News Column

SBP to enhance priority sector lending

May 7, 2014

The State Bank of Pakistan (SBP) has been making endeavours to enhance the priority sector lending- agriculture credit, micro financing, SME financing, house financing, infrastructure financing and exports.

Keeping in view the importance of these sectors, the SBP has been creating enabling regulatory environment through conducive prudential regulations (PRs) and market development through positive policy measures i.e. issuance of guidelines, setting indicative targets, promoting capacity building of financial institutions etc.

These activities have been undertaken at the SBP as ”Special Initiatives“ by Deputy Governor Saeed Ahmed, said an SBP statement here on Tuesday.

Housing and construction plays an important role in an economy. Around 50 industries and 70 per cent of the unskilled labour are associated with construction sector.

Housing finance supplements radically in long term economic growth through job creation, economic linkages and in raising living standards of people.

The house finance in Pakistan is relatively very low as compared to our neighbouring countries and it has to be growing at a desired pace.

Outreach of housing finance in terms of income groups and geography is very limited.

The State Bank of Pakistan has been taking various steps for promotion and development of this sector.

Prudential Regulation relating to housing finance needed to be revised to bring them in line with current needs.

Keeping in view specific features of Housing Finance i.e tenure, pricing, and collateral arrangements being different from other areas of consumer financing products, a separate set of Prudential Regulations specifically for Housing Finance has been issued to give true focus to this area.

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Source: Balochistan Times (Pakistan)