Bangladesh House Building Finance Corporation (BHBFC) is set to provide housing loans in the rural areas at an interest rate of only 6% as part of its expansion plan for house financing activities.
Banks and Financial Institutions Division has recently finalised the project titled “Financial and Technical Assistance for Rural Housing of Bangladesh” at a meeting held at the finance division with Banking Secretary M Aslam Alam in the chair.
Under this project, a total of 360 four-storied buildings will be constructed across the country and later on, those flats will be sold out to the BHBFC clients with only 6% interest.
According to banking division officials, though the private and state-owned banks along with NGOs are providing loans to the rural poor, the interest rate is too high for them to afford.
The private housing companies are not going to the rural areas with bigger projects as the market is not yet lucrative for them. But, the rural poor people will be able to make good use of their agriculture land, taking BHBFC rural housing loans, officials said.
“If we can get low-cost fund from the government, real estate developers will also definitely go to the rural areas for constructing of flats and houses,” REHAB President Alamgir Shamsul Alamin told the Dhaka Tribune yesterday.
As per the project proposal, the interest rate will be 6%, which will be repayable in 20 year and maximum amount of loan will be Tk10 lakh. Monthly instalment will be only Tk717 against each lakh of the loan amount while duration of the project will be five year, starting from 2014-15 and would end in 2018-19 fiscal year.
Total amount of money involves in the rural housing project will be Tk384.31 crore.
Of the total, the government will provide over Tk324 crore from public exchequer while rest of the fund will be collected from the equity of the clients, said the proposal. The government will provide Tk10 crore during the first year while Tk75 crore will be disbursed in the next four years.
“We have already sent the Development Project Pro-forma to the Planning Commission for approval,” said the banking secretary, expecting the government would come up to finance the project from its exchequer.
During the fiscal year 2012-13, the BHBFC got only Tk40 crore as loan from the government. It could not mobilise any further government fund for its lending purposes.