Finance adviser asks BHBFC to lower lending rate

The finance adviser has asked the Bangladesh House Building Finance Corporation (BHBFC) for providing loans at an interest lower than the private sector housing financiers offer.
“As a government entity, you [BHBFC] have some social responsibilities. Both the government and common people expect that the corporation offers a rate of interest lower than other housing financers,” Dr AB Mirza Azizul Islam told the annual conference of the state-run housing funding agency yesterday.
Held at Dhaka Sheraton Hotel, the conference was also addressed by BHBFC Chairman M Janibul Haque, Managing Director Raihana Anisa Yussuf Ali and former managing director AKM Sajedur Rahman.
The adviser advised the corporation officials to improve the quality of their service through reaching out to prospective clients outside the office instead of desiring the clients to come to them to address the problems relating to house-finance. “If the officials set this trend, it will not only widen the BHBFC lending programmes, but also help address the country's housing problems in future,” Aziz said.
In response to a proposal to augment the corporation's existing manpower, the finance adviser attached importance to the efficiency of the staff.
In this connection, he also pointed to the private organisations' better competitiveness in such capacity building.
Presently, the BHBFC has 456 employees against its requirement of at least 725 employees up to June this year. It has submitted a proposal to the finance ministry for an organogram of 825 employees.
On the corporation's proposed rise in its authorised and paid up capital, Finance Secretary Dr Mohammad Tareque asked the corporation to submit a detailed business plan in this regard.
The BHBFC, in the wake of increasing demand for housing loans, recently proposed to the finance ministry to increase its authorised capital from the existing Tk 110 crore to Tk 1,000 crore, and paid-up capital from the existing Tk 97.29 crore to Tk 650 crore to enhance its funding capacity.
During 2007-08, the BHBFC sanctioned Tk 226 crore, which was Tk 150 crore in 2006-07, while it disbursed Tk 147 crore in 2007-08 against Tk 114 crore a year ago.
The corporation made a profit (before tax) of Tk 161 crore last fiscal (2007-08), which was Tk 135 crore in FY 2006-07.
The BHBFC has also been able to reduce the rate of classified loans from 17.62 percent in 2006-07 to 14 percent in 2007-08.
It recovered Tk 389 crore in 2007-08, while the amount recovered in 2006-07 was Tk 387 crore.