In collaboration with the Ministry of Housing & Urban Planning (MOHUP), state-owned Eskan Bank is developing sustainable financial solutions to meet Bahrain’s housing challenges and boost economic activity.
The demand for social housing units recorded by the ministry has risen considerably, leading to pent-up demand waiting to be served. This situation has created pressure on the government to build more housing units and provide a growing rental budget to citizens who have been waiting for more than five years.
Bahrain’s housing challenges also include limited resources and lengthy construction periods. To address these issues, Eskan Bank and MOHUP have devised sustainable solutions aiming to serve the maximum number of citizens in the shortest time frame. This move would benefit all stakeholders including the government, applicants and the private sector.
Sustainable approach
Eskan Bank’s sustainable solutions have expanded the social housing finance solutions available in Bahrain and increased the amount of subsidised mortgage transactions recorded by the lender as well as private sector banks. Eskan Bank now offers several solutions, an increase from the previous four, with the mortgage floor raised from $50,531 to $106,382, and the ceiling raised from $159,574 to $186,170.
These new subsidised mortgage programmes have allowed private sector banks to enjoy wider participation in the country’s social housing portfolio, creating increased demand for real estate and driving economic activity.
Eskan Bank’s solution aims to attract private sector developers and financiers, and enable them to enhance their role in social housing, leverage public funds allocated to social housing, and empower beneficiaries by introducing immediate mortgage solutions that cater to all segments with utmost flexibility.
To implement the scheme, the lender now allows social housing service beneficiaries to obtain subsidised mortgages from partner banks, whereas previously, they were offered solely by Eskan Bank. There are also schemes where the lenders provide the mortgage to the citizens while the government subsidises their instalment payments.
Legal framework
Eskan Bank has worked diligently to develop the legal framework for the subsidy programme and has collaborated with MOHUP and the relevant ministries to obtain the cabinet’s approval.
Together, they have ensured compliance with all regulatory bodies and have budgeted the subsidy requirements with the government for such housing programmes.
Eskan Bank has won the Best Innovation Programme trophy at the Mena Banking Excellence Awards 2023.