The Economic Coordination of Cabinet approved Rs. 13.2 billion technical supplemental grant (TSG) for Pakistan Mortgage Refinance Company Limited (PMRC) to raise capital debt market funds at lower rates to fulfil major mortgage lenders’ medium and long-term needs.
On the Ministry of Finance’s summary, the ECC meeting, chaired by Finance Minister Ishaq Dar, authorised TSG in favour of PMRC for $50 million from the World Bank as the first tranche of a $85 million credit line.
PMRC was created by the government, commercial banks, and development finance institutions (DFIs) with the support of the International Finance Corporation (IFC) and the World Bank (WB) to provide primary mortgage lenders with medium- and long-term capital debt market funding at lower rates.
NBP, HBL, UBL, IFC, Askari Bank, Bank Alfalah, ABL, Bank Al Habib, HBFCL, and Summit Bank own 71.14 percent of PMRC, while the government owns 28.86 percent. PMRC received an SBP business certificate on 12-06-2018.
In 2018, the World Bank gave the government $140 million to lend to PMRC at 3%. On 10-03-2022, the World Bank granted the government an additional $85 million credit line for the Housing Finance Project, which will be loaned to the government-owned Credit Guarantee Trust Fund (CGTF) and managed by PMRC.
On 29-11-2022, the ECC authorised a summary of a new plan called Credit Guarantee Trust plan for low-income housing, Mera Pakistan Mera Ghar (MPMG), through Second Supplemental Trust Deed with $85 million from the World Bank. The cabinet approved on 08-12-2022.
On 15-12-2022, the government and PMRC signed the second supplementary trust deed, which was registered by the Directorate of Labour and Industries, Islamabad on 20-12-2022.
First-tranche $50 million payout has begun. The Finance Division has allotted Rs. 1 billion Federal Miscellaneous Investments & Other Loans and Advances for the current fiscal year to meet the Pak rupee equivalent of the money for PMRC.
A letter to AGPR requests the formation of an Assignment Account in the National Bank of Pakistan, Karachi in the name of PMRC – Trustee Credit Guarantee Trust Scheme for low-income housing – MPMG to operate the Trust Fund. To release $50 million from the World Bank, Rs 14.2 billion at the current currency rate of Rs 284 per US$ is needed.
The Finance Division has allotted Rs. 1 billion under federal miscellaneous investments & other loans and advances for fiscal year 2022-23 for the Pak rupee equivalent of the abovementioned funds, therefore Technical Supplementary Grant will provide Rs 13.2 billion.