1 / 11

Lessons Learned Scaling Up Housing Microfinance

Lessons Learned Scaling Up Housing Microfinance. Richard Shumann Technical Officer, Housing Finance CHF International SEEP Annual Meeting 2006. Housing Microfinance and CHF -2000. 64% of CHF’s microfinance portfolio Loans as means to the goal of better housing

kibo-hicks
Download Presentation

Lessons Learned Scaling Up Housing Microfinance

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Lessons LearnedScaling Up Housing Microfinance Richard Shumann Technical Officer, Housing Finance CHF International SEEP Annual Meeting 2006

  2. Housing Microfinance and CHF -2000 • 64% of CHF’s microfinance portfolio • Loans as means to the goal of better housing • Intensive technical assistance to ensure quality • Architect visits, loans in kind, disbursements in kind • Microfinance as projects within CHF Offices • Donor driven

  3. Housing Microfinance and CHF - 2006 • 30% of CHF’s microfinance portfolio • Housing as a way to expand microfinance outreach and meet market demand • Jordan: 1,110 loans, $980,000 in one year of new product • Wide range of technical assistance models • Projects becoming local institutions with separate identity and financials • Client driven

  4. CHF Loan Portfolio 2000 - 2006

  5. Why these changes? • More attention to markets, client needs and competition • Stronger push for sustainable institutions within MF community • New competition gives clients more convenient options • Consumer finance companies and building suppliers • Clients do not necessarily need architects • Need to cover costs, especially for technical assistance

  6. Housing-Only Lending Institutions • Palestine started 1995 • Mid-2006: 3,749 loans, $11.5 million portfolio • Limited scale in microfinance but successful housing projects • Constraints to profitability: • Covering costs of architectural assistance • Improving efficiency of loan process • End of subsidized loan capital • Pricing policy not flexible due to competition and interpretation of social mission • What’s more important: Housing or Lending? • Mexican institutions moving into microenterprise loans

  7. Challenges to Scale MARKETS Research Respond COSTS Expenses Income STAFF Profile Training

  8. Markets • Housing an untapped opportunity • Seek new segments, low level civil servants • FONDEP Morocco: 95% housing clients new to MFI in first year • Adapt procedures and policies to new competition and client needs

  9. Costs • Housing loans tend to have higher amounts and lower delinquency than business loans but • Are more expensive to provide (extra loan officer time, assistance) • And often at lower interest rates • More study needed

  10. Staff • Where do you put the architects, if you have them? • Train existing credit staff to reach new markets and be efficient • FUNHAVI Mexico: third of new clients from small satellite offices

More Related