Kampala, November 28, 2007 —
IFC, a member of the World Bank Group, today launched an initiative to boost residential mortgage lending and provide affordable housing for Ugandans. The Uganda Mortgage Finance Program will provide partial credit guarantees and advisory services to help the country’s banks increase their home loans. It will also work to improve Uganda’s regulatory environment for mortgages.
IFC Executive Vice President and CEO Lars Thunell launched the program today during a two-day visit to Uganda. Thunell signed agreements for IFC to advise Stanbic Bank, Orient Bank, and DFCU on developing and implementing standard mortgage products, origination and servicing policies, and industry guidelines.
“Developing the Ugandan housing sector is vital for the growth of the country’s financial markets and economy,” said Thunell. “IFC is committed to improving housing finance in Uganda through innovative programs that create opportunities for more people to own their own homes.”
Stanbic Bank, Orient Bank, and DFCU will use the innovative IFC Mortgage Toolkit, which provides guidance on introducing new mortgage products, helping lenders establish standard loan documents and implement key steps for originating, processing, closing, and servicing mortgage loans. The toolkit is already being used by several banks in Ghana, where IFC launched a similar program in August.
IFC will also partially guarantee loans made by Uganda’s National Social Security Fund to the three participating banks to help them increase mortgage lending. While details of the credit guarantee have yet to be finalized, NSSF expects to lend the banks a combined total of $40 million, with IFC guaranteeing $10 million of that amount. Other banks are expected to be added later.
IFC will also work with key stakeholders to address legal and regulatory constraints to the growth of mortgage lending and investing in Uganda. These efforts will include implementing tax incentives to promote home ownership, helping increase securitization of mortgages in the secondary market, and raising standards that banks use to appraise the value of homes.
About IFC
IFC, a member of the World Bank Group, fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing private capital in local and international financial markets, and providing advisory and risk mitigation services to businesses and governments. IFC’s vision is that poor people have the opportunity to escape poverty and improve their lives. In FY07, IFC committed $8.2 billion and mobilized an additional $3.9 billion through loan participations and structured finance for 299 investments in 69 developing countries. IFC also provided advisory services in 97 countries. For more information, visit
www.ifc.org
.
