Bangladesh is struggling with some stark realities in housing sector. Currently, 7 out of 10 households in Bangladesh dwell in conditions that are not permanent. In Dhaka alone, there are over 4,000 informal settlements, or slums, home to 3.5 million people, who consist of a majority of the workforce. Housing loan makes up only 9.1% of the total loan, which implies a big chunk of the population is totally off the radar of existing housing finance sector. Affordable housing comes to rescue in a bid to revive the fortunes of the flagging housing sector.
The idea of affordable housing is embedded in providing housing for the low and middle income (monthly income within the upper ceiling of BDT 60,000 or USD 750 as per IFC) households, a currently untapped segment in our housing finance sector. Most of the apartments constructed size more than 1000 sq.ft., for which, private developers eye to the upper-middle and upper classes for reputedly having high credit worthiness. However, the ever-burgeoning middle and affluent class, rising income of this segment, more nuclearization of urban families are prone to make affordable housing a compelling story for Bangladesh, the way it happened in India. Housing for low and middle income households grew triple in just 3 years in India, accounting for 21% of the total housing finance sector and anticipated to grow 30%-40% by 2025. For Bangladesh, it is a first-hand concept which is yet to be explored and has the power to be game-changer for housing sector.
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