Twelve financial institutionsfive commercial banks and seven non-banking financial institutionshave so far signed ‘participation agreements’ with the Bangladesh Bank (BB) to use funds of housing refinancing scheme of the central bank.

The financial institutions are now ready to offer home loan with a top interest rate of 10 percent, the lowest available rate in the country at present.

They signed the deal with the BB following a central bank’s directive to those to increase lending in productive sectors, including housing.

The banks are National Credit and Commerce Bank Ltd, Mercantile Bank Ltd, Prime Bank Ltd, Mutual Trust Bank Ltd and Trust Bank Ltd, while the non-banking financial institutions are Delta-BRAC Housing Finance, National Housing and Finance Ltd, IDLC, United Leasing, IIDFC, Lanka Bangla Finance and Fidelity Assets.

According to sources, more banks and non-banking financial institutions are on the pipeline to sign such agreements with the BB.

An amount of Tk 300 crore has been allocated for the housing refinancing scheme, of which, Tk 100 crore kept aside for disbursement during the current fiscal year. The rest amount will be disbursed in the next two financial years.

Following a growing demand for housing by the lower-middle and middle-income people in the urban areas, the BB has undertaken the scheme so that the people can avail of the loan facilities to build their own accommodation.

The scheme is also aims to enhance the contributions of housing sector to the national economy.

While talking to the journalists on the progress in the central bank’s house loan scheme, BB Executive Director Abul Quasem yesterday hoped that with the disbursement of the loan, the existing stagnation in the housing sector would be removed.

It will not only create employment opportunity, but also gear up the presently struggling construction industry, he said.

Replying to queries, he said monthly instalment against a 20-year loan of Tk 15 lakh may be Tk 14,000.

When asked if there is any field level problem identified so far with regard to the housing loan, the central bank official said, “If necessary, we will review the scheme.”