KARACHI: Housing and construction finance recorded “exceptional” growth of 85 percent in 2021, according to the State Bank of Pakistan (SBP). The central bank said that bank financing for dwellings and construction climbed by Rs163 billion to Rs355 billion from Rs192 billion, and that loan disbursement under the Government Markup Subsidy plan, popularly known as Mera Pakistan Mera Ghar (MPMG), increased by Rs38 billion. It said housing and construction finance, particularly under the MPMG, witnessed impressive growth on the back of an enabling regulatory environment introduced after extensive consultation with the stakeholders and the SBP advice to the banks to increase their housing and construction finance portfolios to at least 5 percent of their domestic private sector advances till Dec 2021 beside introducing a set of incentives and penalties to ensure the compliance. “Banks also made significant progress in the provision of financing under MPMG scheme, introduced in 2020. Financing under MPMG picked up momentum in 2021 as approvals for financing by banks grew from near zero to Rs117 billion in 2021,” the SBP said. “The banks have received requests of financing of Rs276 billion from potential customers, which indicates that approvals and disbursements will keep growing in coming months.” The central bank has taken a number of steps to create an enabling regulatory environment for banks to increase the flow of financing to the housing sector. Allowing third-party guarantees throughout the construction stage, waiving the Debt Burden Ratio (DBR) in cases of informal income, and requiring banks to use conventional facility offer letters are among the important efforts. The State Bank has also recommended banks to create and use income assessment models for borrowers with a variety of revenue sources. The central bank conducts regular mystery shopping surveys of bank branches across the country to assess the readiness, knowledge, and acceptable behaviour of banking employees toward MPMG consumers.