Dhaka, Bangladesh, June 13, 2012—
IFC, a member of the World Bank Group, has released a study which found that there is a huge demand for finance for affordable housing that banks can successfully tap into. Contrary to assumption, low-income groups can meet the mortgage requirement, it says.
The study found that over 90 percent of low-income households need a mortgage, and more than half of those families can offer land as collateral to secure the loan. That
runs contrary to the long-held view of financial institutions that lower income families cannot meet borrowing requirements because of irregular incomes and a lack of assets.
“The study is a timely initiative, highlighting critical opportunities and means to attain them,” said Abul Qasem, Deputy Governor of Bangladesh Bank.
He spoke to global specialists, Bangladesh Bank representatives, leading private sector members, multilateral donors, and chief executives of financial institutions at the launch of the report. Entitled “Market Study on Affordable Housing Finance in Bangladesh,” it maps the mortgage market and analyzes the demand for and avenues of finance for affordable housing.
“Affordable housing finance offers a huge untapped market potential for banks and financial institutions,” said Thelma Tajirian, IFC Program Manager. “It will help provide access to housing finance for low-income groups, while enabling financial institutions to expand to new frontiers. In the long term, affordable housing finance will stimulate rural development in Bangladesh.”
The country faces an acute shortage of housing, with mortgage assets representing less than 3 percent of gross domestic product, compared to 14 percent average globally. An estimated 85 percent of people in the country live in rented apartments.
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, providing advisory services to businesses and governments, and mobilizing capital in the international financial markets. In fiscal 2011, amid economic uncertainty across the globe, we helped our clients create jobs, strengthen environmental performance, and contribute to their local communities—all while driving our investments to an all-time high of nearly $19 billion. For more information, visit
www.ifc.org
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