KixiCrédito (Angola) SA,
Development Workshop
&
HABITERRA

Housing
Microfinance
presented to

29 th ANNUAL
CONFERENCE OF
A...
Objectives of this presentation
•
•
•
•

The case study illustrates the emerging Housing
Finance market in Angola
It illus...
Program Start




Mid 1990s massive numbers of people
escaping the war flooded into Luanda
and other coastal cities. Thi...
KixiCredito
Micro-Credit
• More than 17,000 clients,
62% of them women,
currently are receiving loans
through a network of...
KixiCredito Microfinance Institution










The aim of MFI is to provide capital to allow the economically active
...
Demand for Housing & Housing Credit
Housing Construction Cost
Breakdown

Pot ent ial Market Segment Pyramid

MINUA 2005

L...
Credit will be offered to clients for improving their
houses or building phased up-gradable houses over
several loan cycle...
Piloting housing
microfinance










In 2005 DW launched an experiment with housing loans to some of
KixCredito’s ...












Positive
Results

The demand for housing loans is great because KixiCasa offers microloans for housing e...
Client Profile:

Name: Melina Natchiiue, Date of Birth: June 24, 1954
Years in KixiCrédito: Member since 2003
Type of Busi...
KixiCasa Performance Indicators
Particulars

As of
Dec 2006

As of
31 Dec-07

As of
March-08

As of
Dec. 08

Total Number ...
CLIFF
HOMELESS INTERNATIONAL

HabiTerra - land management and housing
CLIFF
HOMELESS INTERNATIONAL

HabiTerra land
management and
housing

• HabiTerra provides urban development services linke...
Findings & Conclusions
•
•
•
•

•
•

The public sector responsible for the legal
regulation of citizen’s property rights i...
Recommendations
•

•

•

New sources of investment capital for housing
may be mobilised from non-state sources such as
pen...
Obrigado

Development Workshop Angola

–

Housing Microfinance
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African Union for Housing Finance Conference: Getting a rating to raise funding for housing microfinance

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Getting a rating to raise funding for housing microfinance: Joaquim Catinda, CEO, KixiCredito, Angola.

With more than 46 cities in Africa swelling to populations of a million people or more — and 17 of the world's 100 fastest-growing cities located in Africa — there is an acute need to develop housing solutions for so many urban residents. But raising the capital to meet that growing demand for housing remains a significant challenge. In 2013, the African Union for Housing Finance (AUHF) will host a conference under the theme "Raising Capital for Housing Finance.” The Africa-China Urban Initiative will organize a conference panel discussion on "Understanding (and harnessing) Chinese investment interest." Chinese investment in residential development in Africa is increasingly having an impact and demonstrating a track record of opportunity and experience. Panelists invited include Chinese investors setting out their experiences and expectations for the market and an African corporation that has received Chinese financing.

http://urban-africa-china.angonet.org/content/29th-annual-conference-mobilising-capital-housing-finance

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African Union for Housing Finance Conference: Getting a rating to raise funding for housing microfinance

  1. 1. KixiCrédito (Angola) SA, Development Workshop & HABITERRA Housing Microfinance presented to 29 th ANNUAL CONFERENCE OF AUHF Mauritius KixiCrédito Housing Microfinance 12 September 2013
  2. 2. Objectives of this presentation • • • • The case study illustrates the emerging Housing Finance market in Angola It illustrates how conventional housing finance products by-pass the poor. Demonstrating offerings available from commercial banks and other formal financial institutions, The role of the MFI Kixicredito in offering housing loan product to the lower end of the market.
  3. 3. Program Start   Mid 1990s massive numbers of people escaping the war flooded into Luanda and other coastal cities. This people were named the IDPs. Gathered in camps, E.G: Gika, Anangola, etc The retail business in the informal market was the main subsistency form for the poor during the war time Sector Privado AutoEmprego Empresa Estatal Administracao Publica Negocio Familiar KixiCrédito Parceira nos negócios
  4. 4. KixiCredito Micro-Credit • More than 17,000 clients, 62% of them women, currently are receiving loans through a network of over 1000 solidarity groups and 17 branches in 14 of Angola’s 18 provinces . Loaning over $30 million this year (2012). • Angola’s first non-bank Micro-Finance Institution KixiCredito has been launched to serve poor clients who do not have access to commercial banks.
  5. 5. KixiCredito Microfinance Institution      The aim of MFI is to provide capital to allow the economically active poor to consolidate and grow their businesses. KixiCrédito does this in the form of short term loans using a modified Grameen model of Solidarity group lending. While loans are meant as business investments they are also fungible and the money can in fact be used by the borrower for anything that she or he chooses as long as it is paid back in-full, and on-time. DW found that about 30% of microfinance clients’ loans were invested in their housing, to buy land, building start-ups homes, adding rooms or doing household improvements. Housing is seen by most KixiCredito clients as an economic investment and a form of savings or a retirement insurance. Housing Microfinance
  6. 6. Demand for Housing & Housing Credit Housing Construction Cost Breakdown Pot ent ial Market Segment Pyramid MINUA 2005 Land 16% Labour 12% Bankable Roofing 25% Elit e Middle Class Mortgage Banked Economically Act ive Poor Timber 5% 25% 60% Not Banked Potentially Housing MicroFinance Clients Blocks 21% KixiCrédito Cement, 21% Vulnerable Groups Heavilly Subsidised Housing 15% Un-Bankable Housing Microfinance
  7. 7. Credit will be offered to clients for improving their houses or building phased up-gradable houses over several loan cycles. KixiCrédito Housing Microfinance
  8. 8. Piloting housing microfinance      In 2005 DW launched an experiment with housing loans to some of KixCredito’s micro-entrepreneur clients to test the market for a microhousing product. Housing loans where made available to 50 of its best clients in Huambo who had completed 4 or 5 credit cycles without defaulting . Funding from Habitat for Humanity was secured to pilot the housing microfinance model. Technical assistance on methodology has been offered by Development Innovations Group. The KixiCasa loan was initially administered by the same credit officers under similar terms as the regular business loans but with a larger amount, from US$800 upwards and a 10-month repayment period. Subsequent cycles allowed this loan to grow up to US$2,500 for clients demonstrating capacity to pay and having a consistently good repayment record. KixiCrédito Housing Microfinance
  9. 9.       Positive Results The demand for housing loans is great because KixiCasa offers microloans for housing even to poor clients who do not have land titles and therefore can not provide bank guarantees. Risks to the MFI are kept to a minimum by keeping loans small (less than US$2,500) and for a relatively short period (about one year) during which the risk of expropriation & loss of land is relatively low. KixiCasa loans to clients to invest incrementally in their housing in stages starting with purchase of a plot of land then building room by room over several years. Micro-entrepreneurs with undocumented incomes from informal market trading are eligible for KixiCasa loans which would not normally qualify for bank loans. At the end of the pilot phase, KixiCasa had demonstrated a 97% repayment rate and a clientele of 80% women. Habitat for Humanity agreed to provide funding for a further 250 loans. KixiCrédito Housing Microfinance
  10. 10. Client Profile: Name: Melina Natchiiue, Date of Birth: June 24, 1954 Years in KixiCrédito: Member since 2003 Type of Business: Commerce (local agricultural commodities) Weekly Business Turnover: from $100 to $150 Number of Children: 4, Household members living with her: 8 Future Plans: To construct her own neighbourhood convenience store Excerpts from her interview: “….before joining a Solidarity Group of KixiCrédito, my life was quite difficult. Having been widowed in the war at an early age, I was left with 4 children and my income from buying and selling corn flour was not enough for my family. But when I received my first loan from DW-KixiCrédito for my small business, it changed my life significantly. I have now a decent house and I am now building a second one for my grown-up children. … I want you to understand that this project can change and improve people’s lives…just like mine. So, let’s unite together in supporting this program so it can go on helping many more poor people like me …” KixiCrédito Housing Microfinance
  11. 11. KixiCasa Performance Indicators Particulars As of Dec 2006 As of 31 Dec-07 As of March-08 As of Dec. 08 Total Number of Clients 51 242 292 350 New Clients for the Period 51 18 50 58 Total No. of Women 41 127 135 175 Total Loan Releases (Accumulated) $104,800 $463,672 $533,208 $583,338 Loan Releases for the Period 104,800 29,806 69,536 50,130 Average Loan Per Borrower $2,054 $1,656 $1,671 $1,671 Outstanding Loan Portfolio $59,215 $255,368 $267,523 $317,653 Current 57,993 247,889 215,986 n/a 45 212 145 220 1,262 7,479 40,263 n/q 6 30 147 n/a 3% 3% 16% 3% Interest Income (Accumulated) $17,049 $81,661 $103,639 $120,000 Interest Income for the Period 5,487 64,612 21,978 n/a Total Guarantee Savings Generated $8,600 $7,869 $5,502 n/a Repayment rate 97% 96% 75% 96% Client Retention Rate 100% 100% 100% 100% Number of Drop-Outs 0 0 0 0 Client in Current Status (On time ) Amount in Arrears Clients with Arrears Arrears rate KixiCrédito Housing Microfinance
  12. 12. CLIFF HOMELESS INTERNATIONAL HabiTerra - land management and housing
  13. 13. CLIFF HOMELESS INTERNATIONAL HabiTerra land management and housing • HabiTerra provides urban development services linked to low-cost housing delivery, including: • Participatory urban planning (peri-urban and neighbourhood level) • Urban land layouts: green fields (expansion zones) and brown fields (upgrading) • Land control through urban cadastres & land registries • Provision of secure land rights in legal and socially legitimate terms
  14. 14. Findings & Conclusions • • • • • • The public sector responsible for the legal regulation of citizen’s property rights is very bureaucratic. The process for the concession of land title to real estate developers is slow and expensive. There too many overlaps between the various State actors in relation to the administration and attribution of property rights Private real estate developers largely shy away from providing low-income housing, in spite of having a large market and huge demand for this type of product. Real estate developers are drawn to the lucrative, high-end of the market. Most investors in social housing are only looking to make their profits from Government subsidies.
  15. 15. Recommendations • • • New sources of investment capital for housing may be mobilised from non-state sources such as pension funds and private investment funds. Social investors can provide guarantees to commercial banks that can be used to mitigate their risks and encourage them to unblock commercial loans to housing finance and Microfinance Institutions. AUHF to encourage sustainable initiatives throughout the continent • Angola needs more investors with courage to find sustainable market solutions for social housing and real-estate development.
  16. 16. Obrigado Development Workshop Angola – Housing Microfinance
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