LAHORE: The Pakistan Banks’ Association (PBA) has entered into a strategic partnership with a consortium of leading financial services and technology businesses to improve access to finance for low-income segments of the population currently excluded from traditional housing finance.
The consortium brings together an industry-leading credit risk analytics knowledge, alongside extensive experience in Pakistan and emerging markets globally to develop a market-level application scorecard and income estimation model to boost financial inclusion in Pakistan.
The scorecard project will support the Naya Pakistan Housing Programme (NPHP), a government-backed initiative providing low-cost, affordable housing to deserving individuals in Pakistan that is expected to be a catalyst to accelerated economic activity and increased job opportunities in the region following the negative impact of Covid-19.
The consortium, comprising Creditinfo Group, a global credit information and fintech service provider, Tasdeeq, Pakistan’s first SBP licensed credit bureau, Pakistan Credit Rating Agency (PACRA) and Analytics, a leading artificial intelligence and big data analytics solutions provider, will work together to develop solutions for PBA to streamline risk assessments and enable a wider pool of applicants to access financing for their housing needs.
This project is being managed by the PBA Technology Working Group, comprising CEOs and members of Bank Alfalah, HBL and Faysal Bank as well as the CEO of PBA and a senior official of State Bank of Pakistan. This is a unique project, and the first of its kind in Pakistan, where a scorecard will be developed using an alternative source of data.
We are very excited with the transformational impact this project can have on our members’ consumer lending and credit initiation and risk management capabilities, said Tawfiq Husain, CEO, PBA. “Starting with Low Cost Housing Financing, we hope to be able to put this model to use for other products in consumer lending,” he added.
Pakistan’s housing finance market has not been able to reach a significant percentage of its GDP due to various reasons, as per International Finance Center (IFC), country’s mortgage to GDP ratio is just 0.3%, the lowest in the region where average of South Asian counties stands at 3.4%. the country currently faces a deficit of more than ten million units which is expected to increase by 0.4 million units per year.
The regional director of Creditinfo, Samuel White said that our global experience will be complemented by the consortium partners’ local market knowledge to develop a robust credit risk and affordability solution in Pakistan.
“The project will provide PBA members with the required tools to make accurate risk decisions on underserved segments of the population, which is fundamental to increasing access to housing finance.” White added.
“This consortium will bring a diverse array of expertise to the project”, said Omar Khalid, COO TASDEEQ. This synergy coupled with Creditinfo’s comprehensive global experience will be vital in development of low-cost housing credit scoring and income estimation models for the existing as well as new-to-bank customers utilizing alternative data sources. We will work with PBA to provide banks with tools for quick and accurate risk decision making and working towards a more financially inclusive Pakistan, Khalid added.
