The World Bank has warned that redirecting funds from a multi billion rupee resilient housing programme for flood affected communities toward infrastructure projects could deepen poverty and increase long term vulnerabilities in Balochistan. The warning came as the bank raised concerns over the decision to limit housing assistance under the programme and highlighted the potential social, financial and reputational consequences of excluding households that had already been verified as eligible for support. The World Bank communicated its concerns to the federal and Balochistan governments following discussions with senior government officials over the future of the housing component.
The World Bank said the consequences for affected households extend beyond the immediate loss of housing assistance because existing economic and social vulnerabilities could reinforce one another over time. According to the bank, 84% of eligible beneficiaries are classified as ultra poor and vulnerable. Within this group, 28% of households earn less than $30 per month, while another 26% earn between $31 and $70 monthly. The beneficiary profile also includes groups with limited financial capacity to withstand economic or climate related shocks. Around 39% of the eligible households are tenants, 37% are daily wage labourers and 8% are small farmers. These groups generally have limited savings, restricted access to formal credit, few productive assets and limited capacity to recover from major disruptions.
The concerns emerged after housing assistance was capped at 62,966 first tranche beneficiaries as of June 22, 2026, while subsidy support was limited to 97,000 households. The World Bank said the decision had resulted in 119,049 verified and eligible households being left without identified financing support. World Bank Country Director Boloromaa Amgaabazar expressed concern about the funding decision as well as the handling of matters relating to fraud and corruption. In communications addressed to federal officials responsible for economic affairs and planning, along with the secretary of Balochistan, she highlighted the consequences of capping and redirecting housing assistance before a jointly agreed communication strategy had been finalised.
According to the World Bank, the public disclosure of the decision before an agreed communication strategy was in place created additional risks because households that had already completed the verification process and signed project undertakings could continue to expect financial assistance for housing reconstruction. The bank stressed that these households needed clear information regarding their status and the decision affecting their eligibility for funding. The issue has become particularly significant because thousands of households had already gone through the required verification process before the housing component was restricted.
The World Bank also raised concerns regarding the grievance process associated with excluded beneficiaries. As of the agreed cut off date, 66,120 exclusion related grievances had been registered through the project’s grievance management system. The bank said every complainant should be contacted individually and formally informed about the decision. It also called for written acknowledgment or other verifiable evidence confirming that the communication had been delivered and received. According to the World Bank, transparent and credible grievance resolution would be necessary to reduce legal, operational and reputational risks as the housing component eventually moves toward closure.
The bank warned that excluding verified eligible households from housing assistance could create a compounding cycle of vulnerability for families already facing difficult economic conditions. Without adequate resources to rebuild resilient homes, households may be forced to redirect limited income away from essential requirements such as food, healthcare and education. Some families could also rely on additional borrowing or sell productive assets to finance temporary shelter repairs, potentially weakening their ability to generate income and recover economically over the longer term.
The absence of resilient housing could also leave affected households more exposed to future natural disasters. Families that are unable to rebuild damaged homes may continue living in unsafe or structurally vulnerable buildings, increasing their exposure to recurring floods, storms, earthquakes and heatwaves. The World Bank warned that this could undermine the longer term recovery objectives of the programme and increase disaster related risks for communities that have already experienced the effects of severe flooding.
The funding decision could also have wider implications for public confidence in government programmes. The World Bank said excluding verified beneficiaries could contribute to grievances, perceptions of unequal treatment and further erosion of trust in government institutions and development initiatives. Similar risks, according to the bank, have been observed in other housing reconstruction operations where beneficiary exclusions created disputes and weakened confidence in programme implementation.
The World Bank’s warning places renewed attention on the financial and social implications of the decision to redirect resources away from housing assistance in Balochistan. While infrastructure development remains an important component of post disaster recovery, the bank’s assessment indicates that removing financing support from verified households could have consequences extending beyond housing itself. For families with limited income, savings and access to credit, the ability to rebuild safe and resilient homes remains closely linked to their capacity to withstand future shocks and restore their livelihoods.
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