Pensioners Finance

PENSIONERS FINANCE

There are large number of pensioners in Pakistan from various sectors of government. At the end of service this segment has savings from their end service benefits and it may create desire to acquire a home. Those Primary Mortgage Lenders (PMLs) who provide mortgage finance to Pensioners can avail this facility from PMRC.

Target Market

Financial Institutions (FIs) including Banks/DFIs/HFCs/MFBs/MFIs/NBFCs

Type of Financing Options

Refinancing

Refinance can be availed against existing mortgage loan portfolio.

Pre-financing

Pre-finance option is also available for institutions which do not have existing mortgage loan portfolio however intend to enter into housing finance market.

Mode of Finance

To cater the Conventional and Islamic financial institutions, both mode of financing is available.

  • Conventional
  • Islamic

Product Features

  • Pre-finance and refinance options
  • Refinance loan against existing eligible housing finance portfolio
  • Fixed rate, medium and long-term loan funding

Eligibility Criteria

  • FIs may consider pensioners of following categories
  • Pensioners of Federal Government
  • Pensioners of Provincial Government
  • Pensioners of Armed Forces
  • Pensioners of autonomous bodies
  • FI shall have approved policy from their management for underwriting pensioners
  • Housing finance portfolio for pensioners shall be in compliance with SBP housing
  • finance PRs
  • Maximum age of borrower for pension segment shall be in compliance with banks
  • internal approved policy
  • Pensioner should be borrower/co-borrower
  • Housing loan shall be for construction/renovation and/or first home purchase.

Tenor

  • Pre-finance up to 3 Years
  • Refinance up to weighted average life/tenor of existing pensioners portfolio

Pricing

  • Base Rate +/- Spread/discount

Repayment Frequency

  • Quarterly/Half Yearly

Government Employees

 

GOVERNMENT EMPLOYEES PORTFOLIO FINANCE

Due to large number of govt. employees, there is a huge potential for Primary Mortgage Lenders (PMLs) to explore this segment. PMRC has designed special product for refinancing/prefinancing Govt. Employees Portfolio. For a prefinance facility, customers may provide existing mortgage loans portfolio as a temporary security and upon origination of desired portfolio under this category, the old portfolio will be replaced.

Mode of Finance

To cater the Conventional and Islamic financial institutions, both mode of financing is available.

  • Conventional
  • Islamic

Eligibility Criteria

Federal and provincial government employees and armed forces in permanent cadre. Contractual employees will not be eligible to avail financing under this facility.

Mandatory Security Features in Housing Finance Product

Letter/Undertaking from AGPR/DDO/Payroll Officer/Military Accounts Office/Any relevant office holder authorized to disburse employee’s salary, to ensure [FI name] or its assignee having following conditions:

  • It will deduct an amount specified by [FI name] or its assignee from retirement benefits of the Customer at the time of retirement to make balloon payment for adjustment of outstanding loan.
  • It shall keep the employee’s end-service benefits free of loan to the extent of the [FI Name] or its assignee outstanding loan amount.

Tenor

  • up to 3 Years

Pricing

  • Base Rate +/- Spread/discount

Repayment Frequency

  • Quarterly/Half Yearly

Govt Markup Subsidy Scheme(G-MSS)

Developer Finance

Developer Finance in Pakistan is very limited. Presently, Primary Mortgage Lenders (PMLs) are providing housing finance to individual in higher income bracket. This excludes majority of population in low and middle income segment that is working in formal and informal sector. Recent development shows Government’s focus on low-cost housing and several measures have been taken by SBP to promote this sector. However, there is shortage in supply side of low-cost housing which has to be met with new projects. With the recent incentives of Government for construction sector, there is huge demand for developer finance. Purpose of this product is to provide funding for development of housing colonies/projects/apartments of entire amount during the tenor for which financing is being extended. PMRC will provide funding to PMLs which will then on-lent to builders/developers.

 

Type of Financing

  • Prefinance

 

*Product Criteria

  • Builder/Developer/team should possess a valid builder/developer license from building control authority, where applicable.
  • Builder/Developer must have at-least 3 years’ experience with good track record
  • There should be a clear and marketable title to the land, free of encumbrances, charges and liens on which the project will be built in case it is offered as collateral by the builders/sponsors

 

Registration certificate of the firm/company

  • Memorandum and Articles of Association/Partnership Deed/Business Charter (in case of Sole Proprietorship)
  • List of the technical staff
  • Pakistan Engineering Council certificate and experience certificates
  • List of recently completed projects (if any), along with copies of Completion Certificates submitted to concerned authorities
  • Any other document(s) required by the bank/DFI

 

Security Structure

Following securities can be considered as collateral for financing:

  • Assignment by way of security of a specific existing Mortgage Loan Portfolio or receivables from builders/developers
  • Any other security as may be required by and is acceptable to the Company such as PIBs & T-bills etc. (Alternate Security) in SGLA Account of PMRC.

 

Tenor

  • Pre-finance 1 to 3 Years
  • Refinance as per weighted average life of portfolio with repricing at agreed frequency

 

Pricing                                                                                                                                                                   

  • Respective tenor PKRV +/- Spread

 

Repayment Frequency

  • Quarterly/Half Yearly

 

* Product Criteria is subject to change.

Low Income Group

Demand for low-income housing is massive however Primary Mortgage Lenders (PMLs) are reluctant to enter this segment due to high risk factor. To encourage PMLs to concentrate in this segment, better discount rates are offered as compared to Business as Usual (BAU) and Middle Income Group (MIG) products. By opting for this product, PMLs are required to generate mortgage loans that meet the eligibility criteria for the low-income segment. Long term fixed rate facility enables PMLs to generate fixed rate, long term mortgage housing finance loans.

Type of Financing

  • Refinance
  • Prefinance

 

*Product Criteria

  • Individual Income: Should not exceed PKR 125,000
  • Household Income: Should not exceed PKR 165,000
  • Loan Amount: Should not exceed PKR 10,000,000

 

Security Structure

Following securities can be considered as collateral for financing:

  • Assignment by way of security of a specific existing Mortgage Loan Portfolio
  • Any other security as may be required by and is acceptable to the Company such as PIBs & T-bills etc. (Alternate Security) in SGLA Account of PMRC.

 

Tenor

  • Pre-finance 1 to 3 Years
  • Refinance as per weighted average life of portfolio with repricing at agreed frequency

 

Pricing                                                                                                                                                                   

  • Respective tenor PKRV +/- Spread

 

Repayment Frequency

  • Quarterly/Half Yearly

 

* Product Criteria is subject to change.

Middle Income Group

Primary Mortgage Lenders (PMLs) penetration is very low in the middle-income group. To encourage PMLs to concentrate in this segment, better discount rates are offered as compared to Business as Usual (BAU) product. By opting for this product, PMLs are required to generate mortgage loans that meet the eligibility criteria for the middle-income segment. Long term fixed rate facility enables PMLs to generate fixed rate, long term mortgage housing finance loans.

Type of Financing

  • Refinance
  • Prefinance

 

*Product Criteria

  • Individual Income: Should not exceed PKR 200,000
  • Household Income: Should not exceed PKR 400,000
  • Loan Amount: Should not exceed PKR 20,000,000

 

Security Structure

Following securities can be considered as collateral for financing:

  • Assignment by way of security of a specific existing Mortgage Loan Portfolio
  • Any other security as may be required by and is acceptable to the Company such as PIBs & T-bills etc. (Alternate Security) in SGLA Account of PMRC.

 

Tenor             

  • Pre-finance 1 to 3 Years
  • Refinance as per weighted average life of portfolio with repricing at agreed frequency

 

Pricing                                                                        

  • Respective tenor PKRV +/- Spread

 

Repayment Frequency

  • Quarterly/Half Yearly

 

* Product Criteria is subject to change.

Business as Usual

This product is designed to refinance existing mortgage loan portfolios of Primary Mortgage Lenders (PMLs). This allows PMLs to leverage their existing mortgage portfolio to generate new mortgage loans. Long term fixed rate facility enables PMLs to generate fixed rate, long term mortgage finance loans.

Security Structure

Following securities can be considered as collateral for financing:

  • Assignment by way of security of a specific existing Mortgage Loan Portfolio
  • Any other security as may be required by and is acceptable to the Company such as PIBs & T-bills etc. (Alternate Security) in SGLA Account of PMRC.

 

Type of Financing

  • Refinance
  • Prefinance

 

Tenor             

  • 3 Years to 5 Years

 

Pricing

  • Respective tenor PKRV +/- Spread

 

Repayment Frequency

  • Quarterly/Half Yearly

Benefits of PMRC Financing

  • Reduced Maturity mismatch – Improved ALM.
  • Reduced Market risk – Fixed rate Loans.
  • Stable source of funding.
  • Reduced Credit Risk- Improved Affordability of Consumer.
  • Borrowings from PMRC are exempted from maintenance/calculation of CRR/SLR
  • Exemption in general provisioning for portfolio refinancing loans from PMRC.
  • Reduced Risk Weightage for PMRC refinanced mortgages.
  • Exemption from real estate lending limits – more exposure for Housing Finance.
  • PMRC’s funding will increase housing finance portfolio of banks thereby creating long term funding source.
  • Banks can cross sell different products to new customers to increase profitability.
  • Leveraging existing portfolio for additional lending.
  • Prefinance option available to generate mortgage loan portfolio.
  • Specialized products for low and middle income segment with price incentive.
  • Mortgage loans portfolios of Pensioners and Govt. employees can be refinanced.
  • PMRC assistance for capacity building and product innovation.
  • Fax
  • +92(21)35633365
  • Registered Address
  • Finance & Trade Center, 4th Floor, Block-A, Shahrah-e-Faisal, Karachi -74400, Pakistan.