Staff Reporter
Islamabad
International Finance Corporation (IFC), a member of the World Bank Group, is making an equity investment of up to PKR 500 million (about $3.2 million) in Pakistan Mortgage Refinance Company Limited (PMRC), to catalyze affordable mortgage financing to help to address a critical gap in affordable housing.
With almost half of Pakistan’s urban families living in substandard housing, and the number of people living in towns and cities expected to double between 2030 and 2040, Pakistan is facing a high demand for affordable housing. The current housing deficit in Pakistan stands at 10 million units and is expected to grow by 700,000 units per year. Despite the growing demand for housing, Pakistan’s level of mortgage lending – 0.3 percent – which is significantly far lower than South Asia’s average of 3.4 percent.
IFC’s support to PMRC will help increase the overall availability of mortgage financing for homeowners. At present, the sector’s growth is hindered by an acute absence of long-term, fixed rate funding. This investment will allow primary mortgage lenders (PMLs) to offer new mortgages, with a focus on the frontier and under-served regions such as Khyber Pakhtunkhwa (KPK), Balochistan, and Federally Administered Tribal Areas (FATA) and is expected to serve as a model for the future.
“I would like to thank IFC for their support and investment in PMRC. IFC’s support is timely, especially with the economic slowdown further exacerbated by the COVID-19 pandemic. IFC’s presence as a shareholder will inspire investor confidence in PMRC’s potential to support the growth of mortgage financing in Pakistan,” said Mudassir H. Khan, PMRCL Managing Director & CEO. ” IFC’s extensive global knowledge and expertise from establishing mortgage refinance companies in other emerging markets will help guide the company’s business strategy.”
Through PMRC, IFC will help deepen the local debt capital markets and standardize underwriting for mortgage lending, which is essential for the market to grow.
