GrowthHousing finance

Land administration chain

Dr. Monika Hjeds LöfmarkNational Housing Credit Guarantee Board,

SwedenWUF 2010

Short introduction– Growth and development

Formal and informal methods of finance– Mortgages– Savings– Micro finance– Community loans– Remittances

The land administration chain– Connecting the issues of land, security of tenure and

housing finance

Outline of presentation

Introduction

Growth and capital– Physical– Human– Social

Growth and institutions– Formal– Informal

Growth and actions– Local knowledge and institutions are crucial– Do not invent the wheel twice– Gradual changes– Formal Institutional Improvements– Broad actions

Growth, urbanization and housing– Housing and housing finance

Formal mortgages

Volatile macro economy Lack of (long term) capital Lack of financial infrastructure Legal system, housing market reg., credit

bureau, valuations Credit risk Collaterals and income

– How to include households with low and moderate income?

– How to create a better infrastructure, secured ledning environment, adequate funding sources, legal systems, regulations, long term funding, insurance products etc.?

Formal Mortgages, % of GDP

Savings

Most common financial method Prepare housholds for regular payments Increase sustainability Larger autonomy for the savers Saving clubs, mobile bankers Connected with micro finance loan and

community loan High levels of inflation discourages savings

– How to formalize savings without high cost for the households?

Interest rates, MF

Community loans/savings

Loans for groups Promotes social development and

increases social capital, Reaches the (well organized) poor Infrastructure, land, housing Growing in importance

– How to scale them up?– How to increase their political impact?– How to connect with formal solutions, private

actors?

Remittances

Immigrants and foreign workers invest in their home countries

Huge amounts, significant part of GDP Little political impact Seldom used as income and collateral

– How to create more/better data?– How to include them into the formal systems?

Remittances, % of GDP, 2007

Guarantees

May correct for market failures Allocate risks Link formal and formal markets Demonstration projects Use carefully, must give incentive to

responsible behaviour

Land governance and housing finance

Property rights and introduction of titling processes– Pros and cons

Security of tenure – gradual process– If tenure is informal, security may depend on length,

size of occupation, community strength, support from NGOs etc.

– Tenure upgrading can be linked with housing loans– Innovative tenure and innovative loans– Provision of temporary occupation rights /leases,

long term leases and connect with finance– Simplified registration that can be upgraded– Strategic planning, planning standards according to

poor households

Ex: Registration/taxation in Ghana

Land administration chain

Land administration chain

BKN, the National Housing Credit Guarantee Board and Lantmäteriet - the Swedish mapping, cadastral and land registration authority

Launched at a seminar in Stockholm in June 2008 Improving Slum conditions through Innovative Financing. (by FIG ,UN-HABITAT, Lantmäteriet and BKN)

Educational program– Lantmäteriet discusses and presents issues concerning

good land governance, registration, GIS etc – BKN focus on housing finance in informal markets. We

are particularly interested in the role of guarantees and how guarantees may work to connect informal and formal markets.

Conclusion

Build social, human and physical capitalBuild and develop institutionsLink formal and informal institutions (ex. Fin.)Gradual and broad changesLocal initiatives/actions are crucialCooperation and inspiration

Remittances, billion US dollar 2008