Meezan Approves Rs49bn Home Loans But Only 1,000 Families Funded

LAHORE: Meezan Bank has approved 6,880 home financing cases worth about Rs49 billion under the prime minister’s Apna Ghar programme, yet only 1,000 families had received their money by the end of September, a gap that shows where Pakistan’s housing push now strains.

The bank said on Friday that disbursements under the Wazir-e-Azam Apna Ghar Program, known as Ghar Ho Tu Apna, stood at Rs7.34 billion on September 30. It has received more than 27,800 applications worth roughly Rs179 billion: 13,474 for Rs100.7 billion through its own branches and 14,397 for Rs78.65 billion through the Pakistan Housing Authority portal.

Put another way, about one application in four has been approved, and about one approved case in seven has reached the stage where a family is paid.

The approvals are moving faster than the handovers. On September 2 the bank reported 4,424 approved cases and some 650 families financed. In the five weeks since, approvals have grown by more than 2,400 while the number of funded families has risen by about 350.

“At Meezan Bank, we believe that Islamic finance can play a meaningful role in making home ownership accessible to a much larger segment of society,” said Ahmed Ali Siddiqui, the bank’s group head of consumer finance. Through the scheme, he added, the bank was committed to working with the government to turn the aspiration of owning a home into reality for thousands of families.

One applicant’s experience explains the distance between the two numbers. Usman, who applied through Meezan in June, told The Lahore Times he had waited a long time for a scheme of this kind. “The bank’s process and the waiting kill the excitement,” he said.

After months, a bank representative told him his financing had been approved in full, up to the Rs10 million ceiling. “This is really very exciting for me and my family,” he said, thanking the bank’s staff. Then came the next instruction: find a house that is ready and has complete, cleared papers, including the registry and the intiqal, before the case can go further.

That is the step where many approvals stall. The bank itself said last month that approved cases turn into disbursements only as customers complete property selection and documentation.

International lenders have long pointed to the same bottleneck. The International Finance Corporation, the World Bank’s private-sector arm, has described Pakistan as one of the hardest countries in the world in which to get a home loan, citing fragmented land titles and weak foreclosure rules. Officials told a National Assembly committee in May that mortgage finance amounts to just 0.3% of GDP.

The scheme is the government’s answer. Launched by Prime Minister Shehbaz Sharif on April 30, it offers first-time buyers up to Rs10 million for as long as 20 years, at a fixed five percent for the first ten, with no processing fee. More than 31 banks and finance companies take part, and Meezan, the country’s largest Islamic bank, provides the financing on a Shariah-compliant basis.

Nationally, the State Bank reported about 107,000 applications by June 30, of which 27,000 had been approved and more than 6,000 disbursed, worth Rs26 billion. The federal budget sets aside Rs71 billion in subsidy this year against a target of 150,000 homes by June 2027, in a country short of an estimated 10 million housing units.

The milestone drew attention abroad. Saudi-based Arab News reported the approvals at $177 million and noted the bank’s standing in Islamic finance.

Punjab offers a point of comparison. Its own interest-free home loan programme was recently honoured by the United Nations, though landless families there are still waiting. The federal subsidy will also be watched under the IMF programme, whose latest review Pakistan cleared this week.

Meezan said it remained committed to widening affordable home ownership through its branch network and its expertise in Islamic housing finance. For applicants like Usman, the approval letter is in hand. The house with clean papers is the part still to be found.