Pakistan, like other developing countries, has been facing a shortage of housing units; and this basic human need is felt more profoundly at the bottom of the pyramid comprising the poor and financially under-served segments of the society. According to the 2017 census, Pakistan’s population has reached 208 million, growing at an average of 2.4% annually since 1998. The growing number of households implies an increase in the demand for housing. It is estimated that the annual demand for new homes is approximately 700,000 a year, whereas, only about half of this demand is met. Overall, the housing deficit is estimated at 10 million units and growing.

The formal financial sector has been failing to provide adequate and affordable housing finance to a large segment of the population. The combined volume of outstanding housing finance from banks and the HBFCL stands at around Rs. 83 billion currently, which is equivalent to only 0.5 percent of GDP. This ratio (referred to as mortgage depth) is low in comparison, not only to advanced economies but also to the regional developing economies of India and Bangladesh.