Pakistan’s housing finance sector is set for a major expansion after the federal government approved the inclusion of non-bank financial institutions in the Prime Minister’s Apna Ghar Programme on the recommendation of the Securities and Exchange Commission of Pakistan (SECP). The move is expected to significantly improve access to affordable home financing, particularly for low- and middle-income households, by allowing Non-Banking Finance Companies (NBFCs) to participate in the government’s flagship housing initiative alongside commercial banks.

Under the new framework, non-bank housing finance and investment finance companies will be authorized to provide home loans of up to Rs. 10 million, while microfinance institutions will be authorized to extend housing loans of up to Rs. 5 million. According to the SECP, the initiative will also benefit citizens who do not maintain traditional bank accounts, enabling them to obtain housing finance through simplified eligibility criteria and more accessible lending channels. Borrowers under the Prime Minister’s Apna Ghar Programme will continue to enjoy subsidized financing at a fixed 5% markup for the first 10 years, making home ownership more affordable for thousands of families.

The SECP noted that NBFCs possess extensive digital networks and a strong presence in remote and underserved areas, allowing the scheme to reach communities that have traditionally remained outside the formal banking system. To facilitate implementation, the regulator has issued a dedicated housing finance framework for NBFCs, outlining prudential guidelines, lending standards, and compliance requirements. The commission further stated that NBFCs will also be permitted to collaborate with commercial banks and other financial institutions to mobilize funding and expand housing finance under the programme.

Credit: Independent News Pakistan (INP)