HOUSING FINANCING PROVIDED BY HBFCL

ANALYSIS OF
FAHAD ASHRAF (Spring09) Ms. Nazneen

RESEARCHER

LECTURER

INTRODUCTION

CORPORATION PROFILE
HBFCL is a Pakistans leading housing finance institution. Offering various services to the clients in every part of the country. Provided a range of housing finance products and services for nearly half a million housing units. Geared up to play a pivotal role in addressing the increasing housing shortage in the country.

CORPORATION VISION

Be the prime housing finance institution of the country,providing affordable housing solutions to low and middle income groups of population by encouraging new constructions in small & medium housing (SMH) sector.

INTRODUCTION OF STUDY

PURPOSE OF THE STUDY

The study is being researched to analyze that how better HBFCL contribute towards a housing strategy that increases the number of middle-income families with access to affordable housing finance. Second, by increasing the number of middle-income families, able to access market resources for housing finance.

RESEARCH OBJECTIVES
Reason being Housing Financing Blockage rapidly increasing in Pakistan. What measures being taken by HBFCL. Current trends in Housing finance.

Problem Statement

Current trends in Housing Finance by HBFC results shortage of housing units estimates that there is already a backlog of 7.5 million housing units, and the backlog increases by 270,000 units every year.

DATA METHODOLOGY
The application of my Research is Basic. The objective of my Research is Explanatory Research. The inquiry mode of the Research is Qualitative. Type of study is Descriptive. Extend of Researcher is indeed Minimal. Study setting is Non- Contrived. Unit of analysis is HBFCL Employees. Sampling design is Simple Random Sampling. Time horizon is Cross-sectional time is selected for this study. Population frame is 130. Sample Size is 97. Data Collection Method is Questionnaire, survey and Interviews.

Literature Review
All the data which I have accumulated regarding housing finance is based on both Primary & Secondary Sources. I had also visited different offices of HBFCL and other financial institutions in order to conduct interview.

I had also gathered the data using Search Engine , websites , newspapers , journals and HBFCL official website.

HYPOTHESIS

H0 : There is a relationship between HBFC house financing procedure ( Documentation , interest rate etc .) and declining in housing finance . HA : There is no relationship between HBFC house financing procedure ( Documentation , interest rate declining in housing finance .

etc .)

and

HYPOTHESIS
Statistical tools used Percentage method Correlation Percentage of Respondent =

No . of Respondent / Total no . of Respondent x 100 r = xy / x 2 * y 2

Formula for Karl Pearson s coefficient

Analysis of Results

Percentage Method
GENDER FREQUENCY PERCENTAGE

Male Female Total

42 8 50

84 16 100

Graphical Representation

Percentage Method
AGE GROUP FREQUENCY PERCENTAGE

19-25 26-30 31-above Total

16 28 6 50

32 56 12 100

Graphical Representation

Percentage Method
Type of Employment Self Employed Permanent Employee Daily wages Employee Contract Employee Total FREQUENCY 7 5 26 9 50 PERCENTAGE 14 10 58 18 100

Graphical Representation

Percentage Method
FAMILY SIZE FREQUENCY PERCENTAGE

2-3 Members 3-5 Members More than 5 Members Total

10 18 22 50

20 36 44 100

Graphical Representation

Percentage Method
MONTHLY INCOME FREQUENCY PERCENTAGE

10k 20k 20k 25k More than 25k Total

6 33 11 50

12 66 22 100

Graphical Representation

Percentage Method
Type of home ownership
RESIDENCE FREQUENCY PERCENTAGE

Own House Tenant For Free Total

5 39 2 50

10 78 4 100

Graphical Representation

Percentage Method
Have you ever used Housing Finance feature?
FREQUENCY PERCENTAGE

Yes No Total

7 43 50

14 86 100

Graphical Representation

Percentage Method
What purpose you need housing finance for?
PURPOSE Construction Purchase Renovation
Balance Transfer Facility

FREQUENCY 6 38 6 0 50

PERCENTAGE 12 76 12 0 100

Total

Graphical Representation

Percentage Method
Is HBFC working for commercial purpose or common people?
PURPOSE Commercially Common People Total FREQUENCY 42 8 50 PERCENTAGE 84 16 100

Graphical Representation

Percentage Method
Did HBFC meet your housing finance need?
Yes No Total FREQUENCY 4 46 50 PERCENTAGE 8 92 100

Graphical Representation

Percentage Method
What sort of problem you had to face to have Housing Finance ?
PROBLEM Interest Rate Time Period Income Bank Statement Documentation Total FREQUENCY 12 2 12 13 12 50 PERCENTAGE 24 4 24 26 24 100

Graphical Representation

Percentage Method
Do you think that HBFC is fulfilling its mean of being existence? As it came into being for the welfare of Middle and lower class to get rid of lack of housing units problems
FREQUENCY 3 47 50 PERCENTAGE 6 94 100

Yes No Total

Graphical Representation

HYPOTHESIS ACCEPTED
H0 : There is a relationship between HBFC house financing procedure ( Documentation , interest rate etc .) and declining in housing finance .

CO-RELATION
No of Years Documentations Interest Income

2010 2009 2008 2007

5 +2 5 +1 5 5

17.5% 17% 13% 11%

50k 50k 2.5k 2 k

Housing Financed

THEORETICAL FRAMEWORK
DEPENDENT VARIABLE INDEPENDENT VARIABLE and feasible house financing . looking for affordable Factors declining Housing units .

mmon people

INTERVENING VARIABLE HBFC , providing housing finance .

MODERATING VARIABLE

FINDINGS OF THE STUDY

84% respondents are male & 16% are female. 32% are age of 19-25, 56% are age of 26-30 and 12% are age of 31-above. 14% respondents are self-employed, 10% are permanent employees, 58% people are daily wages employees and 18% are contract employees. 20% respondents have 2-3 family size, 36% have 3-5 members and 44% more than 5 members. 12% respondents have monthly income 10k-20k, 66% have 20k-25k and 22% have more than 25k. 10% respondents have residence at own house, 78% are tenants and 4% reside in free house. 84% respondents agreed that HBFC working commercially and 16% disagreed.

FINDINGS OF THE STUDY

14% respondents have experienced housing finance and rest of 86% have not used housing finance. 12% need housing finance for construction, 76% need for purchase house and 12% need for renovation. 8% respondents said yes, HBFC meet their needs and 92% said No, HBFC did not meet their needs. 24% respondent are having to face Interest rate problem for housing finance, 4% time period, 24% Income, 26% Bank Statement and 24% are having documentation Problems. 6% respondents agreed that HBFC fulfils meets its reason of being and 94% disagreed.

CONCLUSION

The study analyzed that the purpose of HBFC came into being i.e for the welfare of shelterless people is negative. The Corporation should work for the sake of common people rather than working commercially for upper class, by proving shelter-less affordable house financing facilities, so that the backlog of housing units can be surmounted as the earliest.

RECOMMENDATIONS
The Department (HBFC) should focus on its vision i.e for the welfare of common people of Pakistan rather than for the sake of Commercial purpose i.e for upper class.

The Department (HBFC) should focus for the welfare of middle and lower class or those who are deprived for owning homes.

The procedure of providing loan for housing finance should be affordable and long-term plan for the middle and lower class.

The Bank Statement Condition should be eliminated for the eligibility of providing loan as the common people dont have usually Bank Account.

RECOMMENDATIONS
The Department (HBFC) should help country capturing the backlog of housing units in the Country.

The Department (HBFC) should have commitment to Excellence & Innovation.

THE END