Karachi – November 18, 2022: Mobilink Microfinance Bank Limited (MMBL), Pakistan’s largest digital bank, and U Microfinance Bank Ltd. (U Bank), Pakistan’s fastest-growing microfinance bank, have entered into a strategic partnership for providing housing finance facility for their employees. 

The MoU was signed between Ghazanfar Azzam, President & CEO – MMBL, and Kabeer Naqvi, President & CEO – U Microfinance Bank, at a ceremony held in Islamabad, in the presence of senior officials from both organizations. Under this partnership, U Bank and MMBL employees can seek housing finance from each other. Eligible employees would have the opportunity to access affordable housing finance of up to PKR 3 Million to purchase a new house, flat, apartment, or plot for construction, as well as to construct a house on a pre-owned plot or add an extension to an existing housing unit. The loan application process has been simplified to facilitate fast-track processing and efficient disbursement of the loaned amount.

“Financial inclusion is not merely a customer-facing ambition but rather encompasses any and all people who wish to upgrade their quality of living through economic empowerment”, said Ghazanfar Azzam, President & CEO, MMBL. “As an employer of choice, we are vigilant of opportunities to holistically support our greatest asset- people, as much as possible. This partnership with U Bank will help enable our valued human resources with financial security during the uncertain economic conditions of the modern era,” remarked Azzam.

Also sharing his thoughts, Kabeer Naqvi, President & CEO – U Microfinance Bank said, “Our people are our most valuable asset. We aim to continue to provide services which improve their wellness and living standards. They are at the heart of who we are. We are pleased to collaborate with MMBL to facilitate employees on both sides. This also reaffirms U Bank’s belief that the microfinance industry as a whole can synergize and work in harmony to attain mutual goals.”

With influential positions in the market and reputations for exceptional employee culture, both MMBL and U Bank have been at the forefront of several initiatives driven toward the sustainable development of their customers and employees. 

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Recording an unprecedented growth of 85%, the banks’ outstanding credit for housing and construction has increased by Rs163 billion, from Rs192 billion to Rs355 billion, during 2021.

Within the housing and construction portfolio, disbursements under Government Markup Subsidy scheme, also known as Mera Pakistan Mera Ghar (MPMG), increased by Rs38 billion.  Financing to Housing and Construction and particularly under MPMG has witnessed impressive growth on the back of many enabling regulatory environments introduced after extensive consultation with stakeholders.

Further, State Bank of Pakistan (SBP) also advised the banks to increase their housing and construction finance portfolios to at least 5% of their domestic private sector advances till December 2021, introducing a set of incentives and penalties to ensure compliance.

In the significant growth of Housing and Construction finance, Habib Bank, Meezan Bank and Bank Al Habib were the top three contributors. Banks also made significant progress in the provision of financing under MPMG scheme, introduced in 2020. 

Financing under MPMG picked up momentum in 2021 as approvals for financing by banks grew from near zero to Rs117 billion in 2021. The banks have received requests of financing of Rs276 billion from potential customers, which indicates that approvals and disbursements will keep growing in coming months. Bank Alfalah emerged as the leading bank with highest disbursement of Rs3.3 billion followed by nine banks with disbursements of over Rs2 billion each. These include Meezan Bank, Bank Islami, National Bank, Standard Chartered Bank, HBFCL, United Bank, MCB Bank, Bank of Punjab and Habib Bank. To learn more about MPMG please see https://www.sbp.org.pk/MPMG/index.html

SBP has taken a number of steps to create an enabling regulatory environment for banks to increase flow of financing to housing sector. Key initiatives include allowing acceptance of third party guarantee during the construction period, waiver of Debt Burden Ratio (DBR) in case of informal income and the introduction of standard facility offer letter by the banks.

SBP  has also advised banks to develop and deploy income estimation models for borrowers with informal sources of income. In addition to gauge readiness, knowledge and appropriate behavior of banking staff towards MPMG customers, SBP is conducting regular mystery shopping surveys of bank branches all over the country. In line with initiatives of State Bank, banks have standardized and simplified loan application forms.