Housing not only provides physical shelter but also has a significant impact on the lives of the dwellers in terms of skills enhancement, income generation, increased security, health, self-confidence, and human dignity. Housing finance development, therefore, plays a role in boosting equitable economic growth and reducing poverty through helping households build assets, improving living conditions, empowering the middle- and lower-income population, and strengthening communities. Despite its considerable economic and social potential, housing finance remains underdeveloped in Bangladesh. The House Building Finance Corporation (HBFC), which has traditionally dominated the housing finance sector, is now a declining player, in part because of decreasing government support and in part because of its history of operational ineffectiveness. In its place, domestic and international commercial banks and a few new specialized institutions have entered the market, and have a significant potential for growth.

It is desirable to promote growth in home financing to a wider population group at a lower cost. The government of Bangladesh recognizes the importance of the housing sector and its potential to contribute to long-term economic development. Accordingly, it has taken steps to address present weaknesses and encourage the development of a more stable and vibrant housing sector. The present study builds on these efforts and attempts to formulate recommendations for improving access to housing credit for various groups of presently underserved urban and rural households.