Not a member yet?
|
lovephileo's review
Investment Sector: Emerging Markets Submitted by Lovephileo 
, WEB CONSULTANT / PASTOR
at LIGHT OF THE WORLD CHRISTIAN CENTER
8 months ago Tags: housing loans microfinace housing loan Add Tag |
Good News! LOW-INCOME earners may now take advantage of affordable housing loan product in the Philippines. This was made possible after the Philippine central bank, Banko Sentral ng Pilipinas (BSP) and Housing and Urban Development Coordinating Council (HUDCC) sealed an agreement to implement the housing microfinance program.
Under the terms of agreement, the implementation of the housing microfinance program will initially be patterned on the designed framework of the Development of Poor Urban Communities Sector Project, a government social housing and community development program being executed jointly by HUDCC and Development Bank of the Philippines (DBP). Asian Development Bank, also provided technical assistance as well as $30 million in cocessional loan for the development of the program.
The housing microfinance program allows poor households to avail of housing loans in small loanable amounts, higher frequency of payments to make the loan product much more affordable and less documentation requirements.
Here's the deal. The program offers a maximum loanable amount of Php150,000.00 for home improvement and repair and Php300,000.00 for house and lot acquisition. The program also provides incentives to encourage banks to participate. Participation in the program can serve as alternative compliance to the mandatory credit allocation to agrarian reform and agricultural activities as required by a presidential decree. Banks cal also use simpler documents for loan applications and accept collateral substitutes in the absence of a land title.
Risk assesment of the loans will be the same as the usual real estate loans with 50% risk weighting since the central bank does not consider housing microfinance as "high risk" due to high repayment rate and low past due rate of 4%.
Banks that want to offer the product would have to be accredited by the HUDCC and DBP.BSP Deputy Governor Nestor Espenilla said that the coutry was among the first to integrate the principles of microfinance to housing loans that was previously applied only to microenterprise financing. He also said that rural and thrift banks are the ones that will likely be interested, given their experience in this kind of lending.
Did you find this article useful?
3 comments ↓
WEB CONSULTANT / PASTOR at LIGHT OF THE WORLD CHRISTIAN CENTER