The Steering Committee (SC) for Housing and Construction Finance, chaired by Governor, SBP, and with CEO’s of six banks (HBL, FBL, BAFL, MBL, UBL & BoP), NAPHDA and Senior SBP officers as members, has set up a ‘PBA, Technology Working Group (WG)’ to oversee the design, development and deployment of an automated income estimation and credit assessment methodology for Naya Pakistan Housing initiative.
The PBA, Technology WG, comprises CEOs and teams of three banks (Bank Alfalah, HBL and Faysal Bank), CEO of PBA, with SBP present as an observer and it has been engaged since October, 2020, in creating a roadmap to ensure sustainable market-led financing of housing projects and mortgage financing for the underserved in the country.
To further develop automated and statistical credit assessment models as well as income estimation models using multiple and alternative sources of data, the PBA Technology Working Group has now appointed a Consortium of consultants comprising four entities;
- Creditinfo
- Aequitas Information Services Limited
- Pakistan Credit Rating Agency
- Analytics (Private) Limited
The appointment of this Consortium included a structured RFP process in which multiple local and international consultants participated and the process was overseen by Price Waterhouse Cooper (PWC) who were hired earlier by the Working Group upon approval by the PBA, EC.
Work on this project is scheduled to begin in September, 2022 and it will include development of personal scorecards for existing and potential borrower base not only for housing, but later also for other consumer finance products.
Use of these scorecards, based on data and repayment behaviour/history of borrowers, would help the banks to take more informed credit decisions, potentially reduce credit losses and increase loan volumes.
Once completed, this initiative, through the PBA platform, will be transformational for mortgage/consumer lending space in Pakistan. We will keep communicating to our members as we progress, the basic model of which is expected to be available in the next 6 months for use by the banks.
The entire project, including, Expert Score; Income Estimation Model; Statistical Score; Meta Data App; Psychometric Score and Annual Model Review is expected to be completed in 30 months.
