New Models in Housing Microfinance

Microfinance Learning and Innovations After Hours Seminar April 22, 2008

Commercial Bank Downscaling Commercial Bank Downscaling Model for Housing MicrofinanceModel for Housing Microfinance

Presented byPresented byFranck Daphnis, President and CEOFranck Daphnis, President and CEO

Private, for profit international firm Private, for profit international firm committed to fostering innovative solutions committed to fostering innovative solutions in the fields of development finance and in the fields of development finance and urban and community services.urban and community services.Established in February 2005Established in February 200545 staff worldwide45 staff worldwideTwo $8 million dollar global programs Two $8 million dollar global programs funded by the Bill and Melinda Gates funded by the Bill and Melinda Gates Foundation focused on pro poor urban Foundation focused on pro poor urban developmentdevelopment

oo Housing Finance for the Poor (HFP)Housing Finance for the Poor (HFP)oo Urbis Urbis

Company OverviewCompany Overview

Overview of Key ModelsOverview of Key Models

NonNon-- Microfinance Commercial Microfinance Commercial Bank Bank ““downscalingdownscaling””

Service (or Agency) ModelService (or Agency) Model

Microfinance Institution Microfinance Institution ““up up scalingscaling””

How Commercial Banks How Commercial Banks Deliver Housing Deliver Housing MicrofinanceMicrofinance

ExamplesExamples

NonNon-- Microfinance Commercial Bank Microfinance Commercial Bank ““downscalingdownscaling””

Banco de Credito (Peru)Banco de Credito (Peru)

Service (or Agency) Company Service (or Agency) Company AMEEN (Lebanon)AMEEN (Lebanon)CapStone (India)CapStone (India)

Microfinance Institution Microfinance Institution ““up scalingup scaling””Mibanco (Peru)Mibanco (Peru)Banco Sol (Bolivia)Banco Sol (Bolivia)Grameen (Bangladesh)Grameen (Bangladesh)

Expanding Housing Expanding Housing MicrofinanceMicrofinance

Micro mortgagesMicro mortgages

WhatWhat’’s on the horizon?s on the horizon?

The MFI/NGO Model for Housing Microfinance

Presented by Patrick Kelley, Director of International Housing Finance

Stoc kpiled ma ter ials

S avings

R emittanc es & Cash on hand

Own skills

Budget & plans

Social ne twor k labor & support

La nd

Monetary Non-monetary

INPUTS

+ +

OUTPUTS

Improved Asset

Fixed rate Micro-loan

Technical assistance

Loan product development

Purchase sensitive building materials & expertise

Volunteer la bor

Better Credit History

Stronger Community

Sweat equity

Aligning Monetary and Non‐Monetary Inputs

The Manufacturer/Retailer Corporate Engagement Model for

Housing Microfinance

Presented by Stephanie Schmidt, Managing Director

Full Economic Citizenship

Criteria for area selection

• Start in major metropolitan areas

• Communities with low risk of eviction

• Organized and accessible

• Large scale > 500,000 units (10,000 clients)

• Local retailers available

• Preferably undergoing urbanization and/or land regularization programs

Osasco: first Brazil location

A CASA É SUA*

Project planning

Finance counseling

Marketing & partnership strategy

Membership Sales & Management

Senior mason assistance

PLANNING

CONSTRUCTION SUPPORT

LOCAL MANAGEMENT

Components to be added progressively

Fosteringgreen/socialtechnologiesandcommunityprojects

* The house is yours (local welcome saying). With you step by step

Construction training facilitation

Construction material companies, banks and other businesses interested in the segment

Store A

ACES*ACES

Store B

ACES

Discounts

Promotions

Commissions

VALUE CAPTURE

Com você passo-a-passo

Key components of ‘A Casa é Sua’ programHybrid Value Chain approach: bringing together CSOs, companies and other players aiming at improving self construction efficiency and slum dwellers' housing conditions

Thank you!

For further information and resources, please visitwww.microlinks.org/fs and click on “housing.”

A screencast of this panel discussion will shortly be available at www.microlinks.org/afterhours.