Meliza H. Agabin
(With thanks to colleagues Anthony Petalcorin
and Mark Guillermo)
2009 RBAP-MABS National Round table Conference
May 12-13, 2009
Hyatt Hotel and Casino
Manila

What is HMF?
Home Improvements
“The application of
microfinance House Construc9on
principles and House/Lot Acquisi9on
methodologies to the
provision of shelter
finance.”*
- mall loan amounts!
s
- short-terms loans!
- alternative forms of Microentrepreneurs Households that have
no/limited access to
collateral! who rely on
decent housing
microenterprises for a
- regular amortization ! living
*/CGAP!

What is HMF?
Home Improvements
Loans and other financial services
to low-income households:
• mprove or repair existing homes,
I House Construc9on
• onstruct a new home in stages
C
• urchase a new home,
P House/Lot Acquisi9on
• uy land
B
• nstall or improve utilities and
I
other basic services.
Excluded: the financing of
consumer items such as
refrigerators, ranges, furniture, TV
sets, etc.
Microentrepreneurs Households that have
who rely on no/limited access to
microenterprises for a decent housing
living

Microenterprise vs. Housing Microfinance Loan
MEP HMF
Small loan size Larger loan size
up to P150K up to P300K
Short Longer
repayment Repayment
term: Not more Term: up to 3 to
than 12 months 5 years
RBAP‐MABS Program has submi3ed the Micro Housing Loan Product
Procedures to the BSP for final approval. Loan sizes are consistent with
HUDCC approval.

Market Research Findings:
Clients
Survey conducted
Surveyed 485
by MABS & MICRA
Owns a House (72%) 349
in August 2008
30% No Legal Title 105
shows:
17% Living for Free/RenWng 59
11% RenWng 38
37% Own a land 129
- Excellent potential
- Majority owns a home
- Majority of businesses
are home based

Market Findings:
• More demand for home
improvements. MEP HMF
• Home repairs e.g. roof, walls,
kitchen and extensions, are
funded mainly from personal
cash savings (72%) including
savings in building materials.
• Some have already used some of
their previous bank micro loans
for home improvement.

Who needs HMF?
Microentrepreneurs who Households that have no or
rely on microenterprises for limited access to decent
a living housing
Rural banks should develop a range of housing microfinance products
intended to respond to the need of low-income entrepreneurial families to
improve the quality of their homes or build new ones.

Benefits:
Bank
Clients
• CompeWWve Edge • No hard collateral
• Client retenWon required < 50K
• Diversity of loan • Fast loan
products approval
• Improve field • Longer term
staff producWvity • Easy and
• Increase affordable
profitability installments

Results of the Pilot Test:
Pilot tested in August 2008 in Green Bank, CanWlan Bank & GM
Bank with 2 branches each iniWally parWcipaWng.
ComparaWve Performance:

CLIENT STORIES FROM PILOT BANKS

CanWlan Bank Client Mr. Hingpit received a loan
to complete construcWon of new home
Old house of Mr. Visited by MABS/USAID a
few weeks ader receiving
Hingpit 70K HMF Loan
A vegetable vendor & microenterprise bank client of Cantilan Bank for
over seven years.

Green Bank Client Sonia Melo, has received 3
loans for various home improvements
1st Loan Window Grills
2nd Loan Room ParWWon
3rd Loan Ceiling
Next Loan: Room RenovaWon

Green Bank Client, Herminia Ferrer, with exisWng micro agri loan,
borrowed P20k home improvement loan with 6 mos. term.
Ceiling
Overhead cabinet
Carpenter husband does repair
Window Grills works.

Green Bank Client Herminia ferrer
 The couple plans to improve their store – including cemenWng the flooring
Next project is productive housing
- improve store space
Proposed Improvement

GM Bank Client Angelina Valerio
• oultry supply & grocery business
P
• pplied for P60K, 6 months
A

Plans Targets
Seek BSP approval to increase loan size  2nd Quarter 2009
and loan term for lot and house
acquisition loans
Rollout to additional banks 3rd Quarter 2009
The potential of housing microfinance depends
on the (rural bank’s) ability to move beyond the
confines of its original product characteristics
and more deeply understand and respond to the
needs of its clients. - ACCION

THANK YOU.