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MONGOLIAN MORTGAGE CORPORATION. Regional Symposium on Pro-Poor Housing Finance in Asia and Pacific ,. MORTGAGE MARKET DEVELOPMENT IN MONGOLIA ISSUES AND CHALLENGES. Ts.Enkhbayar CEO Enkhbayar@mik.mn New Delhi, India 2010 .04. 1 9. Content .
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MONGOLIAN MORTGAGE CORPORATION Regional Symposium on Pro-Poor Housing Finance in Asia and Pacific, MORTGAGE MARKET DEVELOPMENT IN MONGOLIA ISSUES AND CHALLENGES Ts.Enkhbayar CEO Enkhbayar@mik.mn New Delhi, India 2010.04.19
Content • Housing finance system development process • Mortgage market overview • Status of conditions on mortgage market development • MIK performance , issues and challenges
Housing Areas: 70%- population 59%- UB 80-90% provincial towns Serviced apartment area Ger area Planning –proper , Water supply – central system Sewage – central system Heating – central system Electricity – central system Social infrastructure –sufficient Apartment ownership –yes Housing finance – mortgage loans, savings Planning – not proper Water supply – kiosks (potable) Sewage – pit latrine Heating – stove using coal and wood Electricity – yes Social infrastructure – not sufficient Land ownership –yes Housing finance – savings, assistance from relatives and friends, loans
Mortgage market overview 2009.12.31
Shareholders Main Goal Promotion and development of primary and secondary mortgage markets by raising medium to long term funds on domestic and foreign capital market through a series of capital market tools to create and ensure s smooth functioning of long-term financing system to promote affordable home ownership and urban development for Mongolia’s people. Established 06.09.2006
Mortgage market activity Borrower Mortgage Bonds Lender Commercial Bank loans Secondary Mortgage Market Institution INVESTOR (International, Domestic ) Loan Funding Funding ₮ 2 major role i) market development driver I i) Pioneering SMM
MONGOLIAN MORTGAGE CORPORATION Shareholders Board Members Legal & Audit Committee Financial Committee Operational Committee Risk Committee CEO Finance and Investment Division (Senior finance officer, Accountant, Assistant Accountant) Risk Management Division (Risk management officer) Internal operation Division (IT, Layer, Cooperation officer, Administration & HR officer) Asset management and Securitization Division (Asset management officer, Securitization officer)
Reason why we established MIK • Increase the affordability of the housing loan • Stable structure for long term financing • Increase in housing mortgage market • Need for capital market development • Liquidity facility
МIK OPERATION 16% - PWR 84% - PWOR Dec 2009 swapped MIK bond with mortgage pool
Issues to be done for developing efficient mortgage market development
learning • Play dual role • Driven force of setting up Mortgage market development as well as capital market • (laws, regulations, policy framework, financial infrastructure, capacity building, workshops, RTD, lobbying, etc) • Acting as secondary mortgage institution • Purchasing pools from banks, warehousing m issuing bonds and selling investors etc • Institutional strengthening and capacity building
ISSUES AND CHALLENGES • Implementation of laws and regulations recently approved • Economic stability • Different Understanding of mortgage issues • Standardized and documented origination and servicing • Low affordability rate • Local rating agency • Inappropriate Professional appraisal • Title and Lien registration, enforcement • Balance sheet treatment with recourse based loan pools and bonds • Bankruptcy remote vehicles • Tax and accounting guidelines • IT infrastructure AM • Credit scoring • Mortgage insurance • Mortgage guarantee program
What is next? • Improve accessibility housing loans to LIHs • Housing micro finance study, • Guarantee program with international orgs. • ABS , SS laws and related regulations, by laws • Issue bonds to domestic and international market • Expanding cooperation • Network meeting in Mongolia APHFU • Intensive development of mining industry –coal mining, copper mining, gold etc and
THANK YOU Mongolian Mortgage Corporation LLC /MIK/ MIK Building , United Nations street-38 Chingeltei district-4, 15160 Ulaabaatar, Mongolia www.mik.mn, info@mik.mn Tel: (976) 11-328267 Fax (976) 11-313338