MANAGEMENT OF HOME LOAN PROGRAMS IN THE DHAKA CITY AND ITS EFFECTIVENESS- CUSTOMERS’ PERCEPTION

Abstract

Along with the changes in the economy, there were changes in the country's demographic features. Backwardness in housing has almost always been the leading cause of social dissatisfaction and civil disturbances. The financial institution wanted to offer home loans, and loan seekers needed loans. But matching the demand and supply has not been possible in many cases due to problems inherent in the system. The increasing urban population trend positively impacts the rising demand for housing in urban areas, particularly in large cities. There has always been an absolute deviation between housing demand and current housing stock, which might negatively affect per capita floor space. A review of five-year plans indicates that policymakers were aware of the problems, but an appropriate mechanism to monitor the achievements and failures could not be developed during the last five decades. The main factors influencing the demand of housing accommodation included family size, employment status, household income, house rent, the price of apartments, availability of credit, terms of credit, consumer preferences and ease of purchasing apartments. There was an inverse relationship between demand of apartment accommodation and the price of apartments. The main objective of the study was to assess the management and effectiveness of home loan programs in the Dhaka city. The sources of data used in the study included both secondary and primary data. The secondary sources of data included published materials in the area of housing finance. Primary data were collected through a sample survey. The sources of primary data included Banking and Non-banking Financial Institutions and actual customers of home loans. The study was limited to the Dhaka city area. The top management evaluates the performance on the basis of target fulfillment. Besides. some quantitative measures used in evaluating the achievement status includes home loan sanctioned, cumulative loan sanctioned, loan disbursed, recoverable loan, loan recovery, default loan, unclassified loan, classified loan, the responsiveness of the institution to the total demand of house

loans, and the status of overdue of home loan. Most of the indicators were found favorable in the

private sector financial

institutions, but the growth rate of the home loan overdue has however, been higher in the private sector than that of the public sector. This situation leads one to suggest that private sector requires to be more careful about the loan management process. In enhancing the supply of housing apartments Government intervention might help ease the situation., Government may take measures to provide serviced land at reasonable prices, helping create and promote housing financing institutions, increasing affordability for the disadvantaged groups through providing credit, improving the existing housing stock alongside new housing; and as well as ensuring the conservation of the natural environment. In order to overcome the problems of malpractices adopted by brokers, measures may taken to develop a code of conduct as well as professionalism. In this regard, a law may enacted to set up a regulatory body for implementing licensing system. This would facilitate regulating the activities of brokers combined with monitoring and control.