Bangladesh House Building Finance Corporation (BHBFC) has suspended its lending programme for last two months due to shortage of fund.
The management instructed verbally the staffs not to process loan applications, officials of the Banking and Financial Institutions Division of the finance ministry said.
They said the state-run financial institution for providing housing loans would not be able to resume the credit programme within a short period of time without recapitalisation by the government.
In February, BHBFC had sought a budgetary allocation of Tk500 crore for the current fiscal year as well as Tk500 crore every fiscal year beginning from fiscal 2014-15 to continue its lending programmes.
In a recent letter to the financial institutions division, BHBFC Managing Director Dr Nurul Alam Talukder said the corporation could not invest commensurate with the demand for loans because of fund shortage.
“We need adequate funds to provide financing at district and sub-district levels to follow the directives of President Abdul Hamid and Prime Minister Sheikh Hasina. Presently, BHBFC’s annual demand for loan is about Tk10bn,” he noted.
He said the institution is not capable of expanding its activities to upazila and district levels due to fund crisis as demands for housing loans are there in Kishoreganj, Gopalganj, Sirajganj and Srimangal after opening branch offices in these towns. “But we are unable to disburse loans in these areas due to severe fund shortage.”
Banking Secretary Dr Aslam Alam told the Dhaka Tribune the corporation has already exhausted all the funds, resulting in the suspension of the programmes.
“Now they would not be able to disburse loans for the clients without realisation of previous loans,” he said.
He said: “Sovereign guarantee could have been given to BHBFC for borrowing fund from the development partners like World Bank, Asian Development Bank and other international lending agencies.”
The finance ministry, however, refused giving the guarantee, he said.
Finance ministry sources said the BHBFC received only Tk40 crore as loan from the government in the fiscal 2012-13. It could not mobilise any other fund for lending purposes.
The BHBFC provides house building loans in Dhaka and Chittagong metropolitan cities at a rate of 12% while it is 10% for other cities and towns.
There are plans by BHBFC to expand its activities through setting up offices in every district gradually. Now the organisation is operating 29 offices across the country.
During July-December period of 2013, the amounts of loan sanctioned, disbursed and recovered were Tk222 crore, Tk226 crore and Tk200 crore respectively. The total loan balance was around Tk2,930 crore. During the same period, the amount of classified loans stood at Tk233 crore, only about 8% of the total disbursement.
BHBFC has increased the individual loan ceiling to Tk50 lakh two years ago.
The corporation’s lending had earlier remained suspended from 1988 to 1992 due to fund shortage, sources said.
