. Rahman said urban planning should not be taken centring Dhaka. Rather, facilities of Dhaka should be taken to rural areas to ensure urban facilities there.

The government’s housing financing facilities, including House Building Finance Corporation, have failed to provide financing for a large portion of the country’s population.

He also noted that a few private commercial banks have successfully reached rural areas with home loans, and others should follow their success stories.

The banking company law should be amended to exclude bonds from the capital market exposure to help develop bond market, he added.

PRI Executive Director Dr. Ahsan H. Mansur moderated the event.

He said the country’s urban population growth is three times the average population growth here. The government needs to pay more attention to this area when they make urban planning.

Affordable housing for all would not be possible in a day, but the government should help create an ecosystem for affordable housing.

Dr. Mansur opined that housing should not be seen as a non-essential sector. In many countries it is the number one sector in terms of contribution to growth.

Institutional infrastructure should be set at first for creating a congenial housing ecosystem, he noted.

Kulasekhare Chakravarthy, General Manager of National Housing Bank – India, recommended setting up three or four financial institutions exclusively for housing finance.

“These institutions can be regulated by the Bangladesh Bank. But separate set of guidelines can be prescribed for them, like – minimum CRAR, and maximum loan to value ratio of each housing loan.”

He said these can be promoted under a PPP initiative to bring in public sector’s confidence and private sector’s efficiency.

Focus can be on special segments, like – women borrowers, borrowers with informal income, and lower income group, etc

Mr Chakravarthy suggested setting up an apex housing finance institution, such as – Bangladesh Housing Bank, to channel long-term funding requirements of all banks and financial institutions for housing.

This apex institution can be permitted to raise long-term funds – both domestically and internationally, he concluded.

Simon Christopher Walley, Lead Financial Sector Specialist – Finance Competitiveness and Innovation Global Practice of the World Bank, suggested setting up an affordable housing commission to oversee strategic plan of housing finance.

He also focused on a national housing policy for integrated housing planning.

Allen Forlemu, Regional Industry Director – Financial Institutions Group, Asia and Pacific, the IFC, Nuzhat Anwar, Acting Country Manager – Bangladesh, Bhutan and Nepal, Dr. Shaikh Shamsuddin Ahmed, Commissioner of the Bangladesh Securities and Exchange Commission (BSEC), and Naser Ezaz Bijoy, Country Chief Executive Officer (CEO) of Standard Chartered Bank (SCB) Bangladesh, among others, also spoke at the event.

Source : The Financial Express