Bangladesh House Building Finance Corporation (BHBFC) a specialised public sector financial institution set up in 1973 under President's Order No. 7 of 1973, which repealed the House Building Finance Corporation Act XVIII of 1952. Its sole objective is to provide credit facilities for construction, repair and remodeling of dwelling houses and apartments in cities, towns and other urban areas. All inherited assets and liabilities of the erstwhile House Building Finance Corporation were vested in the reconstituted BHBFC. In 1973, the authorised capital of BHBFC was Tk 100 million. This was raised to Tk 1,100 million in 1992. In the beginning, the paid up capital of the organisation was Tk 50 million and was fully subscribed by the government of Pakistan. The paid up capital of HBFC rose to Tk 972.9 million on 30 June 2000 through capitalisation of interest accrued (in 1978) and by new subscription by the government of Bangladesh (in 1992, 1993 and 1994).

BHBFC took over the principal objective of HBFC and to cope with increasing demand, the corporation extended the area of its financing up to some upazila headquarters. The lending policy of BHBFC has undergone changes over the years to cater to the funding needs of various types of housing. For quite a long time, the corporation was engaged in giving loans such as general loans and multi-storied loans. Currently, it provides 5 types of loans: (a) general loans for construction of single or multi-storied residential houses on land/plots owned by a single person or by a husband and wife jointly; (b) group loans for the construction of flats by a group of borrowers on a plot owned jointly; (c) apartment loans for purchasing under-construction apartments in dhaka and chittagong Metropolitan areas; (d) adjustment loans for completion of an under-construction house; and (e) loans for constructing semi-pucca houses in district and selected upazila headquarters. Side by side with expansion of areas of house building financing, the corporation has also increased its loan ceiling. The loan amount sanctioned now varies between Tk 0.27 million and Tk 2.5 million.

The primary source of fund of BHBFC is its paid up capital. The corporation also raised funds by selling government guaranteed interest-bearing debentures to bangladesh bank and public and private sector commercial banks. Further, it receives two kinds of deposits from the government, namely, fixed deposits and refundable deposits, the total amount of which stood at Tk 127.13 million at the end of 1999-2000. On 30 June 2000, the total capital and liabilities of the corporation was Tk 30,270.14 million as against Tk 29,722.36 million in 1998-99, and Tk 2,897.00 million in 1972-73.

Major items in which the corporation applied/utilised its funds in 1999-2000 are loans and advances Tk 26,685.20 million (classified Tk 8,343.07 million and unclassified Tk 18,342.14 million), stocks Tk 0.91 million, advances to offices/branches Tk 205.94 million, and investments in FDR with scheduled banks against debenture redemption Tk 2,312.65 million.

The amount of loans sanctioned by the corporation in 1999-2000 was Tk 1,242 million, against which it disbursed Tk 993.59 million. During the year, the corporation recovered Tk 2,329 million. The outstanding balance of total loans and advances of the corporation on 30 June 2000 was Tk 27,236.97 million, of which classified loans accounted for Tk 8,343.07 million (substandard Tk 2,421.15 million, doubtful Tk 2,850.67 million and bad debts Tk 3,071.24 million).

BHBFC has its head office at Dhaka. It has 21 offices in different parts of the country. Of them, 9 are zonal offices (4 in Dhaka and one each at Chittagong, khulna, rajshahi, sylhet and barisal) and 12 are regional offices located at different district headquarters. In addition, there are 6 BHBFC camp offices, one each at savar, narayanganj, cox's bazar, narsingdi, chuadanga and satkhira.

BHBFC runs its business under the overall guidance and supervision of a 6-member board of directors appointed by the government. The managing director is the chief executive of the corporation. The number of employees in the organisation is 605, and includes 296 executives and officers of different levels.

Until 1978-79, the corporation could not contribute to the national exchequer. But since then it has regularly earned profits and generated revenue for the government at increasing rates. Provision requirement for its classified loans has, however, reduced the profitability of the corporation. The balance of interest suspense account of the BHBFC amounted to Tk 497.68 million on 30 June 2000. This also affects the growth of its profitability. [S M Mahfuzur Rahman]