Low-income Housing Low-income Housing FinanceFinance

CODI ExperienceCODI Experience

CODICODI in briefin brief

Founded in 2000Founded in 2000 A public organization: having a A public organization: having a

government institution status with government institution status with flexibility in organization flexibility in organization managementmanagement

Main objective:Main objective: strengthening poor strengthening poor community organizations community organizations

Current ActivitiesCurrent Activities

Citywide slum upgrading (Citywide slum upgrading ( “ “Baan MankongBaan Mankong””)) Poverty Alleviation (Poverty Alleviation (Supporting communities Supporting communities

in savings, credits and loans and community in savings, credits and loans and community development plan, etc.)development plan, etc.)

Community WelfareCommunity Welfare Assisting in setting up of Community Assisting in setting up of Community

Organization Councils throughout the countryOrganization Councils throughout the country Promoting natural resource management and Promoting natural resource management and

sustainable agriculturesustainable agriculture Solving land and housing disputes in rural Solving land and housing disputes in rural

areasareas

CODI strategiesCODI strategies

To play supporting role in community To play supporting role in community development processdevelopment process

People, not CODI, are the owners and People, not CODI, are the owners and key actorskey actors of the processof the process

To coordinate with govt. agencies, To coordinate with govt. agencies, NGOs, other civic groupsNGOs, other civic groups

To promote community-based savingsTo promote community-based savings To use finance as a tool for To use finance as a tool for

developmentdevelopment

CommunityDevelopmentCommittee

Academics

SupportedAgencies

NGOsLocal

Authorities

Others

CODI

Network Network

Network

WELFARE

LAND - HOUSING

SAVINGS - CREDIT

COMMUNITYENTERPRISE

ENVIRONMENT

OTHERS

CODI provides financial support by lending CODI provides financial support by lending its capital funds to community its capital funds to community organizations. organizations.

At present, CODI credit facilities comprise At present, CODI credit facilities comprise four types of loans as follows;four types of loans as follows;

-- Loans for housing and developmentLoans for housing and development

-- Loans for community Loans for community enterprises/income generationenterprises/income generation

-- Loans for holistic developmentLoans for holistic development

-- Short-term revolving funds Short-term revolving funds

Income Generation ActivitiesIncome Generation Activities

Baan Mankong Housing Baan Mankong Housing ProgramProgram

Citywide slum upgradingCitywide slum upgrading a breakthrough in solving slums on a a breakthrough in solving slums on a

citywide scalecitywide scale Comprehensive approach in dealing with Comprehensive approach in dealing with

problems of land tenure, infrastructure, problems of land tenure, infrastructure, environment, construction and financingenvironment, construction and financing

Combination of self support, government Combination of self support, government subsidy and private cooperationsubsidy and private cooperation

Lead to amendments in rules and laws Lead to amendments in rules and laws which are obstacles to housing solutions which are obstacles to housing solutions for the poorfor the poor

BMK demonstrates strong BMK demonstrates strong PPP partnershipPPP partnership

P- Poor people/communities as key actors in P- Poor people/communities as key actors in identifying problems, developing plans to identifying problems, developing plans to resolve problems and implementing those resolve problems and implementing those

plans themselvesplans themselves P- Public; government, CODI, local P- Public; government, CODI, local

authorities, etc. Government as subsidy authorities, etc. Government as subsidy provider: CODI as facilitator, provider of provider: CODI as facilitator, provider of long-term housing loanlong-term housing loan

P- Private sector; NGOs, professionals, P- Private sector; NGOs, professionals, educational organizations etc. provide educational organizations etc. provide technical supporttechnical support

City-wide upgrading involving many possible city development actors and find various secured housing solutions for all communities in the city

City-widesurvey /joint planning,

search forsolutions together

Find varioussolutions suitable

for all communitiesin city

Community

Municipality

Community

Otherdev.agencies

On-siteUpgrading

Land-sharing&reconstruction

Reblocking &readjustment

Resettlements ่

Row-house

Flat

Detach house

Row-housing

Flat

Mixed approach

Baan Mankong ProcrssBaan Mankong Procrss

City-Wide Planning City-Wide Planning Organize meetings of stakeholders Organize meetings of stakeholders Establish joint committee to oversee Establish joint committee to oversee

implementationimplementation Survey all communities to identify Survey all communities to identify

problems and create holistic planproblems and create holistic plan Develop housing, land tenure and policy Develop housing, land tenure and policy

plan for whole cityplan for whole city

Form savings groupsForm savings groups Mobilize local resources, strengthen Mobilize local resources, strengthen

local groups, and build collective local groups, and build collective management skillsmanagement skills

Set up community working teamSet up community working team Collect information about land, Collect information about land,

housing, physical infrastructure, housing, physical infrastructure, income, employment, problems, and income, employment, problems, and existing development initiatives existing development initiatives

Conceptualize housing and Conceptualize housing and development goals regarding land development goals regarding land tenure, upgrading scheme, involvement tenure, upgrading scheme, involvement of local authorities, NGOs, etc. of local authorities, NGOs, etc.

Formulate financing planFormulate financing plan Work with architecture and engineer on Work with architecture and engineer on

developing housing designs and developing housing designs and infrastructureinfrastructure

Submit detailed plan to BMK committeeSubmit detailed plan to BMK committee

Community Survey all communities in districts and city

Community survey of all householdsIn the community and all communities in the city carried out by community people

การ

Participatory planning process

Loan processLoan process Loan approval Loan approval

Screened by local and regional committees Screened by local and regional committees before being sent to CODIbefore being sent to CODI

Approved by BMK sub-committee comprising Approved by BMK sub-committee comprising reps from communities, CODI, NHA,GSB, reps from communities, CODI, NHA,GSB, GHBGHB

If loan amount exceeds THB50 mln.If loan amount exceeds THB50 mln.(~USD1.7), approved by CODI board of (~USD1.7), approved by CODI board of directorsdirectors

Loan disbursementLoan disbursement Loans are disbursed in tranches based on Loans are disbursed in tranches based on

progress of projectprogress of project

Progress of Baan MankongProgress of Baan Mankong(up to March 2011)(up to March 2011)

NN umber of project approv umber of project approvalal 882882 NN umber of cities umber of cities 278278 Number ofNumber of communities communities

1,5521,552 NN umber of families umber of families

91,82291,822 Govt. subsidyGovt. subsidy (THB mln.(THB mln. ))

4,7064,706

Baan Mankong ChantaburiBefore and after

Baan Mankong: Baan Mankong: Financial AspectFinancial Aspect

Providing Flexible Financial Support Providing Flexible Financial Support

for City-wide Upgrading by Communitiesfor City-wide Upgrading by Communities

Grant

1) Upgrading of infrastructure and social facilities

2) Local management cost

3) Support for exchange visits, capacity building, seminars, coordinator

LoansFrom CODI

Revolving FundCommunities

Government Subsidy

Banks

Interest 4 %Members

Members

Members

Source of FinancingSource of Financing

Three components of BMK financing:Three components of BMK financing: Local communities’ own savings Local communities’ own savings

(10% of project cost)(10% of project cost) Government subsidy-Government subsidy-

THB80,000(~USD2,667) per familyTHB80,000(~USD2,667) per family Housing loan from CODIHousing loan from CODI

Government subsidyGovernment subsidy

Subsidy is given to community not to Subsidy is given to community not to individual familyindividual family

Allocation of THB80,000 Allocation of THB80,000 (~USD2,667)(~USD2,667)- Infrastructure developmentInfrastructure development 55%55%- Financial supportFinancial support 30%30%- Project managementProject management (incl.(incl. 15%15%

meetings, training, exchange visits, etc.)meetings, training, exchange visits, etc.)

CODI loanCODI loan A collective loan to community A collective loan to community

organization, not to individual householdorganization, not to individual household Collective land tenureCollective land tenure Loan maturity is 15 years and is payable Loan maturity is 15 years and is payable

in 180 equal monthly installmentsin 180 equal monthly installments Interest rate is fixed at 4% p.a. Interest rate is fixed at 4% p.a. Maximum loan amount per household is Maximum loan amount per household is

THB 300,000 (~USD10,000)THB 300,000 (~USD10,000) CODI finances up to 90% of the project CODI finances up to 90% of the project

cost.cost.

Loan Security: 1) Land and Loan Security: 1) Land and buildings are mortgaged with CODIbuildings are mortgaged with CODI

2) Guarantee 2) Guarantee agreement signed by chairman, agreement signed by chairman, committee and all members of the committee and all members of the community organization.community organization.

Re-lending to membersRe-lending to members

A loan from CODI is on-lent to A loan from CODI is on-lent to individual household with a margin individual household with a margin

of 2-3% added to e interest cost.of 2-3% added to e interest cost. The margin is set aside for the The margin is set aside for the

purpose of loan administration, purpose of loan administration, community welfare and serves as a community welfare and serves as a cushion for loan repayment in case cushion for loan repayment in case any member fails to meet his or her any member fails to meet his or her obligation in any particular month. obligation in any particular month.

subgroupsubgroupsubgroupsubgroup

Community organizationCommunity organization

Subgroup managementSubgroup management•Subgroup daily savingsSubgroup daily savings•Loan collectionLoan collection•Group guaranteeGroup guarantee•Help members who cannot payHelp members who cannot pay

Interest 4%

CODI

Community Cooperatives on lends to members at 6-7 %. Margin for community development, management and welfare

Loan management by communityLoan management by community

BMK Loan Performance BMK Loan Performance (as of (as of Mar.2011)Mar.2011)

(Accumulated amt.)(Accumulated amt.) THB mn.THB mn.(USDmn.)(USDmn.)

ApprovalApproval 4,464(149) 4,464(149) DisbursementDisbursement 2,700 (90) 2,700 (90) RepaymentRepayment 519 (17) 519 (17) OutstandingOutstanding 2,181 (73) 2,181 (73) NPLsNPLs 2.05% 2.05% BeneficiariesBeneficiaries

No. communitiesNo. communities 1,1191,119 No. householdsNo. households 25,86625,866

Funding sourcesFunding sources

Current funding sources for long-Current funding sources for long-term housing financeterm housing finance CODI initial capital fund approx. THB CODI initial capital fund approx. THB

2,800 mln.2,800 mln. Government budget (2009) Government budget (2009) THB THB

3,000 mln.3,000 mln. CODI-GHB Refinancing scheme THB CODI-GHB Refinancing scheme THB

500500 mln.mln.

CODI-GHB Refinancing CODI-GHB Refinancing schemescheme

Total amount: THB 500 mln.Total amount: THB 500 mln. GHB agrees to refinance BMK loans GHB agrees to refinance BMK loans

from CODI at the same interest rate from CODI at the same interest rate and same terms and conditionsand same terms and conditions

CODI and GHB agrees on CODI and GHB agrees on mechanism to compensate GHB for mechanism to compensate GHB for interest rate differentials interest rate differentials

Project assessmentProject assessment

Key success factorsKey success factors Strong community leadershipStrong community leadership Flexible, affordable financing for the Flexible, affordable financing for the

poorpoor People process which suits poor People process which suits poor

community livelihoodcommunity livelihood BarriersBarriers

Public land-use policiesPublic land-use policies Certain rules and regulationsCertain rules and regulations Coordination among relevant agenciesCoordination among relevant agencies

ChallengesChallenges Future funding for the programFuture funding for the program Scarcity of affordable land Scarcity of affordable land Linkage between formal and informal Linkage between formal and informal

financial marketsfinancial markets

New look of a slum in Pitsanuloke province

Bangbua Community before upgrading

Bangbua community during completion

Thank YouThank You