Financial cooperatives based on waqf for affordable housing in Karachi

Abstract

The issue of affordable housing in Karachi has been a concern as two third of Karachi population is considered poor. These low incomes earning people of Karachi have been striving hard for shelter for a long time but unable to do so because of their low disposable income. They have been caught in a dilemma between spending on high rentals or on other necessities such as education, nutrition etc. since many decades. As a result, they are forced to live in illegal settlements or slums where they are compelled to compromise on their social/ethical values and better upbringing of their children. It is estimated that around eighty thousand homes are required each year in Karachi and because of constantly increasing fiscal and budgetary deficits, Pakistan government is unable to cater to this demand. The purpose of this study is to offer a solution to fill up this wide gap between demand and supply situation of housing units in Karachi through creating a synergy between housing cooperative and waqf. Moreover, this paper attempts to identify two innovative waqf based financing tools to overcome the problem of lack of initial funding for the development of housing cooperatives.