Daily Times

ISLAMABAD: Investment in low-income housing would bring massive economic benefits to Pakistan, according to a new study published by Karandaaz Pakistan and funded by the United Kingdom government’s Department for International Development (DFID) on Wednesday.

According to the study, construction of 100,000 more houses each year will lead to economic growth as well as increased employment opportunities. According to the study, Pakistan’s economy will benefit massively if affordable housing were to be increased. UK’s DFID Head Joanna Reid said at the event, “Only the richest of companies can afford to build homes for the richest of people. Pakistan needs financing mechanisms to ensure everyone can have a roof over their head.”

Speaking at the occasion, Karandaaz Chief Executive Officer Ali Sarfaraz, said, “It is important for such discussions to be given a platform and for players within both the construction and the banking community to come together and engage in a conversation on how the challenges in access to finance, especially for small and medium sized builders and developers, can be resolved. We hope that the study Karandaaz has conducted motivates members from the financial sector to take steps in making available financial products better suited to the needs and asset base of Small & Medium Enterprise (SME) builders and developers and thereby catalysing the availability of affordable housing for everyone in Pakistan.”

The event was well-attended by representatives of the banking and building sectors, along with representatives from the government. Prime Minister’s Task Force on Housing Chairman Zaigham Mahmood Rizvi also participated in the event and said, “According to the United Nations Habitat, more than half of the humanity now lives in cities and by 2050, three out of four people will be living in urban areas. This massive urbanisation in most of the cities of Asia Pacific is creating challenges in major metropolitans like Mumbai, Calcutta, Karachi, Manila and Dhaka etc. The urban areas, more so major metropolitan cities are facing housing shortages and generating urban slums, illegal habitats and indecent housing.

This is adding further to the already existing urban housing shortages in cities, nearly all of which is economically weaker segments of society. The stakeholders of housing, namely developer, planners, the governments, fiscal and regulatory agencies all are needed to be engaged to address affordable housing challenges, both from its supply-side and finance-side parametres. The supply-side players, mainly the developers/builders need to be engaged for meeting this challenge of affordable housing. In turn, this will boost the economy and create jobs. Housing and real estate sector is directly linked to about 42 construction materials industries and creates jobs at much higher rate. I reckon that with the government’s focus and assistance from partners such as Karandaaz, the growth of SMEs in building and construction sector will bolster the positive impact at the macro level. The state and the private sector should come forward to compliment and support efforts of platforms like Karandaaz.”

There are 40-50 allied industries associated with the construction and real estate sector, most of which are SMEs. The construction sector contributed 2.7 percent to Pakistan’s Gross Domestic Product in Fiscal Year 2017, estimated to be 2.8 percent during FY18. With over 50 industries indirectly associated with the real estate construction sector, the overall economic impact is much higher

Karandaaz promotes access to finance for small businesses through commercially directed investments and financial inclusion for individuals by employing technology-enabled digital solutions. Karandaaz also develops and disseminates evidence based insights and sector-based studies that can lead to greater financial inclusion, employment generation and SME growth. Karandaaz Pakistan has financial and institutional support from leading international development finance institutions; DFID and the Bill & Melinda Gates Foundation.

Published in Daily Times, December 6^th 2018.