Nov 12 - 18, 2007

An overview of growth and housing issues in Pakistan reveals the fact that its population is presently increasing every year by 3.5-4.o million making it the 6th most populous country in the world after China, India, USA, Indonesia and Brazil. Pakistan has an average of 6 persons per housing unit with an average of 3.5 persons per room. Situation in India is the same whereas global average is 1.1 persons per room. Today, an average population density of Pakistan is 106 persons/square km while just Karachi's density is 135 persons/square km. Population growth and a substantial shortage of adequate housing is one of the major issues being faced by Pakistan's population of 160 million people. This practically creates a housing demand for setting up 2 new average-sized cities every year to combat rising urbanization and improve persons/room density in densely populated cities. A careful review indicates an existing backlog hovers in the vicinity of 7.5-8.0 million housing units in the country.

Based on 1998 census

(units in millions)

Total Housing units in the country




16.8 (80.8%)

Rent free

2.0 (10.2%)


1.8 (9%)

Units required for population of 150-155 Million



Shortfall of Housing units

7.0 Million (now increased to 7.5 million)

Total Housing Stock in Pakistan


32.03% (6.36)


67.7 % (13.33)


100 % (19.694)

Over all housing stocks comprised

Kuccha Houses

39% (7.67)

Semi Pucca Houses

40% (7.88)

Modern Bricks Houses

21% (4.14)


100% (19.694)

Annual growth rate of housing demand in urban areas



Growth of housing units


12.6 millions


19.3 millions


25.5 millions

Table below depicts the true picture of housing demand and supply in Pakistan.


Additional Supply required


( Due to Population Growth )

Depletion of stock @ 1% p.a.


To meet backlog in 20 years


New Housing Need


Supply estimate


Persistent Gap adding to backlog


One third in urban housing


Pakistan, with a per capita income of around Rs.5,000/- p.m. and minimum wage of Rs.4,600 p.m., has more than 2/3rd of its population falling below the mortgage afford ability of about Rs.2 lac, with monthly income levels below Rs.6000 - 7,000 p.m. This, coupled with the massive backlog of housing (70-75 lac units) has led to a situation where nearly 3/4th of the population finds itself unable to effectively avail the services being offered by the housing sector in any meaningful way.

House Building Finance Corporation (HBFCL) was established in the year 1952 as a Statutory Federal Body with an object to provide financial assistance for construction and purchase of houses. It is amongst the oldest housing finance institutions in Asia Pacific region. For nearly 50 years, it enjoyed the monopoly status in housing finance. Today, nearly 25 Private Commercial Banks are also engaged in housing finance business. It has always maintained its focus on low and middle income housing needs.

To help design fresh solutions to today's affordable housing challenges, HBFCL now is in the process of Corporatization which is likely to be completed by middle of year 2007. After its likely "Corporatization" it will be operating under a new charter as a Limited Liability Company under the Companies Ordinance 1984. This will lead to an ultimate "Privatization" of HBFCL through strategic disinvestment and stock market listing. Its ownership will be offered to multilateral agencies, housing finance institutions and general public.

Efforts to provide low cost housing are occurring at a time of great change. The new platform requires a far-reaching and progressive strategy. With the technical assistance of International Finance Corporation, CMHC of Canada has prepared a new "Business Plan" for HBFCL. With its Comprehensive Reforms Program in place, a computerized loan origination and processing scheme to support this progressive plan, HBFCL is all set to meet housing and housing finance challenges in Pakistan.

The new vision and broaden horizon of HBFCL is to be the prime housing finance institution of the country by increasing the housing stock and providing affordable housing solutions to low and middle income groups of population. Often, the success of reasonably housing programs is determined by the extent to which it achieves its set of objectives, such as the number of units created or the number of households with affordable housing cost burdens. This organization encourages new constructions in Small and Medium Housing (SMH) sector.

Today, low cost housing policies must help promote healthy families and communities. Housing needs and policy priorities differ from place to place, due to differences in housing market conditions, history and political realities. Responding to housing needs of low income groups is a social responsibility, beyond that everything has to be 100% commercially sustainable. According to the new plan of action, HBFCL is a socially responsible and commercially sustainable housing finance institution.

According to the housing continuum developed by HBFCL the High -High and High End segment constitutes about 5 % of the population. Numbers of commercial banks are catering to housing needs of this particular segment which has strong purchasing power with income range of Rs 50,000 and above. There is housing shortage of 0.375 million houses for the segment and sufficient supply is available to meet the demand.


- Per Capita Income

Rs.5,000 per month

- Minimum Wage Rate

Rs.4,600 per month

* Total existing backlog is estimated at 7.5 Million units. The shortage in various income segments is assumed in the same proportion, as per income distribution pattern. However, actual shortage is much higher in low income segments as opposed to higher income segments.

A glance at continuum suggests that, Upper Middle and Lower Middle segments of the population constitute about 35 % with housing shortage of 2.625 million housing units. For the time being only HBFCL caters to the needs of this particular segment of the market.

As far as Small and Micro segment of the population is concerned it constitutes about 60% of the population having a shortage of about 4.5 million housing units and is vastly neglected part of the population. There are no financial institutions currently available to cater to housing needs of this particular segment. There is a need of creation of Social Housing Institutions/Micro Finance Banks throughout the country to meet the vast housing demands of this particular segment.

HBFCL is working on launching the first ever Social Housing Bank of the country to serve the purpose of providing affordable houses to poor and needy people. HBFCL is also doing the ground work to launch Social Housing Company as well. It is highly recommended that the "Sponsor a Shelter Foundation" based upon "Zakat and Charity" should be established to solicit and fulfill the financial obligations of mortgage payments of very poor and very needy people of Pakistan.

Most of the developed countries have substantial Mortgage to GDP ratio. It varies from 25 % to 60 % in developed countries. It is 51 % and 54 % for US and UK respectively. India has also shown visible improvement and ratio has substantially increased form 2.5 % in 2001 to 8.5 % in 2007, while Mortgage to GDP ratio in Pakistan measly stand at 1%.

Graph below shows the comparative position of various countries in 2004.

Target should be set to have an increase of at least 1 % per year in the mortgage finance to GDP ratio which will set the ratio at 20% in the year 2030.

The Government of Pakistan has made an announcement in the Budget of 2007-08 to make 250,000 low-cost housing units over the next five years. The announcement reads as follows:

"Our government realized this need of low income people. Low cost Housing Schemes would be started in collaboration with Provincial and District Governments. Loan from HBFC will be available. Under this scheme an estimated number of 250,000 units would be constructed in the next 5 years."

The Ministry of Finance had asked HBFCL to prepare a roadmap as to how the above program could be implemented to ensure that the Governmentís commitment is met in time properly.

In this lieu, HBFCL has developed a road map for construction of 250,000 housing units for middle and low income groups. However 250,000 housing units will not be sufficient to meet the demand.

Population growth is phenomenal with dilapidated old housing stock coupled with increasing income gaps demand more housing units through out the country then the proposed 250,000 for five year. The target was set in 2001 which is yet to be initiated so logically much more housing units are required to reduce homelessness in the country. In addition, it is laudable that Government has realized the importance of long-term planning for housing in vision 2030 and has declared the construction and housing sector as industry.

Through vision 2030, Government has shown commitment to construct houses for low income groups. In addition govt. will address the issues of supply of developed land, effective administration, effective legal and regulatory system, and adequate housing finance for the poor

The outreach model comprises of Physical Branch, Virtual Branch and Mobile Service network under Expansion of Out-Reach Program. EOP is a new approach being implemented by HBFCL to geographically expand its presence in the country via cost-effective means. HBFCL was present in only 55 cities through its costly branch network. Under EOP, 25 representative offices have already been established. By the end of year 2007, EOP program would enable HBFCL to be present in more than 100 cities of Pakistan.

Features of EOP for Pakistanis working abroad include on-line submission of Applications and on-line tracking of application processing. HBFCL supports clients in documentation and titling related issues. There is development of an Information Portal on Real Estate and Housing opportunities in the country. Due to this, In-Country locations not covered by Branch or Representative Office Network are also covered on-line. Applicants not having Computer/Internet facility will be provided service through designated Internet Cafes/Real Estate Agents.

Under the Representative Office Program, HBFCL trains "Service Representatives" who are selected after a thorough screening process and franchises HBFCL's client service business to them in selected Urban and Rural locations. They are provided both "off-site" and "in-house" training. Off-site training is conducted at Pakistan Institute of Bankers (IBP). District Managers would make fortnightly visits at Representative offices to offer further support to Service Representatives in handling the clients. They serve the clients in specified locations through stationary "Representative offices".

In Pakistan, huge amount of land is available but the poor people do not have purchasing power. The Government does not have required manpower and machinery to draw feasibility of land and providing infrastructure for ultimate allotment of these lands to the needy people.

Since HBFCL's objective is low and middle income housing thus target market is widely spread geographically.

But, due to immense competition in the field of housing finance business, there was a dire need for invoking some innovative marketing strategies which could also provide door-step and hassle-free informative services about HBFCL's loan schemes to the people.

In this regard, Mobile Van Service is a proactive rather than reactive approach to its clientele. It could cover a much wider area through a well planned program. Mobile Housing Finance serves clients in small town, business centres of big cities and villages with housing finance services at clients" doorstep. One-to-one discussion with HBFCL Representatives will provide an opportunity for briefing of new products, access to online tools such as mortgage payment calculators, online banking tutorials and confirmations.

The mobile bank will be connected through broad band internet connectivity and will offer the normal range of day to day banking services. The benefits of Mobile banking include enhanced availability to public, increased staff productivity, marketing and publicity of new products. The most significant aspect is reputation building, image making and negative image breaking.

At last but not the least, HBCFL in a very short time period has given a new look to the housing industry of Pakistan. Establishment of call centre to facilitate its valuable customer is yet another step taken by HBFCL to make customer feel at home while dealing with HBFCL.

Launch of first ever REITS, Social Housing bank, SUKUK-ìa mortgage back security", and ten new products, is in pipe line which is expected to be completed pretty soon. Further more, through various platforms, HBFCL has reiterated the need of following highly essential areas to meet the challenges of affordable housing in Pakistan.

1. Mortgage Finance:

> Target should be set to have an increase of at least 1 % per year in the mortgage finance to GDP ratio which will set the ratio at 20% in the year 2030.

> Promote housing construction and housing stocks.

> Very needy and very poor needs

Micro housing from all banks

Large scale micro housing scheme(social housing)

> SBP should make the small and micro mortgage finance compulsory for commercials banks by fixing a percentage of the total assets portfolio, say 5 %.

2. Low cost technologies /Materials should be introduced.

3. Need of Computerized Land Information system.

4. Standardization is necessary to make housing cost effective

5. Private public partnerships should be promoted.

6. Cost subsidization in terms of taxes, free land, cross subsidies etc.

7. Convenient legal and regulatory frame work should be established.

8. Policies and plans devised for affordable house should be time bound and be implemented in letter and spirit.

9. Credit should be available at lowest possible rates.

10. SBP and all stake holders have to play their due role diligently.

11. Establishment of MIS department regarding housing and construction at federal and Provincial level

12. computerized Land record information system should be introduced

13. Construction must be according to the building codes to avoid any future destruction and deterioration.

14. Prominent organizations having expertise in low cost housing techniques/models must be approached to explore the ways of affordable housing solutions

15. Govt must create housing "infrastructure and development fund" and the funds so generated must be utilized for affordable housing development.

16. Construction sites have to be located as nearest as possible to the developed cities so that the infrastructure for new colonies can be created easily and cost effectively.

17. Land must be provided free of cost or at minimum possible installments for 20 years.

18. Govt should waive all sorts of taxes on construction materials to meet the challenge of afford ability.


From HBFC Contact Center Initiative

KARACHI: The need for properly managing customer support has now become a point of major concern for many industries. Financial, Telecom, Courier, Utility and Insurance are some of the sectors that have developed proper Contact Centers to provide one window service to their customers. Recently House Building Finance Corporation Limited, the oldest housing finance institute of Pakistan has acquired an advanced contact center solution from ZRG, nation's market leader in contact technology.

HBFC Ltd has launched its Customer Care Contact Center on a toll free number (0800-42325) to provide prompt and updated information to valuable customers of the Corporation and the general public as well. The newly established Contact Center aims to serve the company's large customer base more efficiently which covers lower and middle income sections of population that are working class and the backbone of Pakistan's economy. The contact center will be a major contributor in supporting the recent Ghar Aasan and Shandar Ghar Schemes of HBFC Ltd.

ZRG team studied HBFC's requirements and presented a cost effective solution that is built on the most preferred open standards technology. HBFC Ltd selected ZRG solution because the offer and features was unmatched by any other market player and was backed by a team of professionals that have delivered success to over 35 mission critical centers in the country and the international market. ZRG seamlessly integrated HBFC's customer database with its Contact Center and CRM solution. The solution enables the agent for registering and tracking of all complaints and capturing leads for proper sales management. ZRG provided an integrated complaint management system, an IVR with easy to follow instructions, CTI for providing personalized services to the customers and Call Recording system for transaction verification and problem resolution.

According to Mr. Zaigham Mahmood Rizvi, Chairman and MD, HBFC Ltd, "The Company aims having its brand/service network in more than 90 cities of the Country. The user friendly contact center service will facilitate needy citizens to discuss and find their housing problems and solutions with HBFC Ltd. This Customer Care Contact Center will perform as an information providing center to facilitate the existing and intending customers of HBFC Ltd and will provide detailed information to common citizens about Corporation's products, investment policies and procedure. ZRG has done an excellent job by delivering us a highly flexible and advanced platform that will help us achieve greater customer satisfaction."

Mr. Ayub Butt, CEO, ZRG International said, "Customer satisfaction can be increased by providing prompt services, personalized attention, and quality interaction to the customer. ZRG and HBFC Ltd will be working jointly to increase customer satisfaction by improving business communication and customer contact management functions. We have provided cost-effective, yet most advanced technology for the contact center that will help the HBFC representatives carry out a managed customer interaction through automation, integration and complete documentation."

House Building Finance Corporation Ltd., the oldest housing finance institute of Pakistan, was established as a statutory federal body in 1952 under companies ordinance 1984 (XL-VII of 1984) with the objective of providing financial assistance for the construction of houses. Ensuing HBFCL's scope also branched out into diverse dominions like purchase, repair and renovation of houses. Later on HBFCL's mission was evermore reformed to specifically target the needs of the low and middle income strata of the country by providing Small and Medium Housing (SMH) Solutions, hence successfully providing skilled and user friendly service at affordable costs. Over the years HBFCL's operation has flourished and is now spread over a network of 12 Zonal Offices, 58 District Offices, 4 camp offices and 25 and 21 Representative with us opened very soon.

ZRG has been providing end-to-end international contact center technologies from Intel Corporation, USA since 1994. Due to the reliability, advanced features and cost-effective approach, Intel Contact Center technology has become the most preferred choice among the leading brands. Majority of the contact centers in the country including Bank Alfalah, United Bank, Askari Master Card and 15 other financial organizations have installed Intel Contact Center solutions and are completely satisfied with the performance and flexibility that Intel offers. These solutions are being used by millions of users that use self-service applications in addition to the contact center agent services. These solutions are backed by an experienced and knowledgeable team of ZRG International that has successfully deployed over 35 contact center projects, including the largest contact center in the country at Mobilink GSM that receives over 600,000 calls per DAY.