Access to easy loans stressed to ensure housing for all

The government needs to take steps to increase loan flows to the real estate sector to ensure housing for every citizen in cities, towns and elsewhere across the country, economists and banking and real estate experts said on Wednesday.

They said in neighbouring India, banks and non-banking financial institutions lend 10% of their loans to the housing sector each year, while the rate is only 3% in Bangladesh.

At the same time, obstacles in the way of providing loans in the housing sector need to be addressed, they added.

The experts also pointed out that, to avail housing loans, the mortgage documentation system in banks here is quite complicated. On top of that, 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 Covid impacts. Now there should be a logical solution to this problem, the experts added.

They came up with the comments at a virtual discussion on Housing Roundtable Series on Rebuilding the Economy post-Covid through Housing Finance and Construction jointly organised by the Policy Research Institute (PRI) and International Finance Corporation (IFC).

PRI Executive Director Dr Ahsan H Mansur, who moderated the programme, said regularly, general people are moving from rural areas to cities in search of livelihoods. Especially they are coming more to the capital.

They are living in rented houses with high payments as a suitable place has not been ensured for them, he added.

Housing loans on easy terms will help the government ensure the basic rights of accommodation for every citizen, and at the same time, meet the condition of improved housing for graduating to a developing country, said the noted economist.

Keynote speaker Simon Christopher Walley, the lead financial sector specialist at the World Bank, said respective countries must ensure sustainable housing for their citizens as per the conditions for the implementation of the sustainable development goals by 2025.

Citing from a World Bank study, he said a total of $16 trillion will be required to ensure sustainable housing. Of which, $3 trillion will come from the citizens and the rest has to be provided by the government and various national and international banks and agencies.

Simon Walley said the government and banks need to come forward to ensure sustainable housing in Bangladesh. There is no alternative, he added.

Speaking as the chief guest, Salman F Rahman, an adviser to the prime minister for private industry and investment, said the government has undertaken multifaceted projects to ensure housing for all. Ashrayan Project is one of them. Besides, the government is working to ensure housing facilities 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 manager for Bangladesh, Bhutan and Nepal; Allen Forlemu, IFC's regional industry director for Asia and Pacific; Shaikh Shamsuddin Ahmed, commissioner at the Bangladesh Securities And Exchange Commission; Naser Ezaz Bijoy, country chief executive officer at the Standard Chartered Bank; Md Salim Uddin, chairman at the Bangladesh House Building Finance Corporation; Kulasekhare Chakravarthy, general manager at the National Housing Bank, India; and Thierno Habib Hann, Global Housing Finance and Capital Markets at IFC WBG-Asia/Pacific Lead, also spoke at the programme.