Beijing, China, February 28, 2002—The
International Finance Corporation has signed an agreement with Advantage
Services Holding Limited (ASHL) to invest in Advantage China Holdings Limited
(ACHL). ACHL will establish joint venture companies in China to provide
home mortgage origination, borrower credit analysis, and contract underwriting
services to Chinese banks.
Established in late 1999, ASHL has been providing mortgage services to
financial institutions in Hong Kong through its wholly-owned subsidiary,
Advantage Mortgage Services Company (HK), and plans to expand its services
into mainland China through ACHL. Beijing Advantage, the first joint
venture company, is expected to begin operations in the first half of 2002.
IFC’s investment represents a 24.5 percent direct ownership in ACHL. Other
shareholders include ASHL and Netherlands Nederlanse Finanierings-Maatschappij
Voor Ontwikkelingslanden N.V. (FMO).
As one of the first mortgage service companies for China, the project is
expected to encourage the establishment of other market players. ACHL
will help banks strengthen their credit assessment capabilities in residential
mortgage lending and expand their lending in a financially prudent way,
thus supporting the growth of residential housing and construction. IFC’s
presence will provide the company with the credibility that it needs to
establish relationships with Chinese banks and gain access to financing.
IFC has also been instrumental in helping to mobilize additional
financing support in the form of equity capital from FMO.
Javed Hamid, IFC’s Director for East Asia and the Pacific, said, “IFC
is very pleased to support the development of mortgage servicing in China
where private home ownership is expanding rapidly and lenders need to manage
their exposures as they increase their mortgage lending portfolios. This
new institution should help alleviate credit concerns in China where the
housing sector is growing steadily, increase homeownership rates, and strengthen
families and communities.”
Mr. Hamid added that, as a significant economic driver, the development
of a well-functioning housing sector is an integral part of IFC’s support
for emerging markets. In FY 2001, IFC committed over US$100 million
for projects that reinforce links between the housing market and the financial
and capital markets.
ACHL’s Founder and Chief Executive Officer, Mr. Ivan Ko, said, “IFC is
well known in the banking industry and adds credibility to this project.
We look forward to continued support from IFC and FMO as ACHL implements
its rollout plan and accesses the capital markets to develops mortgage
services in China’s major cities.”
IFC’s mission is to promote sustainable private sector investment in developing
countries, helping to reduce poverty and improve people’s lives. IFC
finances private sector investments in the developing world, mobilizes
capital in the international financial markets, and provides technical
assistance and advice to governments and businesses. Since its founding
in 1956 through the close of the last fiscal year on June 30, 2001, IFC
committed more than $31 billion of its own funds and arranged $20 billion
in syndications for 2,636 companies in 140 developing countries. IFC’s
committed portfolio at the end of FY01 was $14.3 billion.