Islamabad: Finance Minister Miftah Ismail, on Saturday (July 16), announced the restructuring of the Mera Pakistan Mera Ghar (MPMG) scheme to adjust the increased interest rates, news sources reported. The Minister said that the government will ensure that no one loses money following the restructuring of the scheme.
In a series of tweets, the minister reportedly explained the reasons behind the restructuring of the home finance scheme. He asserted that, while mortgage financing is accessible at significantly lower rates, actual market interest rates have risen by up to 15%. According to his statements, the programme cannot continue at the current offer rate since the government would be required to provide a significant subsidy. He stated that he had received letters from individuals describing the housing scheme and how they had spent money after their loans were approved to purchase homes.
Many people are writing to me that their loans were approved in the Mera Ghar scheme and that they have spent money based on that approval. I want to assure you that we are reshaping this scheme and no-one will lose their money. We will resolve the issues within the next week.
It is vital to note that the government temporarily stopped processing and disbursing cash under the programme for two months to strengthen its sustainability. The recently drafted agreement between the government and the International Monetary Funds (IMF) has asked the government to eliminate subsidies for financial stability.
The government has provided mortgage loans to homebuyers at substantially reduced interest rates of 3% for the first five years, 5% for the next five years, and KIBOR+2.5% for the following ten years. The banks have already authorised and issued the potential homebuyers a total of PKR 66 billion.
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