TDS Desk:

Bangladesh House Building Finance Corporation (BHBFC) is the only specialised state-run institution providing loans in the housing sector.

The demand for loans from BHBFC is increasing in this sector.

Due to its comparatively lower interest rates than banks and other financial institutions, many home loan seekers are leaning toward BHBFC.

However, the corporation is unable to provide loans at a satisfactory level because of a shortage of funds.

BHBFC is currently struggling to meet the housing loan needs of not only private sector applicants but also government employees.

In light of this situation, the institution has sought financial assistance of Tk 10 billion from the government to expand its loan disbursement in the housing sector.

At a board meeting held on 26 June, it was decided to request a 20-year loan from the government at a 3 per cent interest rate.

On 24 July, the corporation’s Managing Director, Md. Abdul Mannan, formally sent a letter to the financial institutions division of the finance ministry seeking this support.

Financial institutions division secretary Nazma Mobarek told “We’ve received the letter. It is true that demand for BHBFC’s housing loans is increasing. We are working on the matter. Recently, we have sought an opinion from the finance division. Let’s see.”

For over seven decades, BHBFC has been providing loans to the broader population for well-planned housing development. With the commitment of “Housing for All,” the corporation primarily serves the middle- and lower-middle-income groups through its 73 branch offices.

Its loan services have expanded beyond cities and metropolitan areas to all upazilas and key growth centers across the country.

BHBFC has submitted several pieces of data to the financial institutions division to justify the request for funds.

According to the corporation, it approved Tk 8.46 billion in loans and disbursed Tk 6.96 billion in the fiscal year 2022-23. It approved Tk 12.89 billion and disbursed Tk 9.16 billion In 2023-24.

In 2024–25 (outgoing), it approved Tk 13.34 billion but has only disbursed Tk 9.22 billion so far.

This means that in the outgoing fiscal year, the corporation has been unable to disburse Tk 4.12 billion in loans due to lack of funds.

TOTAL FUND

BHBFC has informed the government that since its establishment in 1952, it has never written off any loans. The institution has also never granted loan waivers. The rate of non-performing (default) loans has dropped from 25 per cent to 3.45 per cent. The organisation has no provisioning or capital shortfall. In addition to conventional loans, BHBFC also offers Shariah-compliant financing options. Loans taken from BHBFC can be repaid over a period of 20 to 25 years.

The corporation has also disclosed the total balance of its available funds. So far, it has received a total of Tk 44.50 billion across six sources. Of this, the paid-up capital is Tk 1.15 billion. The largest portion of the remaining funds comes from the sale of debentures, amounting to Tk 18.72 billion.

Additionally, the Islamic Development Bank (IDB) has provided Tk 9.28 billion in the first phase and Tk 7 billion in the second phase. Government loans stand at Tk 8.23 billion, while fixed deposits amount to approximately Tk 130 million.

The organisation has no outstanding installments with any of its funding sources. The interest rates on these funds range from 2 per cent to 5.86 per cent. Over the past three fiscal years, BHBFC has repaid Tk 3.24 billion to its lenders, including both interest and principal.

GOVERNMENT RECEIVING DIVIDENDS DESPITE FUND SHORTAGE

After a loan application is submitted, it goes through several stages before being approved by BHBFC. However, many of the loans that were approved a year and a half ago had still not been disbursed as of March this year. Among these pending disbursements, Tk 3.34 billion pertains to general loans, and Tk 500 million relates to housing loans for government employees.

The corporation has informed the financial institutions division that, despite loan approvals, it has been unable to issue checks due to an acute liquidity crisis. This has led to severe dissatisfaction among customers. Yet, in the 2022–23 fiscal year, BHBFC paid Tk 830 million in dividends to the government from post-tax profits. For the 2023–24 fiscal year, BHBFC declared another Tk 500 million in dividends—further straining the current financial situation.

BHBFC managing director Md Abdul Mannan said, “As per the decision of our board, we have formally requested Tk 10 billion in funding from the government, presenting detailed justification. We hope the government will consider this positively.”