Manager Research
Oct 29 - Nov 04, 2007

Commercial banks in Pakistan earlier used to concentrate with almost all of their resources for providing financial assistance to 'productive sectors' of the economy like manufacturing, trade, agriculture and services. This was during the last couple of years that competition grew and the banks moved towards consumer products. The consumer financing grew at a very fast pace because of a cut-throat competition among banks and availability of surplus equity. With other products introduced by banks, home financing played a vital role in making the competition stiffer. This increase is mainly because of increase in disposable income and rising per capita.


After registering an extraordinary growth of 70.5% in Jul-Mar FY 05, the consumer loans have been exhibiting a deceleration; dropping to 31.6% in Jul-Mar FY 06 and 11.9% in Jul-Mar FY 07. While the Jul-Mar FY 06 slowdown also incorporated some base effect; the slowdown in Jul-Mar FY 07 was caused primarily by the increase in interest rates as well as more restrained lending by banks. The deceleration in auto loans and home loans, in particular, was the largest contributor in total decline of private sector credit, the slowdown can be attributed to the increase in interest rates, higher insurance charges and increased number of bad debts due to interest rates increases that resulted in a relatively more cautious lending by the banks.






July - Mar FY07


The Government of Pakistan, with a view to reviving and revitalizing the housing sector has recently notified the Housing and Construction as priority industry in the Investment policy besides benefits related to relief in duty on construction equipments and some building materials. Even foreign investment has now been allowed in this sector. HBFC has played a very vital role in economic development more significantly by financing construction of housing units. The Government is focusing for enhancing housing stock in the country to meet the annual demand as well as to clear the backlog, therefore 85% financing is needed for new construction units whereas 15% financing for the existing construction.


First Women Bank Limited: Offers home loans under the brand "First Home". Women can get a loan up to Rs. 7.5 million from the bank. These loans are offered to all classes of working women i.e. salaried, self-employed (proprietor), professionals in business.

Bank AL-Falah Limited: The bank offers a moratorium of upto 3 years in principal payments, for a financing of upto 20 years. You service only the mark-up element initially, and principal repayment starts after the end of moratorium period.

United Bank Limited: UBL Address empowers you to become the proud owner of a home by offering a variety of product and pricing options that are flexible yet affordable. All product options are amortized and range over a tenor of 3 - 20 years.

MCB Bank Limited: MCB Pyara Ghar provides you with all you want as you can renovate your existing home, buy or construct a dream house that you always envisioned for you and your family. The bank finances up to Rs20m with tenures ranging between 2 to 20 years.

Standard Chartered Bank Limited: SCBPL Mortgage Loans Aashiana provides you with the means and tools to fulfill your dreams. With our Home Purchase and Home Credit schemes, you can now buy or renovate your house and turn it into the home you have always yearned for. It is offering the broadest range of Home Loan Products in the market.

Faysal Bank Limited: Faysal Housing Finance gives you so much more than great financing rates. They help you all the way to make your next move in an easy and timely manner. You can select any scheme of Faysal Bank's housing finance to meet your need anywhere in Pakistan.

Askari Bank: Askari Bank has made the realization of your dream to have a house of your very own possible. Whether you plan to build a house, tailor made to your requirements or buy a constructed house, Askari mortgage finance enables you to pursue your goal without any problems.