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Housing Microfinance (HMF): For the Filipino Micro-entrepreneurs

Housing Microfinance (HMF): For the Filipino Micro-entrepreneurs. Meliza H. Agabin (With thanks to colleagues Anthony Petalcorin and Mark Guillermo). 2009 RBAP-MABS National Round table Conference May 12-13, 2009 Hyatt Hotel and Casino Manila. What is HMF?.

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Housing Microfinance (HMF): For the Filipino Micro-entrepreneurs

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  1. Housing Microfinance (HMF):For the Filipino Micro-entrepreneurs Meliza H. Agabin (With thanks to colleagues Anthony Petalcorin and Mark Guillermo) 2009 RBAP-MABS National Round table Conference May 12-13, 2009 Hyatt Hotel and Casino Manila

  2. What is HMF? “The application of microfinance principles and methodologies to the provision of shelter finance.”* • small loan amounts- short-terms loans- alternative forms of collateral • regular amortization */CGAP

  3. What is HMF? • Loans and other financial services to low-income households: • Improve or repair existing homes, • Construct a new home in stages • Purchase a new home, • Buy land • Install or improve utilities and other basic services. • Excluded: the financing of consumer items such as refrigerators, ranges, furniture, TV sets, etc.

  4. Microenterprise vs. Housing Microfinance Loan RBAP-MABS Program has submitted the Micro Housing Loan Product Procedures to the BSP for final approval. Loan sizes are consistent with HUDCC approval.

  5. Market Research Findings: Survey conducted by MABS & MICRA in August 2008 shows: - Excellent potential - Majority owns a home - Majority of businesses are home based

  6. Market Findings: • More demand for home improvements. • Home repairs e.g. roof, walls, kitchen and extensions, are funded mainly from personal cash savings (72%) including savings in building materials. • Some have already used some of their previous bank micro loans for home improvement.

  7. Who needs HMF? Rural banks should develop a range of housing microfinance products intended to respond to the need of low-income entrepreneurial families to improve the quality of their homes or build new ones.

  8. Benefits:

  9. Results of the Pilot Test: Pilot tested in August 2008 in Green Bank, Cantilan Bank & GM Bank with 2 branches each initially participating. Comparative Performance:

  10. CLIENT STORIES FROM PILOT BANKS

  11. Cantilan Bank Client Mr. Hingpit received a loan to complete construction of new home A vegetable vendor & microenterprise bank client of Cantilan Bank for over seven years.

  12. Green Bank Client Sonia Melo, has received 3 loans for various home improvements

  13. Green Bank Client, Herminia Ferrer, with existing micro agri loan, borrowed P20k home improvement loan with 6 mos. term. Ceiling Overhead cabinet Carpenter husband does repair works. Window Grills

  14. Green Bank Client Herminia ferrer • The couple plans to improve their store – including cementing the flooring Next project is productive housing - improve store space Proposed Improvement

  15. GM Bank Client Angelina Valerio • Poultry supply & grocery business • Applied for P60K, 6 months

  16. Present and Future Plans for Roll Out The potential of housing microfinance depends on the (rural bank’s) ability to move beyond the confines of its original product characteristics and more deeply understand and respond to the needs of its clients. - ACCION

  17. THANK YOU.

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