Malik Riaz’s bank to offer Islamic Housing Finance

Housing is viewed as the fundamental need of people, and its insufficiency is a significant issue around the world, particularly in less developed nations, including Pakistan. Considering the need and recognition of housing as a fundamental right, globally, the situation of Pakistan paints a dire picture. There is a yawning demand-supply gap of over 10 million houses that grows at the rate of 400,000 annually. The government has taken efforts to formulate strategies on the national level to combat the supply-demand gap. Despite of the efforts, the major issues such as enforcement and implementation of laws and policies, availability of low cost houses and flats and access to finance still lingers and haunts the potential buyers.  

Recently, the conventional banks in Pakistan have begun providing financial landscapes to the housing. Not with standing commercial banks, Islamic banks are likewise giving housing fund. According to the various findings, a huge potential for financing exists in the domestic market. Many of the investors are eager to invest in ultra-modern, high cost, international-style designed projects because of the returns and commercial benefits. Majority of the builders and developers a reluctant to invest low income housing societies since they are mostly politically or philanthropically motivated.

To combat the rising pressure of many people homeless, Escorts Investment Bank Limited which is owned by the renowned business tycoon, Malik Riaz is expected to contribute in this regard. EIBL plans to present Islamic lodging account which will develop Shariah-compliant Islamic products for the purpose of housing and micro-financing segments, which will be offered to the market once the business exercises resume.

Escorts Investment Bank Limited is a non-banking finance company. The Company is engaged in investment finance services. Its segments include financing activities and investment activities. The financing activity segment includes providing long-term and short-term financing facilities to corporate and individual customers include lease financing.

EIBL, presently it is relied upon to help in the parent organization’s business, Bahria Town, by giving home financing to upcoming financial capitalist.
The bank is already offering interest based loans via conventional banking but the terms and conditions for these products are way more product because of the Shari’ah compliance. The move is said to improve the bank’s administration portfolio for the clients looking to buy property for private or venture purposes. The interest charged by the EIBL are KIBOR in addition to 7 percent, which is likewise higher than the interest costs that most different banks charge for housing finance items.

Recently, Bahria Town declared a low-cost housing plan in different urban cities for local and abroad Pakistanis. This plan is probably going to pull in clients towards its housing society and also the bank.

Malik Riaz purchased more than 71 percent portions of Escorts Investment Bank Limited (EIBL) in 2017 alongside its administration control. EIBL is certifiably not a business bank and is viewed as a non-banking money organization in specialized terms. Consequently, it is just directed by the Securities and Exchange Commission of Pakistan (SECP) with no ward of the financial controller.

After the acquisition, Malik Riaz invested a capital of Rs. 1.2 billion in the bank for the benefit of Bahria Town, which improved the over financial strength and stability of the finance house. By March 2020, the bank had figured out how to shorten the misfortunes and reported a loss Rs. 21.48 million when contrasted with Rs. 36.65 million for the relating time frame a year ago.

For more updates and information, check our page LandTrack, partner for all of your housing needs.

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