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WITH
millions of houses needed for Filipinos with no
dwellings of their own, the government has hit on the
idea of merging low-cost housing development with the
techniques of microlending to try closing faster the
housing gap.
The
agreement for such microfinancing was signed by Vice
President Noli de Castro, concurrently Housing and Urban
Development Coordinating Council chief, with the Bangko
Sentral ng Pilipinas on Wednesday, and is seen to
benefit at least 3 million families.
The
advantage of the program is that it is market-driven
while being propoor, because borrowers must still have
the capacity to pay a loan as low as P150,000. The
maximum under the program is P300,000. They could pay as
often as every day.
Deputy
governor Nestor Espenilla Jr. said in a press conference
Manila is one of the first in the world to offer
microfinance housing loans for its people. “This is
commercial microfinance. This is not a subsidized
program.”
Espenilla said a microhousing loan could also be taken
out to improve existing dwellings or acquire a modest
lot on which to build a house.
He said
the Development Bank of the Philippines and HUDCC are
accrediting rural-based thrift banks to be conduit banks
for the program, whose concept and development
originated from the Asian Development Bank.
“Rural-based thrift banks are expected to take a look at
it because they are already into retail lending. The big
commercial and universal banks were seen to engage in it
as well but likely only as funding source,” added
Espenilla.
Housing
microfinance loans, just like residential housing loans,
are 50 percent risk-weighted and are considered Agri-Agra
lending compliant.
Microloan borrowers are a reliable lot, their past due
ratio at only around 4 or 5 percent versus the 30
percent past-due ratio of commercial borrowers,
according to Espenilla. “This adds to our confidence
that housing microlending is a sustainable product.”
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