Charter of the Economy Maximum Financing Range PKR 2.7 million PKR 6 million PKR 10 million Financing Tenor Minimum 5 years and maximum 20 years financing tenor, depending upon choice of customers. Approximate monthly payments* Financing Amount Rs. 1 million Rs. 2 million Rs. 4 million Rs. 6 million Rs. 8 million Rs. 10 million Total Monthly Payment Rs. 6,600/­Rs. 13,200/­Rs. 25,398/­Rs. 39,597/­Rs. 62,024/­Rs. 77,530/­(Monthly payments mentioned above are of first five years, based on 20 years financing period)| (Monthly payment includes unit price and rent) Therefore, the recommended strategy for reducing the housing shortage in the country by provision of low-cost housing should be as follows: i) The emphasis must shift from construction of new housing units to improvement of existing housing units. ii) Microfinance Institutions may start a credit line of housing finance with a ceiling on the size of the loan of Rs 200,000 to an individual borrower. iii) Commercial banks should act as largely wholesalers of credit for housing finance to microfinance institutions. iv) The SBP has introduced a requirement that commercial banks must extend at least 5 percent of their private sector credit in the form of housing loans. A penalty may be imposed if this target is not met. However, as an incentive and for hedging against greater risk, a 2½ percent tax credit may be extended to commercial banks on the amount of additional housing loans during a particular year. v) A foreclosure law has been put in place. Special courts may be established for settle­ment of cases within six months. 22.5. Promoting Construction Activity In the aftermath of COVID-19, the PTI implemented a strong package of reforms and incentives to activate the housing sector. The logic was its potential for labor absorption, especially of workers in the informal sector who had lost jobs in the shutdown after the pandemic. Further, it was anticipated that jobs would be generated not only directly but also indirectly because of the big backward linkages of construction activities. Construction of 1 million housing units annually is part of the election manifesto of the PTI Government. 218