Finance Minister Miftah Ismail on Saturday announced that the government is reshaping the low-cost housing scheme, Mera Pakistan Mera Ghar (MPMG), claiming that the interest rate has gone up to 15% while funds were being provided at much lower rates.
In a recent tweet, the Minister said that many people have been currently approaching him regarding the situation since they have already spent money based on the approval of the loans.
“I want to assure you that we are reshaping this scheme and no one will lose their money,” the minister tweeted.
State Bank asks lenders to hold loan disbursements
The State Bank of Pakistan (SBP) instructed banks to put on hold further disbursements under Mera Pakistan Mera Ghar (MPMG) scheme till August 31, 2022, and to also pause fresh disbursements under the Prime Minister’s Kamyab Jawan Youth Entrepreneurship Scheme till July 15, 2022.
The central bank said that the reason behind pausing both schemes is the same: “Government of Pakistan is considering to review/revise features of the subject scheme in light of recent developments in the macroeconomic scenario.”
The SBP circular further clarified that in cases where the banks have already made partial disbursements till June 30, they could release the remaining amount under MPMG program.
Sources at Naya Pakistan Housing & Development Authority (NAPHDA) have told media on condition of anonymity that the disbursement of subsidy under the house financing scheme has already been stopped by banks as the budget 2022-23 has not allocated any fund for it. NAPHDA is a dedicated organisation that the PTI government had established in January 2020 through an Act of Parliament to work on the MPMG scheme.
Data shows that out of 5 million houses planned by PTI government under MPMG scheme, so far:
- 21,980 low cost houses have been completed
- 52,439 houses are under construction, while
- 95,084 houses are in planning phase