Growth Housing finance Land administration chain Dr. Monika Hjeds Löfmark

1. Growth Housingfinance Land administration chain Dr. Monika Hjeds Löfmark National Housing Credit Guarantee Board, Sweden WUF 2010

2. Short introduction Growth and development Formal and informal methods of finance Mortgages Savings Micro finance Community loans Remittances The land administration chain Connecting the issues of land, security of tenure and housing finance Outline of presentation

3. Introduction Growth and capital Physical Human Social Growth and institutions Formal Informal Growth and actions Local knowledge and institutions are crucial Do not invent the wheel twice Gradual changes Formal Institutional Improvements Broad actions Growth, urbanization and housing Housing and housing finance

4. Formal mortgages Volatile macro economy Lack of (long term) capital Lack of financial infrastructure Legal system, housing market reg., credit bureau, valuations Credit risk Collaterals and income How to include households with low and moderate income? How to create a better infrastructure, secured ledning environment, adequate funding sources, legal systems, regulations, long term funding, insurance products etc.?

5. Formal Mortgages, % of GDP

6. Savings Most common financial method Prepare housholds for regular payments Increase sustainability Larger autonomy for the savers Saving clubs, mobile bankers Connected with micro finance loan and community loan High levels of inflation discourages savings How to formalize savings without high cost for the households?

7. Interest rates, MF

8. Community loans/savings Loans for groups Promotes social development and increases social capital, Reaches the (well organized) poor Infrastructure, land, housing Growing in importance How to scale them up? How to increase their political impact? How to connect with formal solutions, private actors?

9. Remittances Immigrants and foreign workers invest in their home countries Huge amounts, significant part of GDP Little political impact Seldom used as income and collateral How to create more/better data? How to include them into the formal systems?

10. Remittances, % of GDP, 2007

11. Guarantees May correct for market failures Allocate risks Link formal and formal markets Demonstration projects Use carefully, must give incentive to responsible behaviour

12. Land governance and housing finance Property rights and introduction of titling processes Pros and cons Security of tenure – gradual process If tenure is informal, security may depend on length, size of occupation, community strength, support from NGOs etc. Tenure upgrading can be linked with housing loans Innovative tenure and innovative loans Provision of temporary occupation rights /leases, long term leases and connect with finance Simplified registration that can be upgraded Strategic planning, planning standards according to poor households Ex: Registration/taxation in Ghana

13. Land administration chain

14. Land administration chain BKN, the National Housing Credit Guarantee Board and Lantmäteriet - the Swedish mapping, cadastral and land registration authority Launched at a seminar in Stockholm in June 2008 Improving Slum conditions through Innovative Financing. (by FIG ,UN-HABITAT, Lantmäteriet and BKN) Educational program Lantmäteriet discusses and presents issues concerning good land governance, registration, GIS etc BKN focus on housing finance in informal markets. We are particularly interested in the role of guarantees and how guarantees may work to connect informal and formal markets.

15. Conclusion Build social, human and physical capital Build and develop institutions Link formal and informal institutions (ex. Fin.) Gradual and broad changes Local initiatives/actions are crucial Cooperation and inspiration

16. Remittances, billion US dollar 2008