Karachi, March 14, 2007
—IFC, the private sector arm of the World Bank Group, has presented a detailed business plan for Pakistan’s House Building Finance Corporation to help build its institutional capacity, enabling the company to provide housing finance to some of the country’s poorest people.
IFC’s business plan aims to help HBFC grow and be sustainable in an increasingly competitive housing finance market. It provides an in-depth analysis of the Pakistani housing finance market and presents a future outlook for HBFC. It also indicates the company’s tremendous potential to act as a catalyst for expansion of the country’s housing finance sector.
While there is a great demand for housing finance, HBFC is targeting low-income clients, a segment of Pakistan’s market that is underserved by commercial banks.
To that end, IFC’s business plan suggests that HBFC transition from a government program to a proactive, independent, and self-sustained commercial mortgage lender. This will help it to develop its business volumes and attract market funding at viable rates, while allowing it to reach out to the low-income market.
The business plan concludes that commercialization of HBFC, stakeholder support in the short-term, and effective implementation of the proposed strategies can combine to create a viable company. With a healthy balance sheet, improved operational efficiency, and a proven loan distribution network, HBFC would become a very attractive target for investment.
“Resolve of the present management and support of the government are necessary to transform HBFC into a premier housing finance institution that caters to low- and middle-income segments of Pakistan’s population. The challenge is to maintain balance between social obligation and commercial viability,” said Zaigham M. Rizvi, Chairman and Managing Director of HBFC.
Syed Farhan Fasihuddin, IFC’s Program Manager for Housing Finance in the Middle East and North Africa, added, “Effective and quick implementation of the proposed business and operational strategies is a prerequisite for turning HBFC into a viable institution and making it attractive for private investment. By providing greater access to housing to a broad spectrum of the population, HBFC could make a huge developmental impact in Pakistan.”
IFC’s advisory services facility for the Middle East and North Africa, PEP-MENA, is managing this project, which resulted from an agreement sealed at the Ministry of Finance in Islamabad in the presence of Dr. Salman Shah, Advisor to the Prime Minister.
About the House Building Finance Corporation
HBFC is a state-owned housing finance entity that has been operating in Pakistan since 1952. It provides financing for the construction, restoration, and purchase of houses for the low- to middle-income market segment. Its mission is to be a socially responsible and commercially sustainable housing finance institution. For more information, visit
www.hbfc.com.pk
.
About IFC
IFC, the private sector arm of the World Bank Group, promotes open and competitive markets in developing countries. IFC supports sustainable private sector companies and other partners in generating productive jobs and delivering basic services, so that people have opportunities to escape poverty and improve their lives. Through FY06, IFC Financial Products has committed more than $56 billion in funding for private sector investments and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. IFC Advisory Services and donor partners have provided more than $1 billion in program support to build small enterprises, to accelerate private participation in infrastructure, to improve the business enabling environment, to increase access to finance, and to strengthen environmental and social sustainability. For more information, please visit
www.ifc.org
.
About IFC PEP-MENA
IFC PEP-MENA is a multidonor facility for advisory services that supports private sector development across the Middle East and North Africa. IFC PEP-MENA focuses on improving the business enabling environment, strengthening financial markets, supporting SME development, and promoting privatization and public-private partnerships. From its inception through FY06, IFC PEP-MENA has committed more than $20 million in advisory projects. Its activities are funded jointly by IFC and the following donors: Canada, France, the Islamic Development Bank, Japan, Kuwait, the Netherlands, the United Kingdom, and the United States.