Research – Housing Finance Sector
1. Urban & Rural Housing Growth – up to 2050
Bangladesh is one of the world's poorest countries (average gross national product $220 per head in
1991) with problems of rural poverty on such a scale that successive governments and their
international advisors have struggled to find appropriate solutions. So many experiments have been
tried in the 22 years since independence that Bangladesh has been called ‘the test case for
development’. One immediate challenge for the planners is managing the rapid urban growth which
has been accelerated by waves of poor rural migrants. This article examines the Bangladesh
government's policy of decentralized urbanization. This policy has sought to give the rural poor
good reasons to stay in their home areas rather than swell the numbers living in the shanty towns of
the large cities such as Dhaka, Chittagong, Khulna and Rajshahi.
2. Urbanization in Bangladesh
Bangladesh, a densely populated country has been experiencing rapid urbanization in recent decades. The
urban population, currently at more than 20 million, is growing at a much faster rate than the population as a
whole and by larger annual increments than ever before. The process of urbanization is dictated largely by
growth in population and as such the study of urbanization has assumed greater attention than before. This
paper attempts to utilize the limited data available to provide some insights into the levels and trends of
urbanization in Bangladesh. It also makes an attempt to elucidate the implications of urbanization. The 1991
census estimates 19.6 per cent of the total population as urban. This figure was only 15.2 per cent in 1981
and below 9 per cent in 1974. The proportion of the urban population in all the neighboring developing
countries, except Nepal, is relatively much larger (27 per cent in India, 22 per cent in Sri Lanka, 34 per cent
in Pakistan and 26 per cent in Myanmar in 1991). Compared to other developing countries with a large
population, Bangladesh remains behind in terms of the level of urbanization.
3. Urban Housing Requirement
4. Housing Finance Institutions in Bangladesh
To provide the housing finance assistance, House Building Finance Corporation was established in 1952
which was reconstituted as Bangladesh House Building Finance Corporation (BHBFC) after independence.
BHBFC is a traditional specialized housing Finance company, it still dominate the housing market as a 3rd
largest player. It provides housing loans facilities to the dwellers of urban areas, mostly for construction,
repair and remodeling of houses. BHBFC offers 15–20 year mortgages to individual households at
commercial interest rates that increase as the loan amount increases. The institution is getting back due to
poor governance, operational inefficiency, huge non-performing loans, loans approval times were
exceptionally long- sometimes as much as a year from application to approval and reduced government
subsidies. In spite of these limitations, still BHBFC is the only institution serving the middle and low-
income people for their housing needs in a wider geographic area beyond Dhaka (Green and Watcher, 2007;
World Bank, 2010). Lately it has taken initiatives to bring its services to the people of rural areas. So far, it
has financed 125,000 units since its inception, of which more than 30,000 since 1992, mostly for higher
income households (Hoek-Smit, 1998). BHBFC basically provides five types of loans- i) general loans, ii)
group loans, iii) apartment loans, iv) adjustment loans for the completion of an under-construction house and
v) loans for constructing houses in the district and selected upazila. BHBFC was the market leader with a
share of 52 percent, but now it has lost its market leader position
5. The risk of climate change in Urbanization Bangladesh
Two recent reports confirm that Bangladesh is at high levels of risk and vulnerability to severe
climate events. The German watch Long-Term Climate Risk Index (CRI) 2011 has identified
Bangladesh as the country most affected by extreme climate events during 1990- 2009. Similarly, a
WWF (2009) report finds that, amongst 11 Asian coastal mega-cities, Dhaka is the most vulnerable
to climate change impacts. The report ranks Dhaka as having the lowest adaptive capacity, second
highest exposure and second highest sensitivity. In effect, these reports offer a glimpse of what
Bangladesh will face if global climate change follows current trends. Many of the projected
impacts of climate change will reinforce the high baseline environmental, socio-economic and
demographic stresses. Over the past decade, the national government has shown an increasing level
of awareness to the importance of climate change, as well as to the country’s historical sensitivity
to climate variability in general, and there are several policy responses that relate to climate change.
However, a review of policy, research and action with reference to climate change adaptation and
poverty in the country reveals a general neglect of urban poverty and a bias towards rural and
agricultural issues. This reflects a lack of awareness amongst policy makers of the growing levels
of urban poverty in the country – particularly to the fact that the tipping point at which
Bangladesh’s poor population becomes predominantly urban is likely to occur within this
generation. It also reflects a lack of understanding of how even small shocks can damage the
livelihoods of poor urban households and undermine national development prospects.
6. The role of government for developing housing sector
In many high-cost communities, the planning codes state that for any new development, there either
needs to be some number of affordable units, or the developer can pay into a fund that will
buy affordable units. These could be rentals, which are capped on the monthly rent, or properties
that are sold below market-rate with a deed restriction. I'm going to focus on the properties that are
sold as "subsidized." These units have deed restrictions that limit the application per year. For
instance, the property can only be initially sold for a price that a certain median income could
afford, and the property can only appreciate by 2 percent to 5 percent annually.
7. The effect of COVID 19 in global housing development.
8. Steps & Process of land development for housing.
9. The limitations of Housing Policy of Bangladesh
10. Evolution of rural housing in Bangladesh
