The New Nation - Internet Edition

THE HBFC is reported to have introduced a new credit policy with effect from yesterday. The policy may help make extension of financial support to the middle class and lower-middle class people easy and pragmatic. The loan money may be used for purchasing flats in different areas in Dhaka and Chittagong cities. The loan-receivers are to declare that they have no house or flat in these cities before applying for loans. The loan may be repaid with a maximum interest rate of twelve percent and the schedule of such repayment may be fixed within the range of five to fifteen years. The sanction of loans will be made at the shortest possible time during which locations of houses and flats plus the prospect of house rent and the income of loan receivers may be reviewed by officials of the HBFC.

The Bangladesh House Building Finance Corporation, set up in the fifties of the past century has, so far, provided loans for construction of both commercial and residential buildings. It has invested money as per provisions of laws and regulations. Those applying for loan have to follow the procedures of the HBFC. They have to submit valid documents on the ownership of their land and plans and structural designs approved by concerned authorities. The time frame within which the construction of buildings has to be completed was determined for the purpose. The policy and procedures followed by the HBFC so far facilitated credit support to higher income groups of people. The loan-receivers were to purchase land from their own resources and also bear part of the cost of construction. The members of the low-income groups of people remained beyond the spell of fiscal support from the HBFC.

The amount of loans and the rates of interest plus the schedule for repayment of loan money to the House Building Finance Corporation were determined in the process. The use of the loan-money for purchase of construction materials as well as for payment of wages of workers were to be ensured by the recipients for loans. HBFC officials, sometimes, visited the construction sites to monitor the use of loan money. The money released by the finance corporation as per schedule was to enable the recipients of loan to complete the work on time.

The prevailing conditions in the major cities like Dhaka and Chittagong and other urban areas are quite pronounced. The inflow of people from rural areas have increased. All of them look for employment and assurance of earnings needed for meeting their basic needs including housing facilities. That being so, the move of the HBFC may enable the middle and low income people to buy and own flats in city areas sounds good. The availability of fund to be distributed by the corporation should, of course, be ensured by authorities concerned.