World Bank reviews feasibility of Mortgage Refinance Company in Bangladesh
BSEC and World Bank officials discussed a proposed Mortgage Refinance Company to expand housing finance and deepen the capital market.
A meeting was held between the Bangladesh Securities and Exchange Commission (BSEC) and representatives of the World Bank Group to discuss the feasibility of establishing a Mortgage Refinance Company (MRC) in Bangladesh.
The meeting was held at the BSEC headquarters yesterday (19 August), according to a press release issued by the commission today.
Keep updated, follow The Business Standard's Google news channel
The meeting discussed the proposed framework and role of a Mortgage Refinance Company in Bangladesh's housing finance sector.
The initiative aims to expand the country's housing finance sector while deepening the capital market.
Presided over by BSEC Chairman Masud Khan, the meeting was attended, among others, by BSEC Commissioners Tanwir Habib Rahman, Nahid Mahtab, Md. Nafeez Al Tarik, and Hossain Sadat. Representatives of the World Bank Group were also present at the meeting.
According to the press release, the meeting focused on detailed discussions about the potential institutional structure of the MRC and its role in developing housing finance.
Participants explored how the proposed entity could deepen the primary mortgage market by providing long-term refinancing facilities to financial institutions, enabling them to offer more accessible and longer-term mortgage loans.
The discussions also highlighted the MRC's potential role in mobilising capital market resources through instruments such as mortgage-backed securities, asset-backed securities and bonds.
The World Bank Group is currently conducting a feasibility study in response to a formal request from the Financial Institutions Division (FID) of the Ministry of Finance.
Based on the findings of the study, the relevant legal and regulatory frameworks will be formulated to facilitate the company's launch and operations.
In 2024, the government took the initiative to establish a Mortgage Refinance Company (MRC) to boost credit flows, unlock long-term investment and promote affordable housing.
Under the proposed structure, the MRC would operate under the direct supervision of Bangladesh Bank and raise capital through corporate bonds and mortgage-backed securities in the stock market.
The company would then use the funds to refinance banks and other lenders, enabling them to extend more mortgage loans to the housing sector.
