Ts.Enkhbayar CEO [email protected] New Delhi, India 2010.04.19 MONGOLIAN MORTGAGE CORPORATION...
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Transcript of Ts.Enkhbayar CEO [email protected] New Delhi, India 2010.04.19 MONGOLIAN MORTGAGE CORPORATION...
Ts.EnkhbayarCEO
New Delhi, India 2010.04.19
MONGOLIAN MORTGAGE CORPORATION M I K
Regional Symposium on Pro-Poor
Housing Finance in Asia and Pacific,
MORTGAGE MARKET DEVELOPMENT IN MONGOLIA
ISSUES AND CHALLENGES
Content • Housing finance system development
process• Mortgage market overview• Status of conditions on mortgage
market development • MIK performance , issues and
challenges
Housing finance system development overview
• Top down system• Financed by 100% state• Waiting list• Free housing delivery
Before 1990s Top down system
• Housing supply stopped• Housing law (1997)• State Housing policy
• HFS needs• Enabling environment
• Housing privatization • ADB project 3090• Some initiatives by private
sector
1990-2000 Transitional period
• Setting up mortgage legal environment
• Proper PMM infrastructure
• capital market development
• Capacity building, Institutional strengthening
• Warehousing • Liquidity facility• Issuance MIK bond• Phased development
approach
2008 …. Development
4
Housing Areas:
Ger area
Planning – not proper Water supply – kiosks (potable)Sewage – pit latrineHeating – stove using coal and woodElectricity – yesSocial infrastructure – not sufficientLand ownership –yesHousing finance – savings, assistance from relatives and friends, loans
Planning –proper , Water supply – central systemSewage – central systemHeating – central systemElectricity – central systemSocial infrastructure –sufficientApartment ownership –yesHousing finance – mortgage loans, savings
70%- population59%- UB80-90% provincial towns
Serviced apartment area
5
2009.12.31Mortgage market overview Market Core Indicators 2003 2004 2005 2006 2007 2008 2009
Total Debt Outstanding /mln.MNT/ 8,2 19 31 74,3 164,6 217 226 Total Debt Outstanding / Changes/ : 0% 132% 62% 141% 122% 8.3% 8.5%
Debt Outstanding/Borrower /mln MNT/ : 7,2 6,6 6,5 8,3 10,0 13 13.6
Number of Mortgage Borrowers 1,057 2,892 4,774 8,984 16,444 16 590 16 628
Market W.A.I.R /Ann , %/: 12.0% 14.5% 14.7% 17.8% 16% 18.7% 17.2%
Original W.A. LTV % : 83% 70% 75.% 76.% 68% 70% 78%
2003 2004 2005 2006 2007 I Quarter, 2008
8,199,617.
73
19,018,145
.68
30,839,715
.65
74,318,389
.54
164,625,90
1.96
205,857,09
0.12
Shareholders
MIК
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.
Established 06.09.2006
Mortgage market activity
LenderCommercial
Bank
loans Mortgage Bonds INVESTOR
(International,
Domestic )Funding Funding
Borrower
Loan
₮
SECONDARY MORTGAGE MARKET ( Raise fund through making a portfolio on similar housing
mortgage loans to sell it to the third party)Lender- Agency- Investor
Secondary Mortgage Market
Institution
2 major role i) market development driver I
i) Pioneering SMM
MONGOLIAN MORTGAGE CORPORATION
Shareholders
Board Members
Financial Committee
Operational Committee
Risk Committee
Legal & Audit Committee
CEO
Asset management and Securitization
Division(Asset management officer, Securitization officer)
Finance and Investment Division(Senior finance officer, Accountant, Assistant Accountant)
Risk Management Division
(Risk management officer)
Internal operation Division
(IT, Layer, Cooperation officer, Administration & HR officer)
8
Reason why we established MIK
– Increase the affordability of the housing loan – Stable structure for long term financing – Increase in housing mortgage market – Need for capital market development– Liquidity facility
Dec 2009 swapped MIK bond with mortgage pool
МIK OPERATION
84%16%
10
2008.IV 2009.I 2009.II 2009.III 2009.IV -
1,000.00
2,000.00
3,000.00
4,000.00
5,000.00
6,000.00
7,000.00
8,000.00
9,000.00
1,630.49
2,614.38 2,707.99 2,429.80
7,969.78
Outstanding mortgage pools 2008-2009 bln Tug
MNT92%
USD8%
16% - PWR84% - PWOR
DEVELOPMENT PHASES
Diversification 2017-2020
Development period 2013-2016
Start up period (setting up solid foundation for mortgage market development)2007-2012
Issues to be done for developing efficient mortgage market development
Legal environment
Mortgage lawMortgage securitySPV Pool registrationTax matterMIK legal status
Primary mortgage market i
nfrastructure
Standardization of mortgage loansProperty appraisal Mortgage database systemMortgage insuranceCredit bureauCapital market developmentRating Income verification system
Market environment
Political stabilityEconomic stabilityBalance on Supply and demand Creating domestic potential investor AffordabilityCapacity developmentInstitutional capacityCoordination and linkages of market playersQuality of collateral •Efficiency of Urban planning, land development, construction quality•Effective operation and maintenance
14
MIK ProgressSep 2006 • MIK established June 2007 • MOU signed with KfW, MOF, BOMNov. 2007 • First mortgage pool purchasedJune 2008
• MIK set up internal operational procedures
Oct. 2008• Mortgage standardization procedure
approvedMay 2009 • Mortgage toolkit with IFC TA projectJune 2009 • Mortgage law approvedJuly 2009 • Agreement with MOF-KfW
August 2009 • FRC shelf registration MIK BondSep. 2009
• UNESCAP-UNHABITAT- NHB workshop
Oct.2009 • first OTC transaction and procedureOct 2009 • First MIK bond issued and soldDec 2009 • KfW TA startedJan 2010 • MIK IT infrastructure
March 2010• Micro housing finance study project ,
IFCApril 2010 • ABS law has discussed by ParliamentApril 2010
• Domestic investor-insurance companies involved
April 2010• Mortgage guarantee program
initiated with FMO
15
learning• Play dual role
– Driven force of setting up Mortgage market development as well as capital market
• (laws, regulations, policy framework, financial infrastructure, capacity building, workshops, RTD, lobbying, etc)
– Acting as secondary mortgage institution
• Purchasing pools from banks, warehousing m issuing bonds and selling investors etc
• Institutional strengthening and capacity building
ISSUES AND CHALLENGES– Implementation of laws and regulations recently approved– Economic stability– Different Understanding of mortgage issues– Standardized and documented origination and servicing– Low affordability rate– Local rating agency– Inappropriate Professional appraisal– Title and Lien registration, enforcement– Balance sheet treatment with recourse based loan pools and bonds– Bankruptcy remote vehicles – Tax and accounting guidelines – IT infrastructure AM– Credit scoring – Mortgage insurance– Mortgage guarantee program
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What is next?• Improve accessibility housing loans to LIHs
– Housing micro finance study,– Guarantee program with international orgs.
• ABS , SS laws and related regulations, by laws• Issue bonds to domestic and international
market• Expanding cooperation
– Network meeting in Mongolia APHFU– Intensive development of mining industry –coal
mining, copper mining, gold etc and
18
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