Bangladesh Bank housing refinancing scheme to get more fund

Bangladesh Bank housing refinance scheme, a popular housing project, is going to get Tk 200 crore in fresh fund, as its entire amount of Tk 500 crore has almost exhausted. 'It's a good project. We're going to inject Tk 200 crore into the project … it' ll continue,' Bangladesh Bank governor Atiur Rahman told the agency. The fresh fund is being pumped into the project amid increasing demand for the housing loan by the middle class. The central bank launched the refinancing scheme initially with Tk 300 crore for housing loan in fiscal 2007-08. Later, the fund was increased to Tk 500 crore. Under the refinancing scheme, borrowers are entitled to receive loan up to Tk 20 lakh at 9 per cent interest for a period of 20 years. 'This is a wonderful project for the low-income group people to have homes of their own,' said a Bangladesh Bank official preferring anonymity. He said BBHRS has had a tremendous response from the middle-class people as they want to have small-size affordable homes. Out of the total Tk 500 crore allocated by the government for the BBHRS, the central bank refinanced fund to the tune of Tk 350 crore till July last at an interest of 5 per cent to the financial and banking institutions, according to official sources. The entire amount of Tk 500 crore has exhausted as the financial and banking institutions are taking about Tk 45 crore to Tk 50 crore a month to disburse loan to buyers of flats of maximum size of 1250 sq ft. A senior official of a financial institution said the Bangladesh Bank should continue the scheme with bigger fund of at least Tk 1000 crore as it has multiplier effects on the economy through backward and forward linkage industries to the real estate sector like cement, iron and steel, bricks, electrical equipment, tiles, fittings, ceramic and manufacturing industries. 'The growth of middle-class housing has increased significantly due to the availability of BBHRS fund at a reasonable cost,' he said. 'The demand for home loan is increasing each year and is currently about Tk 1500 crore, which shows an increase of over 20 per cent each year.'