Pakistan’s National Assembly Standing Committee on Finance and Revenue on Thursday urged the federal government and the State Bank of Pakistan to simplify financing procedures and expand subsidy support under the Prime Minister Apna Ghar Programme (PM-AGP), as concerns grow over the country’s weak mortgage finance sector and limited access for low-income families.
The recommendations came during the committee’s 25th meeting at Parliament House in Islamabad, chaired by Syed Naveed Qamar. Senior officials from the ministries of finance, housing and works, and law and justice briefed lawmakers on the implementation of the subsidised housing finance initiative and proposed reforms to foreclosure and recovery laws.
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The committee stressed that affordable housing finance should remain accessible to deserving low-income households through “transparent, accountable, and inclusive mechanisms”.
Qamar told the meeting that affordable housing finance “must genuinely serve deserving low-income families through transparent, accountable, and inclusive mechanisms.”
He also highlighted the urgent need for stronger foreclosure and recovery laws to support the country’s underdeveloped mortgage market and improve banks’ confidence in offering long-term housing loans.
Low mortgage penetration raises concerns
Officials from the Ministry of Housing and Works informed lawmakers that the PM Apna Ghar Programme aims to help low and middle-income families purchase homes while stimulating construction activity and economic growth.
The scheme, approved in August 2025 and revised in March 2026, offers financing of up to Rs10 million for first-time homeowners. Borrowers receive loans at a fixed markup rate of 5% for up to 20 years under a 90:10 financing structure.
According to official figures presented to the committee, authorities had received 25,304 applications by April 30, 2026. Banks approved 8,990 applications worth Rs37.154 billion, while 1,845 beneficiaries received disbursements totaling Rs5.071 billion.
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Officials acknowledged that Pakistan’s housing finance market remains severely underdeveloped. Mortgage financing contributes only 0.3% to the country’s gross domestic product and accounts for just 0.56% of total private sector credit.
The government has set a target of financing 500,000 housing units over the next four years. Officials estimate the target will require nearly Rs3.2 trillion in financing support.
Lawmakers questioned whether banks and financial institutions possess the institutional capacity to meet such ambitious goals within Pakistan’s fragile mortgage ecosystem.
Committee seeks legal and banking reforms
Committee members also expressed concern about the limited outreach of housing finance facilities in rural and underserved areas, particularly among low-income and informal-sector households.
After detailed deliberations, the committee recommended that the federal government and the SBP introduce simplified loan procedures, flexible eligibility criteria, and stronger subsidy mechanisms to improve affordability and accessibility.
The committee further called for priority reforms to foreclosure and recovery laws to reduce non-performing loans and encourage sustainable mortgage expansion.
Officials from the Ministry of Law and Justice also briefed lawmakers on proposed amendments to “The Financial Institutions (Recovery of Finance) Amendment Act, 2026,” which seeks to revise housing finance recovery mechanisms and strengthen legal protections for lenders.
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Pakistan has long struggled with a shortage of affordable housing and limited access to formal mortgage financing. Analysts say structural banking reforms, stronger legal protections, and targeted subsidies remain essential if the government wants to expand homeownership among lower-income households and revive the construction sector.
