Badrul Ahsan :
The loan disbursement by the state-run house building lender has fallen sharply in the last couple of years due to fund shortage, sources said.
Official data showed that tThe housing finance corporation’s loan disbursement dropped from Tk 4.37 billion in the fiscal year 2012-13 to Tk3.88 billion in 2013-14 and Tk2.71 billion in 2014-15.
Until March this financial year, it disbursed only Tk 1.62 billion.
The government allocated Tk five billion for the Bangladesh House Building Finance Corporation (BHBFC) in the fiscal year 2015-16, but it stopped releasing the money.
Last time, the corporation received allocation was 2009 when it got Tk 3.0 billion fund, which was disbursed in phases until 2013.
Private sector housing loan’s declining interest rate has also hit the lone state-owned house loan provider as it still charges 10 per cent to 12 per cent, while the private sector banks have recently brought down their lending rates for housing finance to single digit.
The BHBFC authority says although the private sector lending rate appears to be lower, the reality is different.
“We calculate simple interest rate whereas private banks and financial institutions calculate compound rates. They also have various hidden costs and service charges. So, private banks’ recent lower interest rates are not a matter of concern for us,” Daulatunnaher Khanam, acting managing director of the agency, told The New Nation on Thursday.
She said if the private sector further cuts housing loan interest rate, even lower than the BHBFC, the corporation’s loans would be ‘cheaper’.
However, she said that the BHBFC has been suffering from fund shortage and it is unable to expand its loan portfolio in line with the market demand.
Officials said the disbursement might reach at around Tk 2.0 billion at end of this fiscal year, which is much lower than that of in the previous fiscal.
Asked if the BHBFC had any plan to cut interest rate, Khanam said it depended on the government. The BHBFC cannot cut interest rates on its own.
In July 2007, the Bangladesh Bank announced 12 per cent interest rate for the BHBFC in Dhaka and Chittagong, and 10 per cent for other parts of the country.
The scheme was much cheaper at that time than any other home loan products of the commercial banks with interest rate ranging from 15 to 18 per cent.
The BHBFC top executive said that her agency cannot meet the demand as there are large gaps between demand and supply of fund.
She said the demand for loan is very high in villages where urbanisation is transforming the rural landscape, with the living standard of rural people improving.
According to officials, the BHBFC had to suspend many applications for loan due to shortage of fund. The management instructed verbally the staff members not to process loan applications.
After 2009, the BHBFC did not receive any new fund from the government. On July 15 in 2015, Finance Minister AMA Muhith announced Tk 5.0 billion fund for the capital-starved BHBFC to continue its operation smoothly.
The BHBFC officials said they had even sought financial support from the donor community.
A request to the Islamic Development Bank is being negotiated by the Economic Relations Division.
Earlier, the corporation was forced to ditch lending from 1988 to 1992 due to fund shortage, officials said.
The loan disbursement by the state-run house building lender has fallen sharply in the last couple of years due to fund shortage, sources said.
Official data showed that tThe housing finance corporation’s loan disbursement dropped from Tk 4.37 billion in the fiscal year 2012-13 to Tk3.88 billion in 2013-14 and Tk2.71 billion in 2014-15.
Until March this financial year, it disbursed only Tk 1.62 billion.
The government allocated Tk five billion for the Bangladesh House Building Finance Corporation (BHBFC) in the fiscal year 2015-16, but it stopped releasing the money.
Last time, the corporation received allocation was 2009 when it got Tk 3.0 billion fund, which was disbursed in phases until 2013.
Private sector housing loan’s declining interest rate has also hit the lone state-owned house loan provider as it still charges 10 per cent to 12 per cent, while the private sector banks have recently brought down their lending rates for housing finance to single digit.
The BHBFC authority says although the private sector lending rate appears to be lower, the reality is different.
“We calculate simple interest rate whereas private banks and financial institutions calculate compound rates. They also have various hidden costs and service charges. So, private banks’ recent lower interest rates are not a matter of concern for us,” Daulatunnaher Khanam, acting managing director of the agency, told The New Nation on Thursday.
She said if the private sector further cuts housing loan interest rate, even lower than the BHBFC, the corporation’s loans would be ‘cheaper’.
However, she said that the BHBFC has been suffering from fund shortage and it is unable to expand its loan portfolio in line with the market demand.
Officials said the disbursement might reach at around Tk 2.0 billion at end of this fiscal year, which is much lower than that of in the previous fiscal.
Asked if the BHBFC had any plan to cut interest rate, Khanam said it depended on the government. The BHBFC cannot cut interest rates on its own.
In July 2007, the Bangladesh Bank announced 12 per cent interest rate for the BHBFC in Dhaka and Chittagong, and 10 per cent for other parts of the country.
The scheme was much cheaper at that time than any other home loan products of the commercial banks with interest rate ranging from 15 to 18 per cent.
The BHBFC top executive said that her agency cannot meet the demand as there are large gaps between demand and supply of fund.
She said the demand for loan is very high in villages where urbanisation is transforming the rural landscape, with the living standard of rural people improving.
According to officials, the BHBFC had to suspend many applications for loan due to shortage of fund. The management instructed verbally the staff members not to process loan applications.
After 2009, the BHBFC did not receive any new fund from the government. On July 15 in 2015, Finance Minister AMA Muhith announced Tk 5.0 billion fund for the capital-starved BHBFC to continue its operation smoothly.
The BHBFC officials said they had even sought financial support from the donor community.
A request to the Islamic Development Bank is being negotiated by the Economic Relations Division.
Earlier, the corporation was forced to ditch lending from 1988 to 1992 due to fund shortage, officials said.
