INSTITUTIONAL CREDIT FOR URBAN HOUSING FINANCE IN BANGLADESH: AN ANALYTICAL REVIEW

M.  Hasan; A.  Kabir; M.A.  Alam; M.R.  Karim

doi:10.53808/KUS.2000.2.1.183-212-mb

Authors

M. Hasan Urban and Rural Planning Discipline, Khulna University, Khulna-9208, Bangladesh
A. Kabir Urban and Rural Planning Discipline, Khulna University, Khulna-9208, Bangladesh
M.A. Alam Urban and Rural Planning Discipline, Khulna University, Khulna-9208, Bangladesh
M.R. Karim Urban and Rural Planning Discipline, Khulna University, Khulna-9208, Bangladesh

DOI:

https://doi.org/10.53808/KUS.2000.2.1.183-212-mb

Keywords:

Institutional credit; Urban h ousing; Housing finance; low income group

Abstract

Housing finance institutions of Bangladesh are playing an important role towards residential house construction in towns and cities of the country. However the assistance of these institutions is limited to a few fortunate ones, and the vast majority of the urban dwellers are left out of their services. This paper has identified a number of reasons regarding inadequacy and inefficiency of these inst itutions. Firstly, the volume of loan disbursement by these institutions is grossly an adequate to cater for the requirements of the urban people. Secondly, the general poverty of the urban low and lower-middle income group, the majority of whom even cannot meet the basic criteria for loan allocation like ownership of a piece of land. Thirdly, failure of housing loan recovery system of many of these institutions which restricted further flow of funds for new house construction. Fourthly, corruption, rent seeking and bureaucracy in many of these financial institutions, which often favor a vested interest group. And finally, lack of adequate and pragmatic government policies and programs for urban housing development. This paper reviews institutional housing finance system in today’s Bangladesh, particularly its merits and demerits in the large metropolises, secondary cities and small towns. The paper examines the contribution of financial institutions in urban housing development, and assesses their performances. The paper also investigates ways and means for increasing institutional finance in urban areas of Bangladesh, and suggests a number of policy guidelines for the low and lower-middle income group in particular.

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