A delegation of the World Bank Group (WBG) on Thursday held a meeting with the securities regulator to discuss legal frameworks required to launch the proposed Mortgage Refinance Company (MRC) in Bangladesh.
The meeting was organised as part of an attempt to conduct a feasibility study on the MRC that is expected to facilitate long-term housing finance in the country.
Officials of the Bangladesh Securities and Exchange Commission (BSEC) said the proposed company would have to be formed by formulating a law, and that the government was likely to consider the feasibility study of the WBG.
The company that would refinance would need capital.
“That’s why a possible refinancing strategy was discussed at the meeting,” said a BSEC official requesting anonymity.
Apart from mobilising funds from the capital market, the company will be able to help expand the primary mortgage market through long-term refinancing to the financial institutions.
For raising capital, the company may issue bonds or securitise its assets against future cash flows.
“We already have legal frameworks for securitisation and bonds. So, the BSEC can facilitate the financing of the proposed MRC,” said the BSEC official.
He also said a market of instruments such as bonds and asset-backed securities would have to be developed.
Meanwhile, a BSEC press release said the feasibility study was initiated by the WBG following a formal request from the Financial Institutions Division (FID) of the Ministry of Finance.
BSEC Chairman Masud Khan presided over the meeting attended by WBG representatives, BSEC commissioners, including Tanjir Habib Rahman, Nahid Mahfuz, Md Nazif Al Tariq, Hossain Sadat.
