Cut in lending rates boosts loan growth of House Building Finance
Bangladesh House Building Finance Corporation (BHBFC) has revised down its lending rate in line with the market, which is helping the state-owned finance provider to achieve significant loan growth.
The financial institution cut its lending rate for rural clients to 8.5 percent in July from 10 percent earlier while it is now 9.5 percent for home loan borrowers in Dhaka and Chittagong, down from 12 percent.
The price adjustment attracted new clients for BHBFC and helped it achieve a 47 percent year-on-year growth in loan disbursement in the July-September quarter.
The institution disbursed Tk 78 crore in loans in the third quarter of the current year compared to Tk 53 crore in the same period last year.
The corporation received loan applications worth Tk 90 crore in its three-day Housing Finance Fair-2017 that ended yesterday in the capital's Sonargaon hotel.
“The response we received from the clients despite the adverse weather was fabulous,” said Debasish Chakrabarty, managing director of BHBFC.
The financier has made loans more affordable for the middle-income people, he said.
Moreover, the loan ceilings were also raised for the sake of people living in rural areas across the country, he said.
The government has committed to ensure housing for all by 2021 and BHBFC is one of the helping hands to materialise the goal, he said.
Commercial banks currently account for 76 percent of the market share in residential housing loans whereas BHBFC only 6 percent. The corporation plans to enhance its market share by giving loans for development of residence.
BHBFC has allocated Tk 400 crore for disbursement in 2017-18 and the target will be fulfilled by December thanks to a huge loan demand, Chakrabarty said.
The financial institution also got the go-ahead to increase its number of branches to 100 from the existing 29 to provide more rural people with loans, the top executive said. It also received regulatory approval to increase its capital to Tk 1,000 crore from existing Tk 110 crore, he said.
Its highest loan ceiling has also been reset at Tk 1 crore in July from Tk 50 lakh earlier, said Daulatunnaher Khanam, a general manager of BHBFC.
The highest repayment tenure has been increased by 10 years to 25 years, she said.
“We have also developed an official Facebook page to create awareness about the loan products of the institution and got good response.”
BHBFC has three kinds of loan schemes -- rural housing, metropolitan housing and housing for expatriates.
Under the metropolitan scheme, clients living in Dhaka and Chittagong metropolitan areas will get the highest loan of Tk 1 crore at 9.5 percent interest for different tenures ranging from 5 to 20 years.
The highest loan limit under the rural housing scheme has been set at Tk 60 lakh that will come with an interest rate of 8.5 percent for the highest 20 years.
The corporation for the first time has launched a loan scheme for the expatriates to bring home more remittance.
The special package for expatriates offers loan for the highest 25 years, said Zahidul Haque, another general manager of BHBFC.
“Expatriates can easily avail the loan which comes with easy conditions.”
Bangladeshis living in Middle Eastern countries, Malaysia, Singapore, the UK, US, Australia, Canada and Italy are entitled to get the loan, he said.