The Economic Coordination Committee (ECC) of the federal cabinet has recently approved significant enhancements to the Mera Ghar Mera Aashiana (MGMA) mortgage financing scheme, a government initiative aimed at promoting affordable housing across Pakistan. Among the key changes, the ECC has raised the maximum loan amount available to applicants from previous limits to a substantial Rs10 million. This move is expected to facilitate greater access to housing finance for a larger segment of the population, particularly targeting low-cost housing projects.
The committee also agreed to standardize the mark-up rate at a reduced level of 5%, down from the earlier 8%. This reduction in interest rates is designed to make borrowing more affordable for prospective homeowners, thereby encouraging more people to participate in the scheme. The decision was finalized during the ECC meeting held on Friday at the Finance Division, chaired by Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb.
In addition to increasing the loan ceiling and adjusting the mark-up rate, the ECC approved several other modifications to the scheme’s original framework. These include expanding the eligibility criteria for housing units, allowing financing for homes up to 10 marlas (approximately 272 square yards) or flats measuring up to 1,500 square feet. The committee also set a fixed end-user pricing at 5%, which will help maintain consistency and transparency in the cost structure for beneficiaries.
The government has ambitious targets for the MGMA scheme, aiming to finance around 500,000 housing units over the next four years. To support this, the ECC approved a year-wise subsidy payment plan aligned with the disbursement of 50,000 housing units by June 30, 2026. This subsidy framework is intended to ensure that financial support is distributed efficiently and sustainably, keeping pace with the actual rollout of housing units under the program.
Since its inception, the Mera Ghar Mera Aashiana scheme has garnered a strong response from the public. Banks have received over 10,594 loan applications, amounting to a total requested loan value of Rs32.288 billion. Out of these, 344 loan applications have already been approved and disbursed, totaling Rs810 million. Prime Minister Shehbaz Sharif has emphasized that the size of loans and the overall portfolio of the scheme should strictly adhere to the approved parameters to maintain financial discipline and ensure the program’s long-term viability.
The ECC’s approval came after reviewing a detailed summary submitted by the Ministry of Housing and Works, which outlined the need for revising the scheme’s features to better meet the growing demand for affordable housing. The committee underscored the importance of continuing the scheme’s implementation through the State Bank of Pakistan’s established mechanisms, ensuring smooth coordination between financial institutions and regulatory bodies.
Furthermore, the ECC decided that all loans already disbursed under the scheme will be adjusted to reflect the new uniform mark-up rate of 5%, thereby ensuring fairness and consistency for all borrowers. The committee also highlighted that subsidy payments will be carefully aligned with actual loan disbursements and accommodated within the government’s annual fiscal budget allocations.
The broader objective of these revisions is to expand access to affordable housing finance, stimulate construction activities, and generate employment opportunities across the country. By adopting a balanced approach that combines risk-sharing and mark-up subsidies, the government aims to promote sustainable homeownership and contribute to the overall economic development of Pakistan.
In addition to the housing scheme updates, the ECC also approved a technical supplementary grant of Rs7.289 million for the Islamabad Capital Territory (ICT) component of the “National Programme for Enhancing Command Areas in Barani Areas of Pakistan.” This project focuses on improving agricultural productivity in rain-fed regions, which are critical for the country’s food security and rural livelihoods.
Moreover, the committee sanctioned a substantial supplementary grant of Rs6.61 billion for the Thar coal rail connectivity project. This initiative is crucial for facilitating the transportation of indigenous coal to power plants and industrial sectors, thereby enhancing energy security and reducing Pakistan’s dependence on imported fuels. The rail connectivity project is expected to play a pivotal role in supporting the country’s energy infrastructure and promoting the use of local resources.
Overall, the ECC’s recent decisions reflect the government’s commitment to addressing key economic challenges through targeted interventions in housing, agriculture, and energy sectors. These measures are anticipated to have a positive impact on Pakistan’s socio-economic landscape in the coming years.
