The Mera Pakistan Mera Ghar Scheme: Why has the Government Withdrawn Its Support?

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The government of Pakistan envisioned improving the accessibility of reliable housing and promoting the construction sector in hopes of generating economic activities. One way to achieve their vision was to gradually increase the construction of housing units in the coming years. Fortunately, the government was successful in initiating a promising program, the Mera Pakistan Mera Ghar (MPMG) scheme. 

Since July 2020, the State Bank of Pakistan has taken several steps to support the government’s endeavors in financing the housing and construction industry. The bank endorsed the initialization of the Mera Pakistan Mera Ghar scheme, which was launched in October 2020. The MPMG is a subsidy markup project liberalized by the government to benefit stakeholders of property and land in Pakistan. 

Pakistani banks associated with the MPMG scheme offer their customers affordable installment plans for the purchase of a complete residential property (Apartment/Flat/House), purchase of plot & construction thereon, construction on owned plot, and extension/expansion of the self-owned residential property. 

This scheme was launched under the governance of PTI and Imran Khan, the Prime Minister at the time, stated that Rs100 billion were approved under the Mera Pakistan Mera Ghar initiative, a monumental moment for the country. The former PM claimed that this program should have been introduced long ago.

IK stated that the government was aware of the struggles of citizens who were a part of the salaried class. Their limited assets were insufficient to accumulate enough capital for purchasing a house in the current property market. 

Moreover, the Pakistan Banks’ Association (PBA) formally launched the “Mera Pakistan Mera Ghar Helpline,” a shared call center for Pakistani banks accessible to all low-cost housing agents and clients all over Pakistan. 

How can MPMG Help Pakistani Citizens?

Former PM Imran Khan claimed that overseas Pakistanis who worked hard dreamed of building a home for themselves and their families. Sadly, the previous government ignored the well-being of the lower classes and spent most of their time, assets, and funding supporting the elites in all sectors such as health, education, and construction. 

He claimed that efforts for economic progress in Pakistan have not been inclusive of all socioeconomic classes, which he believes is one of the main factors contributing to the country’s economic downfall. Through initiatives like MPMG, ordinary Pakistani citizens can own their homes without going through the stressful and anxiety-inducing process of asking the bank for a loan. 

This project would elevate Pakistan’s economy by increasing the construction of housing projects. Such homes would be accessible through conventional and Islamic banking, and the MPMG scheme would generate financing for the building and purchasing low-cost housing with low-interest rates. Additionally, this scheme directly targeted middle and lower-class citizens to find affordable installment plans.

Furthermore, Pakistani banks have taken steps to make the MPMG scheme as accessible as possible. For example, the ‘Mera Pakistan Mera Ghar – Helpline’ call center, inaugurated by the governor of SBP, Dr. Reza Baqir, is a step towards achieving the former PM’s vision of affordable public housing. 

The Helpline would facilitate borrowers all over Pakistan in answering queries related to the purchasing process and getting them in contact with their preferred banks so they can achieve their home ownership dreams quickly and conveniently. 

Moreover, under the MPMG scheme, SBP has relaxed the eligibility terms of housing loans and increased the funding amount to encourage the citizens to utilize this initiative.

Why Did the Government Suspend MPMG?

Despite its positive impact on Pakistan’s economy and citizens, the new government announced the suspension of the famous ‘Mera Pakistan Mera Ghar’ (MPMG) Scheme. They advised all Development Financial Institutions (DFIs) and microfinance banks (MFBs) to place other MPMG processes on hold from 1st July to 31st August 2022.

According to recent information, the State Bank of Pakistan (SBP) claimed that the current government of Pakistan is contemplating reviewing and revising the MPMG scheme’s features due to changes in the country’s macroeconomic environment.

Additionally, an official statement claimed that the State Bank of Pakistan and the Finance Division have started working on reforming the scheme, which will be available to the public in the upcoming week.

This suspension means that PTI’s electoral promise of creating five million low-cost housing units in Pakistan remained unfulfilled at the end of the political party’s term in 2023. Unfortunately, from October 2020, the scheme’s progress was slow-paced due to the banks being skeptical about participating.

Furthermore, the suspension of this housing scheme seemed inevitable with Pakistan facing budgetary constraints and failing to pay its debt to the world bank. Such financial limitations triggered a contingency plan, which imposed supertax, rising income tax rates for the salaried class, and an absence of subsidies on energy sources. 

An immediate stop in the MPMG scheme’s processes has worried many citizens who invested in these loans. Many customers have submitted their complaints to the State Bank of Pakistan (SBP) through social media. Several complaints state that even though the customers were eligible to avail the benefits of the MPMG scheme and submitted the required documents on time, their release of payments keeps getting delayed by the bank.

The bank’s representative countered these complaints by using the economic uncertainty in the country as an excuse to hold the customer’s payments deliberately. They claim that the bank has a massive cue of cases stuck at the last stage of disbursements, and the bank is planning on keeping it that way till Pakistan’s macroeconomic situation settles.

The representative also shared that there is a high chance that SBP will suspend the scheme entirely or increase the interest rates on the low-cost housing units.

Conclusion

The Mera Pakistan Mera Ghar scheme was a progressive step for Pakistan and its economy. A massive percentage of Pakistan’s population cannot afford to purchase their own homes, but this initiative was an inclusive form of development for middle and lower- class Pakistani citizens.

However, the current economic state of the country and the unforeseen change in government has created a hostile environment that stifles the growth of the MPMG scheme, disappointing countless citizens who were planning on finally purchasing their dream homes.