The Pakistani housing finance situation has much common with that of many other emerging markets around the world. Despite a large and persistent housing deficit (6 million households), a number of factors such as low income levels, legal property issues, and large informal economy result in scarce demand for mortgage loans. Financial institution’s growth in mortgage lending- and the subsequent improvement in terms and conditions which might increase further demand in turn has been hampered by a lack of long term funding, inadequate incentives to lend to lower income households, with most banks performing to concentrate their activity on high income groups and the corporate sector (average loan size is Rs. 2.6 million).