IsDB to provide 3.3b housing loans to disadvantaged outside 3 major cities

Logo of Bangladesh House Building Finance Corporation

The Bangladesh House Building Finance Corporation (BHBFC) is set to receive USD 296.3 million or Tk 32.60 billion from the Islamic Development Bank (IsDB). This funding will be used to provide housing loans to disadvantaged individuals and those residing outside of three major cities. 

The government agency will utilise this fund for its Rural and Peri-Urban Housing Finance Project and intends to launch the loan programme in January of the upcoming year. 

BHBFC said currently they provide 75 per cent of the loans to people living outside Dhaka and Chattogram city corporations. However, the new loan fund will be entirely provided to people living outside Dhaka, Chattogram and Sylhet city corporations, which means people from rural areas will get priority, and the IsDB has provided loans to the state-owned housing loan provider with this condition.

BHBFC managing director Md Abdul Mannan told Prothom Alo, “Process is underway to release the approved fund. Once funds are released, our operation will widen in rural areas. Previously, we received another fund from the IsDB. As we managed the prior fund well, they are granting us another one, and we are receiving the largest fund among 52 countries.”

“Three-fourths of our loans has already reached outside two big cities and we are trying to take our service to rural people. Branches have been opened at all districts and initiative has been taken to open offices at upazilas to expand our services,” he added. 

Sources said BHBFC provides loans at a maximum interest of 9 per cent to purchase apartments and build houses, but the figure is 7 per cent for farmers. The state-owned agency receives a low and simple interest on its loans with repayment periods ranging from 5 to 25 years. Though banks are raising interest, BHBFC keeps its rate unchanged.

The state-owned agency has been increasingly lending to people over the past couple of years. They provided a record Tk 6.96 billion in housing finance loans in the 2022-23 fiscal and Tk 5.89 billion in the 2021-22 fiscal.

BHBFC, which is a specialised institution, mainly lends for building houses. The agency also provided loans for flat registration, housing development and purchasing house-building materials.  With the submission of necessary documents, BHBFC usually provides 70 per cent to 90 per cent of the total amount of loan sought by a client. The client has to bear the rests.

Besides, the agency has offices in all divisional cities and districts. It also operates a one-stop service and assists clients in preparing documents.

BHBFC provided 12 types of housing loans. These are; sawpnoneer, nagarbanhdu, porabasbandhu (housing loan for NRB), pallima (rural housing loan scheme), housing loan for farmers, housing repair/renovation loan scheme, housing improvement loan scheme, flat loan, flat registration loan, housing equipment loan, housing loan for government employees, and manjil, an Islamic Sharia-based investment scheme. 

According to BHBFC officials, the agency launched its 'Swapnoneer' loan scheme for individuals with lower incomes working in both government and private sectors, and this scheme received a positive response. Additionally, the Islamic Sharia-based investment scheme "manjil" has seen substantial demand. 

* This report appeared in the online edition of Prothom Alo and has been rewritten in English by Hasanul Banna