The government has issued a directive suspending the popular ‘Mera Pakistan Mera Ghar’ (MPMG) Scheme. Banks, Development Financial Institutions (DFIs), and microfinance banks (MFBs) have been advised to put further disbursements on hold from July 1, 2022, till August 31, 2022.
In a circular issued on Thursday, the State Bank of Pakistan (SBP) said that the government of Pakistan is considering reviewing/revising features of the subject scheme in light of recent developments in the macroeconomic scenario.
“Accordingly, banks/DFIs/MFBs are advised to put further disbursements under MPMG on hold from July 01, 2022, till August 31, 2022.
“However, in those cases where partial disbursements have already been made till June 30, 2022, banks/DFIs/MFBs may release remaining disbursement under MPMG,” the circular added.
Meanwhile, the SBP has announced the suspension of the Prime Minister’s Kamyab Jawan Youth Entrepreneurship Scheme (PMKJ-YES) scheme for 15 days. This is due to the government of Pakistan’s consideration to review/revise the features of the scheme in light of recent developments in the macroeconomic scenario. Consequently, banks participating as executing agencies under PMKJ-YES are advised to put on hold fresh disbursements from July 1, 2022, to July 15, 2022.
The Pakistan Tehreek-e-Insaf (PTI) government launched two schemes in 2020 aimed at providing affordable housing and entrepreneurship loans. As of the latest available data, applications worth Rs473.7 billion have been submitted under the MPMG scheme, with banks approving Rs212.3 billion and disbursing Rs85.2 billion.
The scheme provides low-cost housing loans with mark-ups ranging between 3% and 9% for the first ten years before switching to market rates after 10 years. The move comes as Pakistan faces budgetary constraints, which have triggered a series of measures including the imposition of a supertax, higher income tax rates for the salaried group, and the removal of subsidies on energy.