Ministry of Housing and Works and Akhuwat Islamic Micro Finance have reached an agreement for provision of interest-free loans for the construction and repair of low-cost houses in the country.

Loans of up to Rs1 million will be provided which will be returned in 24 to 60 months on installments.

The government will provide Rs5 billion to Akhuwat for distribution of small loans across the country.

The agreement was signed by Housing and Works Secretary Dr Imran Zaib Khan and Akhuwat CEO Dr Amjad Saqib.

They said that ‘Nia Pakistan’ (New Pakistan) housing project was an important initiative that would help to a great extent in provision of low- cost houses.

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Akhuwat Islamic Micro Finance has been selected according to Public Procurement Regulatory Authority (PPRA) rules. The body will provide interest-free small loans to the poor only.

In addition to the construction of houses, these loans could also be used for the building additional rooms, kitchens, washrooms and renovation purposes.

There will be no processing fee for the loan application.