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Housing Microfinance

Housing Microfinance. CHF – Gaza/West Bank. Alaa Sisalem CHF Gaza/West Bank October 28, 2004. Serves: 3,086 clients Value of Loans Disbursed: $28,876,000 Portfolio at Risk (over 30 days): 3% Outstanding Portfolio: $8,300,000 Offers: Home Improvement Loans

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Housing Microfinance

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  1. Housing Microfinance CHF – Gaza/West Bank Alaa Sisalem CHF Gaza/West Bank October 28, 2004

  2. Serves: 3,086 clients Value of Loans Disbursed: $28,876,000 Portfolio at Risk (over 30 days): 3% Outstanding Portfolio: $8,300,000 Offers: Home Improvement Loans Length of Operation: 9 years Organization Overview

  3. Home Improvement Loan (HIL) • Term: 36 – 42 months • Interest Rates: 6.5 % flat & 1% Commission • Payment Frequency: Monthly • Collateral/Guarantee: Transferred salary • Eligibility Requirements: Any individual or family that proves to have a total monthly income between $200-1200 is eligible to apply for CHF loans

  4. Key Product Features Technical Assistance • Civil engineers provide advisory services in construction • Ensure that the home improvements meet adequate standards of living and safety • Ensure that the loan amount is used for home improvement purposes Partnership with Banks • Capital & risk sharing • Disbursal and collection handled by bank partners • Delinquency management handled by both CHF and bank partners

  5. Client Profile Average family size is 5 persons. Approximately 13% of clients are female. Approximately 48% of the beneficiaries are female. (The number of beneficiaries is calculated by multiplying the number of loans by the average family size.)

  6. Client Satisfaction Achieved through: • Technical assistance • Accessibility of low-income families and private sector employees to formal lending mechanisms Client satisfaction is proven by: • The low portfolio at risk of 3% • The highrepayment rate of 98%, which the program has maintained throughout its 9 years of operation • The fact thatalmost 10% of borrowers take 2nd loans

  7. Financial Viability • The CHF interest rate allows the program to be operationally sustainable. • The interest rate excludes the cost of funds since this is not a typical microcredit program. • Program growth can be accommodated through an increase in the banks’ capital contribution ratios.

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