State-owned Bangladesh House Building Finance Corporation (BHBFC) has sought the release of its remaining Tk3.85 billion in paid-up capital from the government to address an acute capital shortage that has constrained its ability to disburse housing loans despite rising demand.

According to officials, the specialised housing finance institution currently has an authorised capital of Tk10 billion and a paid-up capital of Tk5 billion. Of the paid-up capital, the government has so far provided only Tk1.15 billion.

The shortage of capital has prevented the corporation from disbursing a number of already approved loans, including conventional housing loans and housing loans for government employees.

In the fiscal year 2025-26, the amount of accumulated undisbursed loans reached Tk2 billion under conventional housing schemes and Tk500 million under the government employees’ housing loan programme.

BHBFC currently provides housing finance in Dhaka and Chattogram metropolitan areas, divisional cities, districts, upazilas and rural growth centres, but officials say its lending capacity remains far below the country’s growing housing needs.

Managing Director Md Abdul Mannan recently submitted a proposal to the finance ministry seeking the release of the remaining paid-up capital. In the proposal, he said the additional capital would enable the corporation to expand housing finance for low- and middle-income groups, helping address the country’s basic housing requirements.

The proposal also highlighted an improvement in loan recovery performance, noting that the corporation’s default loan ratio has fallen to 3.45 percent from around 25 percent previously.

BHBFC officials said the corporation currently has no capital adequacy or provisioning deficit.

According to the proposal, about 76 percent of BHBFC’s disbursed loans have been provided outside metropolitan areas, while the remaining 24 percent have been disbursed in the Dhaka and Chattogram metropolitan regions.