SBP Boosts MFB Housing Loan to Rs5 Million

Islamabad, August 3, 2025, 01:35 PM PKT — The State Bank of Pakistan (SBP) has unveiled a bold move, hiking the housing finance limit for microfinance bank (MFB) borrowers to Rs5 million, effective August 1, 2025, to boost affordable housing in urban and rural areas, per official data. Introduced in May 2025 regulations, this Rs2 million increase from the previous Rs3 million cap targets individuals with up to Rs1.5 million annual income post-expenses, but restricts funds to construction or renovation, barring land purchases (capped at 90% of market value and 50% of the loan) with the rest for building.

This initiative aligns with the government’s low-cost housing push for lower- and middle-income groups, bolstered by the Economic Coordination Committee’s Rs72 billion mark-up subsidy for 50,000 units, set for cabinet approval and bank circulation last week, plus restored tax credits for 2025-2026. Recent interest rate cuts—1,100 basis points since June 2024, lowering the benchmark from 22% to 11% despite inflation risks—aim to spur mortgage financing. Web context on housing schemes shows mixed success, while posts found on X reflect hope and skepticism—some welcome access, others question implementation. Critically, the narrative of “housing relief” may mask funding challenges—web data hints at past delays, and X sentiment suggests distrust in execution, pointing to potential hurdles.