IFC
Financial Institutions Group (FIG)

Housing FinanceIndustry Context
Affordable housing remains a pressing global issue,
especially in emerging markets and developing countries
where more than 1.26 billion people lack adequate housing.
Approximately 210 million additional housing units will haveto be built by 2030 to accommodate growing populations
and urbanization patterns. This represents a $16 trillion
financing gap.
By leveraging the expertise of the World Bank Group, IFC
aims to enable and deepen the market across the housing
value chain. For more than 30 years, IFC has supported theexpansion of residential mortgage lending and affordable
housing in emerging markets.
To catalyze the development of sound and widely

Examples of IFC’s Strategic Interventions
CATALYZING THE MORTGAGE SECTOR IN WEST AFRICA
West Africa is facing massive housing deficits, estimatedat about 11.5 million housing units. Caisse Régionale
de Refinancement Hypothécaire de l’UEMOA (CRRH), aregional mortgage refinancing player and key engine ofsupport for affordable housing in the WAEMU zone is theonly mortgage refinancing company in WAEMU. To date,
CRHH has issued eight bonds, providing approximately$400 million equivalent in refinancing to 37 banks spread
across 7 countries, enabling 8,807 mortgages with anaverage size of $30,890. Since 2017, IFC has supported
CRHH with an investment of $2 million equivalent inequity shares and a combined $18 million in two longdated local currency bonds in CRHH.

accessible housing finance markets, IFC:GREENING AFFORDABLE HOUSING IN INDIA• Invests in financial institutions and mobilizes capital

India’s Ministry of Housing and Urban Affair’s demandbased assessment has pegged India’s affordable housing
shortfall at approximately 10 million houses (as of 2022).
India’s urbanization rate, currently at 34%, is expected tosurpass 50% by 2050 (UN-Habitat, 2017), creating demandfor 25 million additional affordable units and driving
investment opportunities of $620 billion by 2030.

across the globe, serving as a reliable source of longterm funding• Works with funds to support construction of green
residential buildings• Provides upstream and advisory to strengthen financial
institutions’ capacity in housing financemarket level through various initiatives including:In the past 8 years, IFC has invested more than $1.9 billion,
and has a current portfolio of $1.2 billion with 10 clients, ofwhich 35% is green housing. Expected outcomes include
increasingly affordable homeownership for low-income
populations, increasing green affordable units, andreducing GHG emissions.

• Supporting financial institutions and Mortgage

RISK SHARING FACILITY IN CHILE• Works with regulatory agencies to improve the enabling
environment
IFC’s approach to Housing Finance is to engage atRefinancing Companies (MRCs) as vehicles for capital
markets refinancing while working with policy makers tofast-track reforms, the banking sector, and housingdevelopers• Investment in Covered Bonds and Mortgage-backed
Securities which unlock local currency capital• Loans to mortgage real estate investment trusts tradedon the Stock Exchange, which provide liquidity formortgage originators• Developing innovative Housing Finance products tailored
for women, low-income, unbanked, and underserved
clients

While Chile’s mortgage market is relatively advanced
compared to LAC counterparts, it remains relatively small
when compared to advanced economies. The country
faces a significant housing deficit, with subpar livingconditions. Gender disaggregated data reveals a housing
finance gender gap, despite women’s better repayment
histories. To address these disparities, IFC provided an
unfunded risk sharing guarantee for up to $400 million to
Santander Chile enabling the bank to originate housing
loans for women.

Project Examples

PILLARGLOBAL RENT-TO-OWN
Global Rent-to-Own (RtO) is an innovative pathway toPillar is a global housing advisory platform that supports

home ownership with a “go-to-market” framework which

continuous improvement of developers’ businesscan be applied at the country level and includes a financial

proficiency and helps them design affordable and sociallyand operating model, architecture/ stakeholder mapping,sustainable communities rooted in an understanding oflegal and regulatory requirements, market conditions andlocal conditions. Pillar helps financial institutions identify

target market segment. The team identified partners inand build bankable projects through two advisory tools:

multiple countries with an estimated total $250 million
investment over the next three years. Three projects haveso far been identified in Mexico, Turkey and Senegal. RtO isa compelling example of a replicable approach in a priority
area such as affordable housing.

• Pillar Business Assessment: Assesses developers’ overallproficiency through analysis across four key dimensions:
Financial Management, Business Management, ProjectOperations, and Organization Management.
• Pillar Social Sustainability Assessment: Assesses aspecific project’s social sustainability across the four

EDGE AND GREENING OF SELF-CONSTRUCTEDBUILDINGS

phases of development: Project Definition, Planning andDesign, Construction, and Operations.

IFC created EDGE (Excellence in Design for Greater
Efficiencies) to respond to the need for a measurable andcredible solution to prove the business case for building

HOUSING MICROFINANCE
IFC since 2012 has provided an innovative Housing

green and to unlock financial investment. IFC has now
piloted the first ever green building rating and certification
process for self-constructed units.

Microfinance (HMF) lending product to support
incremental self-help construction that is more affordable,greener, and more resilient against natural disasters. In

The initiative has i) built technical and process

the Kyrgyz Republic, more than 57 thousand households

capabilities for financial institutions; ii) developed thewith average incomes below $400 received an HMF

value proposition, business case, and business model

loan through IFC partners (as of July 2022). Nearly 300

for affordable housing finance companies; iii) designed

thousand tons of CO2 was saved as the houses becamea process for earmarking the green affordable housing

more energy efficient. Moreover, financial institutions saw

portfolio for climate-tagged investments for IFC; iv) built

an improvement in their performance as the rate of non-a successful and standard model for replication in otherperforming HMF loans was 3-4 times lower than that ofgeographies.

other loans in their portfolios.

IFC’s committed investmentsin the housing sector(as of end-June 2024)$4.4billion across 84 active projects
Central & Eastern Europe$300m committed
4 projects

Middle East, Central Asia & Turkey$171m committed
4 projects

East Asia & Paciﬁc$638m committed
10 projectsSouth Asia
$1.4b committed
26 projects

Latin America & Caribbean$1.2b committed
19 projects
Sub Saharan Africa$750m committed
21 projects

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www.ifc.org | www.ifc.org/HousingFinance(May 2024)