1 South Asia Housing Forum (SAHF), a commendable initiative Jan 27-28, 2010 Delhi, India Abdul Qadeer Fitrat Governor Da Afghan Bank The Central Bank of Afghanistan

2 South Asia: a regional scenario South Asia Region represents one out of every four persons on the planet. South Asia Region represents one out of every four persons on the planet. The region has one out of two poor on the planet and 14% of South Asians have no home or live in inadequate housing such as urban slums or squatter settlements. The region has one out of two poor on the planet and 14% of South Asians have no home or live in inadequate housing such as urban slums or squatter settlements. Region is among the lowest in terms of Mortgage Debt to GDP ratio. Region is among the lowest in terms of Mortgage Debt to GDP ratio. Housing market in the region is relatively much underdeveloped as compared to other socio- economic sectors Housing market in the region is relatively much underdeveloped as compared to other socio- economic sectors The region is faced with a massive backlog of housing. Only India is facing a shortage of 24.7 mn in urban housing, most of which is in low –income category The region is faced with a massive backlog of housing. Only India is facing a shortage of 24.7 mn in urban housing, most of which is in low –income category Afghanistan is facing even a much bigger challenge in terms of low-income affordable housing, since a sizeable portion of housing stock have been destroyed in major metropolitans like Kabul. An estimated US$ 2.5 billion are needed to rehabilitate or reconstruct partially or totally destroyed housing. Afghanistan is facing even a much bigger challenge in terms of low-income affordable housing, since a sizeable portion of housing stock have been destroyed in major metropolitans like Kabul. An estimated US$ 2.5 billion are needed to rehabilitate or reconstruct partially or totally destroyed housing. Affordable housing for Low Income Groups is a major challenge. More than a Billion people in the region are candidates for Low Income Housing. Affordable housing for Low Income Groups is a major challenge. More than a Billion people in the region are candidates for Low Income Housing. Micro-Housing Supply and Micro- Housing Finance is another challenge, where much more is needed to be done. Micro-Housing Supply and Micro- Housing Finance is another challenge, where much more is needed to be done. Persons per Room Density in India& Pakistan is 3.5 vs. 1.1 in EU and 0.5 in USA Persons per Room Density in India& Pakistan is 3.5 vs. 1.1 in EU and 0.5 in USA It is very important to first assess the state of housing finance in the regional countries. Then to explore inter-regional technical expertise to meet the challenge.

3 Socio-economic Parameters Countries Population (mn) Population (mn) Housing Backlog Housing Backlog (mn units) Pop Growth Rate Pop Growth Rate(%) Urban Pop Urban Pop (%age of total) House Hold House Hold(mn) India1, Pakistan Bangladesh Afghanistan241.5N/AN/AN/A Sri Lanka "International Housing Finance Program 2008." Wharton - University of Pennsylvania. June-July 2008.

4 South Asia: Population Trends Total Population (mn) 2007 Population Growth % Urban Population (mn) 2007 Urban Population % of Total Urbanization Growth % GDP Growth Rate % India1, Pakistan Sri Lanka Afghanistan24NA % Thailand Indonesia Bangladesh Source: World Development Indicators 2009

5 Socio-Economic Impact of Housing Housing sector has important forward and backward linkages in terms of socio-economic development. Housing sector has important forward and backward linkages in terms of socio-economic development. Social: Supply of affordable housing has major impact in terms of improving living conditions, health, education and human development. Social: Supply of affordable housing has major impact in terms of improving living conditions, health, education and human development. Economic: Development of Housing and Real Estate Sector has a direct impact on GDP growth, growth of Financial Sector, Construction Material Industry, Employment, Capital Market as well as Insurance Industry. Economic: Development of Housing and Real Estate Sector has a direct impact on GDP growth, growth of Financial Sector, Construction Material Industry, Employment, Capital Market as well as Insurance Industry.

6 Challenges Reliable data on housing (Housing Information Systems-HIS) Reliable data on housing (Housing Information Systems-HIS) Issues of Titling, Land Registry, and Registration Costs. Issues of Titling, Land Registry, and Registration Costs. Need for computerization and automation of title registration and title transfer (World Bank has been providing financial and technical assistance for the purpose- LRIS Projects) Need for computerization and automation of title registration and title transfer (World Bank has been providing financial and technical assistance for the purpose- LRIS Projects) Supply of Serviced land and evolution of Land Banking Supply of Serviced land and evolution of Land Banking Development of new low income habitat- success stories and model projects under Public-Private Partnership (PPP) to be shared Development of new low income habitat- success stories and model projects under Public-Private Partnership (PPP) to be shared Role of Large Scale Builders, Standardized Contracts, and transparent PPP models Role of Large Scale Builders, Standardized Contracts, and transparent PPP models Issues of Affordability: Affordable Housing and Affordable Mortgage Issues of Affordability: Affordable Housing and Affordable Mortgage Access to Finance Access to Finance Faith Based Housing Finance (Sharia-Compatible Housing Finance) Faith Based Housing Finance (Sharia-Compatible Housing Finance)

7 Role of Central Bankers as Regulator Regulatory Reforms, Prudential Regulations on Housing (Risk weightage, Mortgage to Advances Ratio, Provisioning Rules. Etc) Regulatory Reforms, Prudential Regulations on Housing (Risk weightage, Mortgage to Advances Ratio, Provisioning Rules. Etc) Need for Capacity Building in Mortgage Finance Need for Capacity Building in Mortgage Finance Development of Mortgage laws and Foreclosure laws Development of Mortgage laws and Foreclosure laws Regulations to promote Long Term funding instruments, like MBS, REITS, SUKUK, etc Regulations to promote Long Term funding instruments, like MBS, REITS, SUKUK, etc The Central banks to proactively monitor the Real Estate market and growth of Asset/Liability book in the balance Sheets of Financial Institutions The Central banks to proactively monitor the Real Estate market and growth of Asset/Liability book in the balance Sheets of Financial Institutions

8 Liquidity issues of Mortgage Industry The mortgage industry, more so the FIs in the private sector are facing long term liquidity crunch, and new challenges in raising LT Funds at competitive rates The mortgage industry, more so the FIs in the private sector are facing long term liquidity crunch, and new challenges in raising LT Funds at competitive rates Facilitate Long Term Funding and financing Instruments Facilitate Long Term Funding and financing Instruments Mortgage Liquidity facility Institutions Mortgage Liquidity facility Institutions World Bank/IFCs role in promotion of Mortgage Refinance Institutions World Bank/IFCs role in promotion of Mortgage Refinance Institutions

9 SAHF: a commendable initiative the region has a major portion of the global issues on Affordable Housing and Housing finance the region has a major portion of the global issues on Affordable Housing and Housing finance different initiatives and programs have been experienced in different countries of the region different initiatives and programs have been experienced in different countries of the region issues are common, answers will have to be customized issues are common, answers will have to be customized SAHF will provide a Virtual (e-based) and physical ( seminars/workshops) platforms to share experiences and wisdom SAHF will provide a Virtual (e-based) and physical ( seminars/workshops) platforms to share experiences and wisdom SAHF is also exploring avenues of cooperation between SAHF Affordable Housing Mission and UNESCAP Pro-Poor Housing initiative SAHF is also exploring avenues of cooperation between SAHF Affordable Housing Mission and UNESCAP Pro-Poor Housing initiative

10 Expectations from SAHF Conference Share their experience and approaches to new issues and emerging challenges to housing and housing finance Share their experience and approaches to new issues and emerging challenges to housing and housing finance Presentations will hopefully generate lively discussions and a better understanding of issues and possible answers Presentations will hopefully generate lively discussions and a better understanding of issues and possible answers Will provide a networking forum to all the stake holders for an active cooperation between the regional countries Will provide a networking forum to all the stake holders for an active cooperation between the regional countries

11 Special thanks to The World Bank Group for providing moral and intellectual support in establishing SAHF.9 more so of Ms Tatiana, Mr. Olivier and Ms Mehnaz) The World Bank Group for providing moral and intellectual support in establishing SAHF.9 more so of Ms Tatiana, Mr. Olivier and Ms Mehnaz) The idea was born in May, 2009 at Jakarta( thanks to Mr. Zaigham Rizvi), and today in Jan 2010, it is a forward looking reality (thanks to NHB-India, Mr. Verma and his team) The idea was born in May, 2009 at Jakarta( thanks to Mr. Zaigham Rizvi), and today in Jan 2010, it is a forward looking reality (thanks to NHB-India, Mr. Verma and his team) Special thanks to World Bank Institute for supporting the Delhi Conference( Mr. Andre and his colleagues) Special thanks to World Bank Institute for supporting the Delhi Conference( Mr. Andre and his colleagues) Thanks to all supporters and sponsors of the Conference Thanks to all supporters and sponsors of the Conference Special thanks to the NHB IT Team who have developed this e-Portal of SAHF Special thanks to the NHB IT Team who have developed this e-Portal of SAHF Last but not the least, to my colleagues at the Advisory Board of SAHF Last but not the least, to my colleagues at the Advisory Board of SAHF