18th MFC Annual Conference, Prague, 5 November 2015

FINANCING PEOPLE’S DREAMS FOR BETTER HOUSING

SESSION OUTLINE

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Demand for HMF

Investment

ITA

Impact &

challenges

Innovation

*

DEMAND FOR HOUSING MF

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Estimated % of microenterprise loans that go to housing 2.4B in CEE & CA

Affordable urban housing market US$214 - $786 B in the period 2010-2020 (world)

MFI partners invested 3 times x HFHI loan in housing

Limited access to mortgage

REASONS AND OPPORTUNITIES FOR ADDING HOUSING MICROFINANCE

Retain Loyal clients

Grow in response to clients’ demand for housing

Portfolio diversification

High diversion of other products toward housing

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MICROBUILD INVESTMENT

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13 MFI partnerships in CEE & CA

18M USD MBF investment 70M USD partners’ housing portfolio

Over 200M USD disbursed

Over 143,000 housing loans disbursed

MICROBUILD FUND CONDITIONS

Existing housing microfinance portfolio (committed microfinance

institutions without a portfolio can become partners for technical

assistance).

Loan size: US$500,000 to US$5 million

Tenor: Three years or longer.

Investment process accompanied by customized technical

assistance

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Housing Market assessment

Market research

Product development

Non financial services development

Staff capacity building

Product testing

Evaluation

Product positioning

Impact study

TECHNICAL ASSISTANCE

UNDERSTANDING CLIENT’S NEEDS AND BEHAVIOURS

Lack of ownership documents for new buildings after 1990s

In rural areas 50% self-build, 20% use relatives, 30% use contractors

About 90% respondents easily find construction materials. In some

regions people prefer to go to a neighboring district to get materials at

lower price.

Most customers construct and renovate incrementally.

Most customers build 3-4 room houses. Recently rural people started

to construct kitchen and bathrooms inside the house. -8-

INSTITUTIONAL TECHNICAL ASSISTANCE

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Term: 2011 – 2017; Amount: EUR 480,000 (DIGH) and USD 1.5M (MBF)

TA provided by HFH Armenia

Market research for HMF and renewable energy loans, and for TA among the target

group

Housing loan product development and implementation

Staff trainings in: Energy Efficiency, Renewable Energy and Construction TA

Development of construction/renovation related educational and promotional

materials

Construction TA to self-building households

M&E of the partnership project; Impact study planned

I M P A C T

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Capital Technical Assistance/ Knowledge

Housing Impact

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THEORY OF CHANGE – HOUSING MICROFINANCE

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KAMURJ CLIENTS’ FEEDBACK

Client satisfaction with loan products

Client satisfaction with service quality

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HFHI ITA IMPACT ON MFI

Opportunity to test and scale up housing microfinance

Develop and offer new housing products/services

Attract funding and implement new housing programs:June/2014 Pilot Project: solar water heaters project USD 200K (joint fund with HFH

Armenia);

July/2014 Youth Housing program, $ 2M;

Dec/2014 Scaling up the housing microfinance program, Triple Jump (MicroBuild

Fund) - $1.5 M;

Jan/2015 National Mortgage Company, mortgage loans, $2 M.

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INNOVATION AND OPPORTUNITIES FOR HMF

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New Products: Energy efficiency, Microinsurance, Microsavings, Micromortgage

Renewable energy sourcesNew target groupNew sources of capital/investors

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HABITAT FOR HUMANITY VISION:

A WORLD WHERE EVERYONE HAS A DECENT PLACE TO LIVE For more information: www.habitat.org/cisf