WB studies feasibility of mortgage refinance company

The World Bank is conducting a feasibility study on establishing a Mortgage Refinance Company (MRC) in Bangladesh, which could help deepen the country’s primary mortgage market and mobilise long-term capital market funding for housing finance.

A meeting between the Bangladesh Securities and Exchange Commission (BSEC) and a World Bank delegation was held at the BSEC office on August 19 to discuss the feasibility of establishing the proposed institution.

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The meeting was chaired by BSEC Chairman Masud Khan, according to a BSEC press release issued yesterday.

The proposed MRC could provide long-term refinancing to financial institutions, enabling them to expand their mortgage lending operations and potentially making housing finance more accessible, according to the statement.

The participants discussed the potential structure of the MRC and its possible role in developing housing finance and the capital market in Bangladesh.

They also exchanged views on how such an institution could deepen the primary mortgage market by providing long-term refinancing to financial institutions and help mobilise capital market funding for housing finance.

The World Bank Group is undertaking the feasibility study in response to a formal request from the Financial Institutions Division of the Ministry of Finance.

The meeting was attended by BSEC commissioners Tanwir Habib Rahman, Nahid Mahtab, Md. Nafeez Al Tarik and Hossain Sadat, along with Executive Director and Spokesperson Md Abul Kalam, and officials from relevant departments. Representatives of the World Bank Group also attended the meeting.

Kalam told The Daily Star that the government has a plan to launch such a company that will finance affordable housing, which is not available in the country at present.

“So, the WB is talking with many stakeholders. As the BSEC will have to approve securities for such a company, they talked with the regulatory body.”

“There is an option to provide funds to such a company through asset-backed securities, mortgage-backed securities, bonds, etc.”

“If the company looks viable, the government will formulate relevant laws, and the BSEC will allow it to undertake financing,” he added.