The financing for the housing and construction sector increased significantly to Rs202 billion in March 2021 from Rs148 billion in June 2020, showing a growth of Rs54 billion or 36 percent in three quarters of FY2021. In a statement on Tuesday, the State Bank of Pakistan (SBP) said that housing and construction finance has been progressing significantly and a momentum in housing and construction finance is building up. The banks’ housing and construction finance portfolio has increased from Rs148 billion by the end of June 2020 to Rs202 billion in March 2021. This represents a growth of Rs54 billion or 36 percent in three quarters of FY21 compared to a stagnant position in earlier quarters. Such growth in housing and construction finance in such a period has never been witnessed in Pakistan’s history previously. Overall financing to the housing and construction sector by banks is likely to increase further significantly as mortgage finance activity under the Mera Pakistan Mera Ghar Scheme is picking up pace. As of April 20, 2021banks have received applications for financing of more than Rs52 billion from the general public under this scheme. Of these, the banks have approved financing of more than Rs15 billion to the applicants while the remaining applications are at different stages of the evaluation and approval process. The SBP said that keeping in view the need to improve housing in the country and the important role of the construction sector in boosting economic activities in the countries, the Government of Pakistan envisions to increase the number of housing units manifold in coming years and has taken several measures in this regard. A key element to ensure sustainable increase in the construction of building activities is the provision of financing both to the supply and demand side players of the housing and construction sector. Financing to the housing and construction sector in Pakistan has almost always remained quite negligible in the credit portfolios of banks when compared with other developed and developing countries for various reasons. To support the vision of the government of Pakistan, the State Bank of Pakistan has taken several measures since July 2020 to support the provision of financing for the housing and construction sector by way of giving incentives and targets to the banks. A key regulatory measure in this direction was assigning mandatory targets to banks to increase financing for mortgages to builders and developers. Banks are required to increase their housing and construction finance portfolios to at least 5 percent of their private sector advances by end December 2021. In October 2020, the government of Pakistan augmented these efforts by introducing the Government Markup Subsidy Scheme, now commonly known as Mera Pakistan Mera Ghar Housing Finance Scheme. This scheme enables banks to provide financing for the construction and purchase of houses at very low markup rates, targeting low to middle income segments of the population.