Kabul, April, 1, 2007—IFC and the
World Bank, have organized a workshop in Afghanistan to present the findings
of a study on the country’s housing sector. The study outlines the environment
in which financial institutions operate and assesses both mortgage and
nonmortgage (noncollateralized) housing finance.
The workshop established an action plan to improve access to housing finance
and promote the sector over the next 12 to 24 months. The study was presented
to a wide group of stakeholders, including government officials, governors
of the central bank, and CEOs of commercial banks and microfinance institutions.
On the basis of the findings, workshop participants identified a list of
short- and medium-term interventions and set up a task force to champion
specific reforms. The proposed interventions include the introduction of
a guarantee facility, a developer-finance program, a mortgage law, and
improvements to the foreclosure law, land titling, and registration systems
that include reduction in registration costs. There were specific recommendations
to introduce microfinance loans for home renovation, construction, and
purchase. Topic discussed included the need for market research, provision
of extensive advisory services and longer-term funding, and facilitation
of partnerships between banks and microfinance institutions.
“Housing is a critical issue in Afghanistan’s urban development, and
the destruction caused by years of wars has made it a huge priority for
us,” said Eng. M. Yousaf Pashtun, Afghanistan’s Minister of Urban Development.
Syed Farhan Fasihuddin, IFC’s Program Manager for housing finance in the
Middle East and North Africa, added, “While it is important to start removing
obstacles that prevent a mortgage-enabling environment, it is critical
to meet the immediate and growing housing needs of Afghanis through noncollateralized
microfinance loans.”
Afghanistan is facing unprecedented population growth and rapid urbanization,
which is widening the gap in demand and supply of housing in urban areas
like Kabul and Jalalabad. Increasing access to housing finance is key to
developing a large scale housing market and addressing housing supply shortages.
This project, which evolved from an agreement signed by IFC and Afghanistan’s
Ministry of Urban Development, is implemented by IFC Advisory Services
in the Middle East and North Africa—PEP-MENA—and the International Development
Association.
About IFC
IFC, the private sector arm of the World Bank Group, promotes open and
competitive markets in developing countries. IFC supports sustainable
private sector companies and other partners in generating productive jobs
and delivering basic services, so that people have opportunities to escape
poverty and improve their lives. Through FY06, IFC Financial Products has
committed more than $56 billion in funding for private sector investments
and mobilized an additional $25 billion in syndications for 3,531 companies
in 140 developing countries. IFC Advisory Services and donor partners have
provided more than $1 billion in program support to build small enterprises,
to accelerate private participation in infrastructure, to improve the business
enabling environment, to increase access to finance, and to strengthen
environmental and social sustainability. For more information, please visit
www.ifc.org.
About IFC PEP-MENA
IFC PEP-MENA is a multidonor facility for advisory services that supports
private sector development across the Middle East and North Africa. It
focuses on improving the business enabling environment, strengthening financial
markets, supporting SME development, and promoting privatization and public-private
partnerships. From its inception through FY06, IFC PEP-MENA has committed
more than $20 million in advisory projects. Its activities are funded jointly
by IFC and the following donors: Canada, France, the Islamic Development
Bank, Japan, Kuwait, the Netherlands, the United Kingdom, and the United
States.
About IDA
The International Development Association is the part of the World Bank
that helps the world’s poorest countries. IDA aims to reduce poverty by
providing interest-free loans and grants for programs that boost economic
growth, reduce inequalities, and improve people’s living conditions. For
more information, visit www.worldbank.org.
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