The New Nation - Internet Edition

UNB, Dhaka

The much-hyped home loan scheme of Bangladesh Bank has so far received a lukewarm response, prompting the central bank to think about revising its conditions for which the borrowers are shying away.

"The response is not good. Some of its conditions are not borrower-friendly," said a senior official at the central bank. He said the monthly repayment of around Tk 25,000 from one's monthly income of not more than Tk 30,000 is really difficult. An individual with monthly income of less than Tk 30,000 is eligible for the loan. According to Bangladesh Bank figures, partner banks and financial institutions disbursed only Tk 74,00,000 until January this year since the Tk 300 crore scheme was launched in July last year. "We'll have to streamline the scheme to make it simpler and more attractive," Bangladesh Bank deputy governor Nazrul Huda, who is in charge of the scheme, told UNB.

"We're now thinking how the scheme can be made more attractive to the borrowers," he said.

He was considering whether the interest rate could be reduced further from the existing 10 percent apart from expanding the areas eligible for the loan from the present six city corporations and four municipality areas (Tongi, Gazipur, Savar and Narayanganj). He said the newly developed areas surrounding the Dhaka City Corporation have potentials to come under the scheme. Huda said he would talk to the stakeholders, including the executives concerned of the partner banks and financial institutions, to identify the problems as well as invite suggestions from the people for making the loan programme more attractive. The central bank has introduced the home loan scheme to meet the rising demand for housing facilities of the lower-middle and middle-income groups of people with an initial refinancing fund of Tk 300 crore.

The partner banks and financial institutions have been assigned to operate the loan.

At the initial stage of operation, the maximum limit of loan was fixed at Tk 15,00,000 for a single borrower and it was later raised to Tk 20,00,000 for the convenience of the borrowers. The refinancing limit for the partner banks and financial institutions was also raised to 100 percent from previous 75 percent of the total loans to be sanctioned for a single borrower.