By Ruben Hortelano
04/03/2008 [ tribune.net.ph ]
The government has adopted a microlending scheme for low-cost housing development projects for those currently living in makeshift dwellings.
Housing and Urban Development Coordinating Council (HUDCC) chief and Vice President Noli de Castro signed an agreement with the Bangko Sentral ng Pilipinas (BSP) on the proposed housing microfinance, an agreement seen to benefit at least three million household.
The pro-poor program is entirely market driven as borrowers must have the capacity to pay a housing loan amounting to P150,000 up to a maximum of P300,000. Deputy BSP Gov. Nestor Espenilla Jr. told reporters that the Philippines will be one of the first countries in the world to offer housing microfinance loans.
“This is commercial microfinance. This is not a subsidized program,” Espenilla stressed. “The natural target markets are makeshift housing dwellers of about three million, but with the ability to pay down the loan as frequently as every day under the plan.”
Commercial borrowers normally pay for their housing loans every month, but the retail nature of the housing microfinance program allows borrowers to pay as frequently as they could.
Espenilla said borrowers could take out a micro-housing loan to improve existing dwellings, construct a new one or acquire a modest lot on which to build a house. He said the Development Bank of the Philippines and HUDCC are even now accrediting rural-based thrift banks that may act as 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 in the housing program 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, Espenilla said.
Housing microfinance loans, just like residential housing loans, are 50-percent risk-weighted and are considered Agri-Agra lending compliant.
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