The government’s recently unveiled Rs3.2 trillion housing finance initiative, known as the Apna Ghar Programme, faces a significant constitutional challenge due to its continuation of interest-based lending despite a mandated deadline to abolish riba from Pakistan’s financial system by January 1, 2028.
Examining the scheme’s structure and timeline reveals a clear contradiction with constitutional requirements. The government has planned a five-year financing strategy, allocating Rs321 billion in the first year to support the construction of 50,000 housing units, with a total commitment of Rs3.2 trillion over the entire period. This approach implies that new interest-based loans will be extended well beyond the 2028 cutoff, directly conflicting with the constitutional mandate.
Furthermore, each loan under the programme carries a repayment term of 20 years. Consequently, loans issued near or after the 2028 deadline would continue to involve interest-based repayments for decades, effectively institutionalizing such financing long after the constitutional deadline. The scheme’s design includes a fixed 5% markup for the initial 10 years, followed by rates tied to market fluctuations, thereby not only sustaining but potentially expanding the role of interest-based banking at a time when the state is constitutionally bound to phase it out.
Officials involved in the programme appear to have overlooked this critical issue. Efforts to obtain comments from Information Minister Attaullah Tarrar were unsuccessful as he was unavailable for remarks.
Prime Minister Shehbaz Sharif officially launched the Apna Ghar Programme on Thursday, outlining it as a five-year plan to finance 500,000 housing units across Pakistan. The scheme offers loans up to Rs10 million, repayable over two decades, targeting low-income citizens to build homes on plots up to 10 marlas. Additionally, the initiative aims to boost economic activity in the construction sector and create employment opportunities.
At the launch event, which included senior officials such as Ishaq Dar, bankers, and industry representatives, the prime minister described the programme as a “sacred obligation” and a catalyst for economic growth. He emphasized that the scheme would be implemented nationwide, including in Azad Jammu and Kashmir and Gilgit-Baltistan.
However, experts warn that unless the programme is restructured to adopt interest-free or Shariah-compliant financing models, the continuation of long-term interest-based lending by the government could face serious constitutional challenges as the 2028 deadline approaches.
