The Government of Pakistan in order to promote low-cost housing sector created a Guarantee Trust Scheme for Low-Income Housing (Trust), a trust established and existing under the laws of the Islamic Republic of Pakistan, acting through its trustee, Pakistan Mortgage Refinance Company Limited. The Trust shall invest the Funds received from GOP in Shariah compliant avenues such as Sukuk etc. Claim payment for overdue profit/rental amount will be covered under the Guarantee and in addition to it the trust will provide coverage for the outstanding buyout units as conditional Tabarru’/Gift.
The overall Islamic Guarantee scheme is based on the concept of Kafalah/Guarantee and Conditional Tabarru’/Gift. Under this Guarantee & Conditional Tabarru’ arrangement where the Trust is providing risk coverage to the qualified Islamic Participating Financial Institutions (IPFIs) incurring/classifying loss (of profit/rental & unit financing amount) as per Prudential Regulations in respect of their eligible low-cost housing portfolio. At any point in time, if the facility is settled in full by the customer or regularized through restructuring or the qualified IPFI sells the asset in the market and recovers the loss through proceeds and/or any other source(s), the recovery amount so received shall be returned to the Trust up to the amount of Guarantee & Tabarru’ arrangement paid by the Trust to the qualified IPFI.
Link for Shariah Structure
