Tag Archives: UN Habitat

Photo Report: AHI at UN-Habitat’s World Urban Forum (WUF)

By: Molly McGowan

Last week, my colleague, AHI Global Associate Anya Brickman Raredon, and I traveled to Medellin, Colombia, to participate in UN Habitat’s World Urban Forum (WUF). It was a spectacular conference in a spectacular city.

UN Habitat's World Urban Forum

UN Habitat’s World Urban Forum

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Sign in Santo Domingo (a neighborhood of Medellin now served by the recently-constructed metro cable) – “Please take care of the garden and the trees. Put garbage in the trash bins. Thank you. The environment of the park and this lookout depends on you. This is our air. Thank you for taking care of it.”

AHI’s primary reason for being in Medellin was to participate in two events with partners we are working with in Haiti: Cordaid and USAID.

Cordaidlogo USAIDlogo

In the first, Anya spoke about our housing ecosystem approach and a model for housing delivery in Haiti as a part of a panel organized and moderated by Cordaid’s Inge Bouwmans and Marloe Dresens. Anya spoke alongside Margriet Nieuwenhuis (Director, Cordaid Urban Matters), Gerald Jean-Francois (Program Manager, Cordaid Urban Matters Haiti), and Raoul Pierre-Louis (CASEC of Turgeau, Haiti).

1)Preparing for the Cordaid panel. From left to right: Gerald Jean-Francois, Raoul Pierre-Louis, Anya Brickman Raredon, Margriet Nieuwenhuis, Marloe Dresens, Inge Bouwmans

Preparing for the Cordaid panel. From left to right: Gerald Jean-Francois, Raoul Pierre-Louis, Anya Brickman Raredon, Margriet Nieuwenhuis, Marloe Dresens, Inge Bouwmans

HaitiGoingBeyondCharity

See the full presentation here.

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AHI Global Associate Anya Brickman Raredon speaking on AHI’s ecosystem approach

In the second, we presented a poster (see it here) during USAID’s event on Haiti, where our friends Chris Ward (USAID), Anna Konotchick (UC-Berkeley), Rose-May Guignard (CIAT), Odnell David (UCLBP), and Kate Crawford (University College London’s Centre for Urban Sustainability and Resilience) were speaking.

Chris Ward (USAID) introduces the USAID panel on Haiti. From left to right: Odnell David, Anna Konotchick, Rose-May Guignard, Chris Ward, Kate Crawford

Chris Ward (USAID) introduces the USAID panel on Haiti. From left to right: Odnell David, Anna Konotchick, Rose-May Guignard, Chris Ward, Kate Crawford

Building Permanence: Self-Recovery after Disaster

Building Permanence: Self-Recovery after Disaster

With our presentations finished on Tuesday, we were able to spend the rest of the conference taking it all in, meeting interesting people, and learning about the fantastic work taking place on housing all over the world.

Adriana Navarro-Sertich (UNOPS) speaking on how to build more than a roof

Adriana Navarro-Sertich (UNOPS) speaking on how to build more than a roof

Claudio Acioly moderating a panel on slum upgrading programs in Brazil, South Africa, and Kenya

Claudio Acioly moderating a panel on slum upgrading programs in Brazil, South Africa, and Kenya

AHI Senior Advisor Deidre Schmidt and MIT Professor Reinhard Goethert speaking on land tenure at a panel organized by Loeb Fellow Matt Nohn

AHI Senior Advisor Deidre Schmidt and MIT Professor Reinhard Goethert speaking on land tenure at a panel organized by Loeb Fellow Matt Nohn

PCI’s project manager presenting on Barrio Mio – a 24-month collaboration between PCI and USAID’s Office of Foreign Disaster Assistance designed to transform a high-risk urban neighborhood in Guatemala into a resilient, safe, and productive community

PCI’s Ernesto Paiz presenting on Barrio Mio – a 24-month collaboration between PCI and USAID’s Office of Foreign Disaster Assistance designed to transform a high-risk urban neighborhood in Guatemala into a resilient, safe, and productive community

The Barrio Mio team. From left to right: Local team leader, Kathy Vilnrotter (Enclude), Jim DiFrancesca (PCI)

The Barrio Mio team. From left to right: Jose Murguia (PCI), Kathy Vilnrotter (Enclude), Jim DiFrancesca (PCI)

JP/HRO’s Lora Vicariot and Benjamin Krause talking about the learning, growth, and adaptation necessary to design and implement an effective emergency relief and reconstruction program

JP/HRO’s Lora Vicariot and Benjamin Krause talking about the learning, growth, and adaptation necessary to design and implement an effective emergency relief and reconstruction program

Mortgage emulators: pro-poor housing finance innovations (Part 2)

by Matt Nohn, AHI Senior Advisor

 

[Continued from last week’s Part 1.]

 

To answer these questions—and to solve the 5-dimensional puzzle—MHT has put in place the following mechanisms:

 

1.      To screen the loanee’s probability of repayment

 

As this has been done innumerous times I will not describe it here in detail. Notably, MHT also requires two approved guarantors/co-signers.

 

india_loan_application

Loan application form listing identification details, income, wealth status, etc

 

2.      To screen the security of the collateral (part 1),
proofing tenure of the land (and home), as in case of a mortgage.

 

MHT basically checks the history of land, comparing official record in the land registry with informal papers documenting the (never officially recorded) transfer of land. In the best case, the informal transfer document is acknowledged through a lawyer (even if not recorded in the land registry) while the land registry shows the name of the informal seller. In that case, it is proven that the land was not invaded and it will be virtually impossible for the formal owner (who’s name is registered in the land cadaster) to repossess the property.

 

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The sales contract (Kabja Rasid) proofing the informal transaction

 

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7-12-Form documenting the formal possession of land (by the formal owner, not the loanee!)

 

Sometimes MHT needs to go back in time to check if the ancestors of the present formal owner have sold the land to an ancestor of today’s informal owner. If the informal owner is paying property tax (another important indicator for who is responsible for the land) and if landownership is not disputed, MHT considers the land to be at least in adverse possession of the informal owner. In that case, MHT and the credit cooperatives would give green light, as it is virtually impossible that the informal owner would get evicted from the land. (Adverse possession is recognized by India’s civil code.)

 

india_prop_tax_bill

Property tax bill

 

On the other hand, if the land were under dispute MHT and the cooperatives would not permit the loan. The decision is marginal if the land was not disputed but formal landownership had changed through multiple channels over time or the informal owner could provide little evidence for peacefully obtaining the land.

 

3.      To screen the security of the collateral (part 2),
eliminating potential conflict with the urban planning regime

 

In order to check whether or not the collateral is potentially in conflict with future development, MHT checks the provisions of urban development plans and town planning schemes. Key information obtained is whether the collateral is affected by future infrastructure development (particularly roads and road widening) and which land use is established. Especially if the determined use is “residential” or “residential with a social purpose” it is virtually impossible that the collateral is negatively affected.

 

town_planning_scheme

Provisions of the Town Planning Scheme

 

However, the fact that many town planning schemes are not yet finally sanctioned is complicating the approach because their content could still change. MHT considers the likelihood of such an event by checking how far the town planning scheme process has advanced. As soon as the scheme has a final draft status, it is considered very safe. Changes negatively affecting people living in the area are hardly possible.

 

town_planning_scheme_status

Status of the Town Planning Scheme (TPS): the more the process has progressed, the higher the

security of provided information

 

4.      To establish contractual proceedings that, in case of default, allow the lender to take possession of the collateral—even without mortgage.

 

Finally, this is the crucial part in order to “emulate” the mortgage. MHT and the credit cooperatives let the loanee sign an advanced power of possession. The document is signed with presence of and certified by a notary. The effect of the advanced power of attorney is simple: basically it states that the lender is allowed to sign any transfer on behalf of the loanee. Thus, in case of default, the lender is able to transfer the property to herself. (Of course, this document is signed before loan closure and before construction starts.)

 

india_advanced_pot

Advanced Power of Attorney

 

5.      To screen the security of the collateral (part 3),
proofing the physical qualities of the collateral

 

To check the structural safety of the house (and to also proof that the money is invested into the collateral) MHT sends an engineer on site to document the construction progress in at least 4 steps. Each step is documented and only after successful completion the respective installment of the loan is disbursed.

 

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technical_checks

Technical checks are documented with photos and brief reports by the responsible engineer. Here the report at the plinth level and photos at the slab level

 

Finally, after all checks have been passed successfully MHT and the credit cooperatives place a hypothecation board at the new home.

 

mht_housing_recipients

Just as lenders in the formal market do, MHT and the credit cooperatives use a hypothecation tablet in order to demonstrate their achievements and to advertise their product.

 

Then the loanee and her family can move into their new home.

 

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Shakuntalaben and her family in front of their new home financed by Surat Mahila Cooperative Mandali’s innovative loan

 

 

MHT’s achievements are significant. We estimate that the market niche (if “niche” is still appropriate) that could be served with such mortgage emulators may be of over 1 trillion Indian rupees (or approximately USD 200 billion). However, to serve that market lenders need to understand the intricacies of the land management and urban planning regimes. MHT originated as a technical, rather than a financial organization and, therefore, displays of this knowledge.

 

The intent of our study is to share this knowledge and enable others to copy MHT’s approach. You can read the full story here. If you need anything else please do not hesitate to contact us at AHI and/or MHT.

 

Matt Nohn, AHI Senior Advisor

February 11, 2013

Mortgage emulators: pro-poor housing finance innovations (Part 1)

by Matt Nohn, AHI Senior Advisor


Last summer I came back to India to revisit the Mahila SEWA Housing Trust (MHT; see
www.sewahousing.org). I know MHT well, as I worked with them in Ahmedabad, one of India’s fastest growing cities, for three years. Still today I serve as an advisor to MHT, too. AHI and MHT are closely collaborating since around 2007, as AHI supports the larger SEWA network, to which MHT belongs, in launching a market-driven housing microfinance company that is co-governed by the urban poor.

 

MHT is a Mission-Entrepreneurial Entity (MEEs) founded by the Self-Employed Women Association (SEWA; see www.sewa.org). The support of poor, informally and self-employed women (and their families) to access improved housing and neighborhoods is its mission. MHT’s poor members are usually self- or informally employed—such as street vending day laborers and home-based piece-rate artisans and industrial outworkers. Particularly for the later group, rarely leaving their settlements and producing at home, housing improvements are of the highest relevance and closely related to income improvements (e.g. through access to electricity, subsequent use of more productive machines) and expenditure reductions (e.g. through better health but also reduced fees for access to subsidized or fairly priced public services).

 

In this regard, through slum upgrading in the scope of Ahmedabad’s Parivartan Slum Networking Program, MHT became a big player in low-income housing in India MHT implements various schemes for improving service delivery and basic infrastructure in low-income areas, especially informal ones; see e.g. https://www.box.com/s/6ui7j8zvfr8lc4lp5co8. Since inception in Ahmedabad, these poverty reduction programs have been replicated across multiple Indian states, often with the participation of MHT. For example, at present MHT works with DFID in order to replicate sanitation and solid waste service projects in Bihar, one of India’s poorest states. Since 2007 MHT, SEWA Bank and AHI collaborate in launching SEWA Grih Rin, an emerging housing finance company. To bridge the time until Grih Rin’s launch MHT works with two credit and savings cooperatives that also deliver housing finance. This work allows MHT to test new products and to innovate the housing finance space. One of these innovative products is what we call Home Asset Loan Finance at AHI: or, simply, HALF as it squares half way in-between typical microcredit and traditional mortgage finance.

 

No margin, no mission

Launching HALF for semi-formal properties is challenging because it requires to do all of multiple things right: failure to do so may even lead to extermination of the lender—as housing is a capital intensive product, and the lender is “nothing but” a group of poor women:

 

1.      To screen the loanee’s probability of repayment,
as in case of any typical microfinance product

 

These proceedings are basically identical to any microenterprise or consumer loan.

 

2.      To screen the security of the collateral (part 1),
proofing tenure of the land (and home), as in case of a mortgage.

 

However, unlike in case of a mortgage this can be hard in case of HALF, as the underlying asset’s title is neither illegal/informal nor fully legal/formal but is placed somewhere in-between. On this regard, UN-Habitat speaks of the continuum of land rights, which also reflects in the latest Report of the Special Rapporteur on adequate housing Raquel Rolnik to the UN Human Rights Council. Thus, how to establish the likelihood of eviction and loss of collateral?

 

land_rights_continuum

The continuum of land rights (Source: UN-Habitat (2012). Handling Land, Innovative Tools for Land Governance and Secure Tenure. Accessible online at: http://www.unhabitat.org/pmss/getElectronicVersion.aspx?nr=3318&alt=1)

 

3.      To screen the security of the collateral (part 2),
eliminating potential conflict with the urban planning regime

 

Even if land tenure is safe, the house may still be destroyed if it was in conflict with future development—such as this road in Wenling, Zhejiang province, China.

 

china_highway_house

Would you give them a loan? Will they hold out? (Source: Reuters)

 

china_highway_house_demolition

Well, they did not—even though they thought the compensation wasn’t worth it. (Source: Reuters)

 

4.      To establish contractual proceedings that, in case of default, allow the lender to take possession of the collateral—even without mortgage.

 

 Thus, how do you make sure you get the house in case you need to take the defaulting borrower to court (in absence of mortgage foreclosure, which would allow you to just take the house even without the court.)

 

5.      To screen the security of the collateral (part 3),
proofing the physical qualities of the collateral


Even if land tenure and construction site are safe, the lender still needs to ensure that the structural quality of the house is safe enough to e.g. withstand a disaster. Also the lender needs to ensure that the money is really invested in the construction of the tangible collateral.

 

demo_1 demo_2

Are you sure it is strong enough? (Gujarat Earthquake 2001; picture credit: CASA)

 

[To be continued in next week’s Part 2.]