Financing Real Estate Development in Bangladesh: A Study of the Housing Schemes of Some Selected Hbfis
Journal of Services Research › Nbr. 6, July 2006
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Summary
Real Estate Development has got a momentum in the recent years in Bangladesh. During the Eighties, HBFC (House Building Finance Corporation) was the only HBFI (House Building Financing Institution) that financed the real estate development in Bangladesh. To meet the growing demand for financing real estate development, a good number of HBFIs emerged in the area of financial services. They have come out with different financing schemes for financing real estate development in Bangladesh. It is also observed that real estate developing institutions are also facing a severe financial crisis. The present study has found that housing sectors are facing different financing problems such as, lack of adequate funds at reasonable interest rate, non-existence of level-playing field, inefficient debt market, higher default risk, huge amount of classified housing loan, legal flaws, access to housing credit, hesitance of HFIs (Housing Financial Institutions) to provide long-term loan etc. To eliminate these problems of housing sector, the study has suggested some policy measures such as expansion of financial resources to the private HFIs, broaden the scope of housing finance etc.
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Extract
Financing Real Estate Development in Bangladesh: A Study of the Housing Schemes of Some Selected Hbfis
INTRODUCTION
Housing has now become an issue of global concern. The share of urban population in Asia is 37% at present and is projected to be 45% by 2015. In Bangladesh, 25% of the population now lives in urban areas. This portion will be 34% by the year 2015. Bangladesh is the eighth largest populous country with respect to the share of world increase in population in urban areas (3%) between 2000-2030 (UN, 2001). With the continued growth of population, land for human settlement will shrink in tandem. The area occupied by human settlements and supportive infrastructure in Bangladesh is quite high at 30 percent (CPD, 2003).Bangladesh faces a major housing problem (ADB, 1995). With a very low GNP per capita ($ 260); very high population densities (over 750 persons per square kilometer in urban areas); and a higher population growth rate in urban areas (4.50 percent per year), the standard of shelter is correspondingly low. About 50 percent of our people are landless or owners of less than one acre of land per family from which one just cannot make a li...See the full content of this document
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