African Union for Housing Finance Conference: Affordable Housing Finance
2011. 06. 27 Ulaanbaatar, Mongolia HOUSING FINANCE MARKET IN MONGOLIA Ts.Enkhbayar CEO, MIK WORKSHOP...
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Transcript of 2011. 06. 27 Ulaanbaatar, Mongolia HOUSING FINANCE MARKET IN MONGOLIA Ts.Enkhbayar CEO, MIK WORKSHOP...
2011. 06. 27
Ulaanbaatar, Mongolia
HOUSING FINANCE MARKET IN MONGOLIA
Ts.EnkhbayarCEO, MIK
WORKSHOP ON HOUSING
FINANCE
Content
• Housing condition• Housing finance market• Achievements and Challenges• Future steps
2
Housing Condition
Ger House,apartment
Other
UrbanTotal Urban household: 479 503 (67%)
156 744 (32.7%) 316 116 (65.9%) 6 643 (1.4%)
Rural Total Rural household: 234 277 (33%)
234 277 (70.9%) 66 692 (28.5%) 1 493 (0.6%)
Some Housing Statistics 2010 – result of Census POPULATION
2 754 685
HOUSEHOLD 713 780
Ger
322 836 (45.2%)House, apartment
382 808 (53.6%)Other
8 136 (1.1%)
3
Ger Areas:
- Planning – not proper - Water supply – kiosks (potable)- Sewage – pit latrine- Heating – stove using coal and wood- Electricity – central system- Social infrastructure – not sufficient- Land ownership –yes- Housing finance – savings, assistance from relatives and friends, loans
● Ger – 322 836 (45.2%);● Self built house – 209 931 (29.4%);
Housing Areas:
- Planning –proper , - Water supply – central system- Sewage – central system- Heating – central system- Electricity – central system- Social infrastructure –sufficient- Apartment ownership –yes- Housing finance – mortgage loans, savings
● Apartment – 152 338 (21.3%);● Luxury detached house – 3 839 (0.5%);● Workers flat & dormitory-10 334(1.5%);● Other public dormitory – 6 356 (0.9%);
70%- Population; 59%- UB; 80-90% Provincial Towns;
70%- Population; 59%- UB; 80-90% Provincial Towns;
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Housing finance system development overview
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Housing Finance Market
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Market indicators 2003 2004 2005 2006 2007 2008 2009 2010 2011.Q1
Total Debt Outstanding, mln.₮ 8,199.6 19,018.1 30,839.7 74,318.4 164,625.9 217,098.1 226,040.6 333,776.6 375,101.6
Numbers of Total Borrowers 1,057.0 2,892.0 4,774.0 8,984.0 16,444.0 16,590.0 16,628.0 19,700.0 20,597.0
Market Interest Rate, % 12.0% 14.5% 14.7% 17.8% 16.0% 18.7% 17.7% 15.7% 14.8%
Mortgage market percentage of Systemic loan market, %
1.35% 1.81% 2.31% 3.33% 8.01% 8.27% 8.51% 10.72% 10.05%
Mortgage market overview
Market growth Market demand
Issues to be done for developing efficient mortgage market development
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Main Goal Promotion and development of primary and secondary mortgage markets by raising medium to long term funds on domestic and foreign capital market through a series of capital market tools to create and ensure s smooth functioning of long-term financing system to promote affordable home ownership and urban development for Mongolia’s people.
Why we established MIK- Increase the affordability of the housing loan
- Stable structure for long term financing
- Liquidity facility
- Increase in housing mortgage market
- Need for capital market development
Shareholders
Established 06.09.2006
Мongolian Mortgage Corporation (MIK)
• Healthy and well structured Institutional set up;• Total mortgage pool of purchase, 10.3 bln MNT; (PWR,
PWOR)• MIK issued covered bond, 6.3 bln MNT;• MIK Bond listed as a repo financing instrument under
Bank of Mongolia;• Standardized and documented origination and servicing;• Developed 2 Toolkits:
– Mortgage loan; Micro housing loans
• The shelf registration• Mortgage law, Asset backed securities law has been
approved• Capacity development KfW project
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МIK acheivements:
МIK COOPERATION
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Projects:•KFW-Promotion of Mortgage Financing Mongolia project •IFC-Localization of Mortgage lending toolkit•IFC-Micro Housing Finance Project
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• Government policy and programs 40000, 4000, 100000
• Funding support for Housing and housing finance• Supply side driven by private sector is growing• Housing finance system was set up-provite sector• Mortgage loan became one of the best financial
product • Primary Mortgage market is in place • Secondary mortgage market does start up• The shelf registration -FRC• Legal framework was set up
– Mortgage law, Asset backed securities law
• The first OTC market initiative has been commenced• Mortgage loan standardization and documentation• Capacity building on mortgage market development
Achievements
– Lack of long term funding– Low affordability rate – Capital market development- weak– Understanding of mortgage related business – Insufficient Mortgage infrastructure
• Professional appraisal• Credit scoring • Mortgage insurance• Tax and accounting guidelines • IT infrastructure
– MIK plays dual role: • driven force of mortgage market development;• Cope business development
– Economic stability– There is no local institutional investors– Absence of clear PPP on housing finance 12
Challenges
– Clear Government affordable housing and housing finance strategy
– Needs strong explicit and implicit support by State (funding, guarantee)
– PPP on housing and housing finance market development
– Deepening secondary mortgage market • Needs long term funding that could relief mortgage loans from
banks and convert into securities
– Encouraging funding and equity investments by international financial institutions (EBRD, IFC, USAID, KFW….)
– Domestic institutional investor (SSFund/pension fund)– Strong cooperation among relevant institutions
13
What we are looking for…?
THANK YOU
Mongolian Mortgage Corporation LLC /MIK/
MIK Building , United Nations street-38Chingeltei district-4, 15160Ulaabaatar, Mongolia
www.mik.mn, [email protected] Tel: (976) 11-328267Fax (976) 11-313338