Expanding Housing Finance to the Underserved in South Asia
4
Table 4.2 Total Mortgage Balances Outstanding and Market Shares
Bank Mortgage Financing (%)
State Specialized Mortgage Financing (%)
Private Specialized Mortgage Financing (%)
Afghanistan (no balance available)
100
0
0
Bangladesh (Tk 142.4 billion)
64
17
12
India (Rs 3,970.0 billion)
66
4
30
Pakistan (PRs 89.9 billion)
76
13
0
11
Sri Lanka (SL Rs 181.0 billion)
75
25
0
0
Country (Balance)
Islamic Mortgage Financing (%) No separate estimate exists; amount is included in “Bank Mortgage Financing” column 7 No separate estimate exists; amount is included in “Bank Mortgage Financing” column
Source: Zaigham Rizvi, 2009.
financial institutions controlling more than two thirds of the market. In contrast to other South Asian countries, the central bank, Reserve Bank of India, shares regulatory oversight of the housing sector with the National Housing Bank, the second-tier refinancing institution that is also responsible for regulating HFCs. Indian banks account for roughly two thirds of the market, having overtaken the HFCs, which had enjoyed a considerable lead. Lending for housing by commercial banks as a percent of gross credit outstanding was up from roughly 4 percent in 2001 to about 11 percent in 2008. In Pakistan, the share of commercial banks in housing finance grew from 10 percent in 2003 to more than 70 percent in 2009. However, the state-owned Bangladesh House Building Finance Corporation (BHBFC) is the only institution that caters to the financing needs of middle- and low-income groups, servicing some 71 percent of housing finance borrowers. Banks dominate housing lending in Sri Lanka as well, where private specialized mortgage lenders are not well developed. In fact, banks and state-owned specialized mortgage lenders are the sole players in the country’s market.
State-Owned Specialized Housing Banks To fill in the gaps left by commercial bank mortgage lending, especially for lowermiddle- and low-income, remote rural, or informally employed population groups, South Asian countries have established state-owned housing banks, which usually 22