Banks must fast track products for construction industry

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Karachi: Ismail Suttar, President of Employers Federation of Pakistan(EFP), has on behalf of the investors in construction sector urged Dr Reza Baqir, Governor State Bank of Pakistan to impress upon the banking sector to introduce friendly bank products on war-footing basis to avoid any further delay in availing the incentives in the construction policy.

EFP, which is Apex body of the Manufacturers of Pakistan, wants banks to immediately allocate substantial percent of their portfolio to provide collateral-free mortgage credits without asking about sources of income about projects that need to be financed. The private sector has pledged an investment of US $1 trillion before the end of the specified period of December 2020 to avail the benefits under the policy.

In a statement, EFP has also raised concern that it has been over one month and already 330 cases are in the backlog of Sindh Building Control Authority due to non-implementation of the policy. He added that the construction industry contributes only 0.5 percent toward the GDP of Pakistan and has hardly got a chance to proliferate due to absence of one-window structure, financing, and lengthy documentation procedures. Hence only around 65,000 builders out of a 220 million population are active in the construction sector.

“A boom in the construction sector would jump start the economy and reactivate many industries that have closed down due to the lull in the construction sector. Moreover, COVID19 has very seriously impacted on the employment of people and job losses are expected to increase to 15 to 18 million. A surge in construction would enable the unemployed to seek jobs in the more than 45 industries that cater to the construction sector. Most of the workers can be trained in a rapid mode and this would stem the social disruption that has emerged out of the pandemic crisis”, he added.

Ismail Suttar reminded the Presidents of banks and other lending agencies that the time bound inflow of no-questions-asked investment is December 2020 and time is running out. They must fast track their lending policies if the construction policy is to succeed and the objectives of economic turnaround are positively achieved.