The House Building Finance Corporation

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The House Building Finance Corporation (HBFC) (now incorporated under companies as "HBFC Ltd." ordinance 1984 since July, 2007) was established in the year 1952 as a Statutory Federal Body with the object of providing financial assistance for construction and purchase of houses to the people of Pakistan in urban as well as rural areas. With its establishment, the concept of institutionalized housing finance was introduced for the first time in Indo-Pak sub-continent for providing long term finance for house building. Vision To be the prime housing finance institution of the country, providing affordable housing solutions to low and middle income groups of population by encouraging new constructions in Small & Medium Housing (SMH) sector. Mission To be a socially responsible and commercially sustainable housing finance institution. Target market Low income and middle income groups of populations Target areas No negative list, all legalized residential locations Responding to housing needs of low income groups is a social responsibility, beyond that everything has to be 100% commercially viable and sustainable to ensure an on going housing finance entity. Ghar Aasan Flexi House Building Finance Company Ltd offers attractive housing finance products best aligned to market demands, catering to the varied needs of the customer, providing easy payment plans. HBFCL is transforming into a modernized, customer friendly, and socially responsible organization providing affordable housing finance solutions. Ghar Aasan Flexi is based on the concept of Diminishing Musharaka with the following four categories to meet the needs of our customers:

Purchase of a residential property Construction of residential property a. Residential construction on Applicants owned land b. Residential construction on applicants owned house (on advance stage construction i.e. up to lintel level or roofed) Renovation of an existing residential property. Replacement of an existing housing finance

Following are the salient features of the scheme: Maximum Ceiling

Financing is available up to Rs.10 million for purchase, construction & balance transfer facility subject to the customers eligibility & location of house or apartment. For renovation the maximum financing limit is up to Rs.2.5 million. The investment is repayable in affordable installments over a maximum period of 20 years depending upon the customers age and repayment ability. The overall cost in acquiring housing under the scheme is moderate as compared with other banks With early unit purchase alternatives, customer can purchase as many number of units as they need subject to prepayment charges. By making advance payment, the customer will avail two benefits i.e. get revised and reduction in monthly installment or minimum period of loan. Feel secure in terms of equitable & registered mortgage. Comply with Sharia compliant scheme. Enjoy hassle free repayment facility.

Construction With this convenient plan, the customer can construct a residential property on already owned land or to add onto on an existing residential unit. HBFCL will facilitate up to 60% of total projected cost of construction (Land cost + Cost of construction).

Purchase The customer can live their dream of owning a house in minimum time. Renovation For renovation on an existing house, apartment or bungalow financing up to Rs.2.5 million is available pertaining to urban cities. For other rural cities, maximum investment limit is Rs.0.5 million. Balance Transfer Facility Balance transfer is applicable on financing, pertaining to purchase or construction of a residential house, apartment, or bungalow .

Pakistan Property News: House Building Finance Corporation (HBFC)March 10th, 2010

Pakistan Property News: House Building Finance Corporation (HBFC) House Building Finance Corporation (HBFC) Has Put An Embargo On Loan Disbursement To Housing Projects Which Has Resulted In Delay In Completion Published on March 09, 2010 Comments (Be the first) by Association of Builders and Developers of Pakistan (Asianet-Pakistan and OfficialWire) KARACHI, PAKISTAN Re-Tweet this article The House Building Finance Corporation has put an embargo on loan disbursement to housing projects which has resulted in delay in completion and if the Housing Project Zone of HBFC is not provided Rs. 2 billion on urgent basis, a complete stoppage of construction activities is imminent. This was stated by Engr. Farooq-uz-Zaman Khan while talking to journalists. Billions of rupees of the public and builders are stuck up in these projects. If HBFC fails to provide the required housing finance, it is feared that the real estate and construction sector will face the same fate as that of Dubai, resulting in increased unemployment and other social problems, said Farooq-uz-Zaman. The difficult policies initiated by HBFC are impossible to comply with and have made it impossible to acquire housing finance. In the last financial year HBFC financed to the tune of Rs. 3.8 billion whereas in the current year a negligible amount of Rs. 700 million is disbursed. The new management of HBFC has no clue about the predicaments faced by the poor segment of our society and is replicating the policies of commercial banks and are trying to implement model of Singapore and Malaysia. The requirements have been made complicated and impractical. As per the new verification of income policy, income of all members of a household is required to be verified and on each verification case Rs. 5000 fee is levied. On the project policy file the processing fee is increased to Rs. 500,000. Even those allottees in a project, who are not interested in acquiring loans, are asked to provide the original ownership documents. Of the total number of 50,000 cases of HPZ, recoveries have been made in 35,000 cases and only 15,000 cases are active. The only exemption provided is to widows and on these cases to the payments to HBFC are being made. MrPressRelease App for iPhone During the last 4 years HBFC has recovered Rs. 17 billion and in the year 2008 recoveries have amounted to Rs. 3.2 billion whereas in the year 2009 Rs. 3.6 were recovered. In the years 2005-2008

a total amount of Rs. 10 billion were recovered and in the last two years Rs. 6 billion have been recovered. Answering a question Chairman ABAD said there is a shortage of 8 million housing units and keeping in view the loaning profile of HBFC it seems that the back log of housing units would never be wiped out. Vice Chairman ABAD Muhammad Arif Siddiq said HBFC has stopped loan disbursement to public projects. The corporation is following the policy of commercial banks, sidelining the redressal of difficulties of the public. Chairman ABAD-Southern Region Saleem Kassim Patel said the percentage of Non Performing Loans (NPL) is declining. The pattern of NPL in HBFC is different from that of commercial banks. In housing finance, all loans are backed by a collateral or mortgage. Post dated checks are acquired from the client and the corporation has right to take over the property to recover the loan. He added that in 2004 the NPL of HBFC was 67% which has gone down to approximately 37% now. ABAD suggested to the Government that State Bank of Pakistan and HBFC should be provided structural and financial support in order to improve the capabilities of HBFC. The policies of HBFC should be made public friendly. Instead of providing loans to upper and high income segment, the target should be the lower and middle income group. Steps should be taken to improve the Mortgage to GDP ratio. HBFC should implement a policy of decentralization and the regional chief should be empowered to approve loans at district level. The target set for providing finance should be achieved at all costs. An effective mechanism for recoveries should be made so that the problem of shortage of funds is solved.

COMPANY PROFILEHouse Building Finance Company LimitedThe House Building Finance Company Limited (the Company) is an unlisted public company, incorporated in Pakistan on June 13, 2006 under the Companies Ordinance , 1984. The Registered office of the Company is situated at Finance and Trade Centre Shahrah-e-Faisal, Karachi. The Company has taken over all assets, running business, contracts, liabilities and proceedings of the House Building Finance Corporation (HBFC), established in 1952 under the House Building Finance Corporation Act 1952(XVIII OF 1952) by the Government of Pakistan from closing of the business on December 31, 2006, the effective date, pursuant to a Vesting Order SRO.I/2007 dated July 25, 2007 issued by the Finance Division- Government of Pakistan. Accordingly, HBFCL is no longer a statutory institution. To date, HBFCL has financed around 456,256 units for Rs.47.82 billion, successful recoveries of Rs.64 billion (inclusive of mark up) and has a housing portfolio of Rs.14.6 billion. At present the Company is handling over 77,666 operative accounts with a work force comprising of 951 officers and support staff. The Company operates throughout Pakistan including Azad Kashmir and Northern areas.

House Building Finance Company - Fraud By MdDiscussion in 'Corporate Governance' started by my_words, Apr 23, 2012.

1. my_wordsNew Member

Corporate Governance is about those who govern corporate entities. In our country even MD of government owned companies acquire position fraudulently and there is no one to take action. Stae Bank of Pakistan, SECP are party to fraud and just see the wastage of money of citizens of Pakistan in the hands of fraudulent foreign national MD. Turnover is the parameter to judge the progress of institution. HBFCL has lost its business as its disbursement/ turnover/ lending has suffered extreme downfall during the current MD tenure. As reported by Ummat on 20.04.2012, before this MD , disbursements were Rs.3.85 billion rupee