WASHINGTON, D.C., May 31 -- The International Finance Corporation (IFC) has signed an agreement to invest up to US$400,000 in the Eastern Caribbean Home Mortgage Bank (ECHMB), a secondary mortgage bank for the eight member territories of the Eastern Caribbean Central Bank (Anguilla, Antigua and Barbuda, Dominica, Grenada, Montserrat, St. Kitts and Nevis, St. Lucia, and St. Vincent and The Grenadines).
"By creating the first regional financial instrument and the region's first secondary debt market, the project will help promote the development of local capital markets and regional financial integration," commented Mr. Helmut Paul, Director of IFC's Latin America and Caribbean Department. "It should also help make mortgage financing more available and affordable."
The ECHMB will purchase new and existing residential mortgages from primary mortgage lenders and issue general obligation bonds backed by its mortgage portfolio to institutional and retail investors in member territories. The bonds will be tax exempt in all member territories and represent the first alternative to public-sector securities for the region's investors.
The project will also help establish standardized commercial criteria for home mortgages throughout the region, which will help strengthen mortgage lending practices, promote greater competition and efficiency among mortgage lenders, and help reduce mortgage financing costs.
The ECHMB has been established as an independent, privately managed financial institution closely modeled on the Home Mortgage Bank of Trinidad & Tobago, a successful secondary mortgage bank that IFC helped create in 1986.
IFC is a member of the World Bank Group and is the leading multilateral source of equity and loan financing for private sector projects in developing counties.
