MANILA, Philippines - State agency
Home Guaranty Corp. (HGC) has approved the guidelines for the implementation of
a guaranty program for microfinance housing loans.
HGC is a key shelter agency under the
Housing and Urban Development Coordinating Council (HUDCC) chaired by Vice
President Jejomar C. Binay. HGC is mandated to mobilize private investments in
housing through a system of guarantees and incentives. HGC’s charter tasked the
corporation to prioritize low-cost and socialized housing.
The guaranty for microfinance housing
loans will cover loans of up to P400,000 extended by microfinance institutions
(MFI) to their individual members and clients for the acquisition,
reconstruction or renovation of the houses they own.
MFI members and clients include those
who are gainfully employed but without fixed compensation, such as vendors,
fisher folk, farmers, carpenters and those engaged in the informal economy.
Without documentary proof of income to establish paying capacity and collateral
to offer, these sectors are traditionally excluded from the formal credit and
financing system.
The HGC guaranty will encourage MFIs
to provide more credit for housing purposes without the need for real estate
collateral. The microfinance guaranty program, according to HGC president
Manuel R. Sanchez, is part of the agency’s overall strategy for expanding its
business to serve the marginalized sectors and those in the countryside.
HGC’s marketing efforts in the
countryside resulted in the approval of P695 million worth of guaranty lines to
12 rural banks since July 2010.
Guaranty line applications from five
rural banks namely: Rural Bank of Tanza Inc., Rang-ay Bank Inc., Rural Bank of
Guinobatan Inc, Cantilan Bank Inc. and Rural Bank of Mabitac, Inc. were
approved during the July 24 meeting of the HGC board. VP Binay, who sits as
vice-chairman of the HGC board, presided over the meeting.
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