1. Lending to Small and Growing Businesses (SGBs) Introduction
Rural Housing Microfinance Survey
FMFB Afghanistan
June 12-16, 2011
Kabul, Afghanistan

2. Presentation Outline

3. Project background:
Rather than limiting housing finance to mortgage products, housing microfinance is an important product for the Afghan market. Housing microfinance allows financial institutions to move down market and provide responsible low-income housing finance products. Afghanistan is an environment in need of affordable housing development and housing finance, with rapidly growing major urban centers and large percentages of the urban populations residing in substandard or overcrowded housing conditions. There is also high demand for rural populations who live in substandard housing conditions.
FMFB has offered HMF since 2008 and their current portfolio has grown to more than $6 million in loans outstanding, serving more than 4,500 clients in 13 provinces of the country. While the portfolio is currently exclusively located in urban areas, FMFB has a strong understanding of the rural market and lends 27% of the organization’s portfolio in rural areas. FMFB is experienced in the HMF field and knowledgeable about the markets based on the organizational experience and previous consulting work conducted by Banyan Global and SBI on the market and HMF product. This assignment will build off the existing portfolio and experience to guide FMFB in expanding into the rural housing microfinance market.

4. Project Overview

5. ShoreBank Team:
Lauser Moser Count
Zaigham M.Rizvi
Anna Foggel

6. FMFB Team:
1.Chris Underwood C.E.O. 2. Muslim Ul-Haq Former C.E.O. 3. Greg Long Communication and External Relations Manager-AKAM 4. Karim Haidar Head of Microfinance 5. Michael Okwemba Housing Microfinance Product Consultant 6. Homayoun Niksear Marketing Manager

7. AMMC Team:
Abdul Qayoum Wafa  (Project Manager)                     Arbab Daud        (Technical support)                     Najibullah Alokozay (Assistant project Manager)               

8. Project Deliverables Survey design and field test
Meetings and discussions were held with the team of AMMC and FMFB, both on line and at FMFB Office in Kabul. Team Lead had visited Kabul from … to……
Pilot Survey :
Review of the Pilot Survey
Survey implementation and data collection
Dates;
Provinces Covered:
Districts Covered :
Respondents Covered: Three Districts per Province, 40 Respondents/District, Total Respondents;
Data analysis and identification of key challenges
Survey implementation and data collection
Data analysis and identification of key challenges

9. Survey design and field test
Project inception meeting intended to introduce FMFB and SBI team, to generate interest, enthusiasm and support for the project, establish overall project objectives, and gather initial documentation and information
Detailed work plan outlining project timeline, activities and deliverables
Initial desk study research and rapid market diagnostic
Draft survey and survey pilot, conducted by SBI and AMMC
Final survey, fully incorporating FMFB feedback

10. Survey implementation and data collection
Implementation plan, including sampling strategy and data collection plan
Full implementation of survey in five rural branches, or as determined by SBI-FMFB team (and advised by AMMC)
Raw data collation in excel spreadsheet

11. Data analysis and identification of key challenges
Once the survey is completed and the data is collated and cleaned, the SBI team will turn rapidly to analyzing the data. The data analysis will support and complement the findings from the first stage of the assignment, including the desk research and FMFB staff interviews. The compilation of information will inform the final report and SBI’s recommendations.

12. Survey implementation and data collection
Draft final report incorporating survey data analysis, market assessment, key challenges, and recommendations
Workshop and presentation with FMFB
Final report incorporating FMFB’s comments and workshop feedback

13. Features of FMFB Current HMF Products and Features
The current HIL product features include the following:
Product Type: Housing Improvement Product
Loan Tenure: 6-24 months
Loan size: $200- $4000 (under review)
Collateral requirements: land title deed,
3rd party guarantor
and own household assets.
Loan to value requirement: 150% of the face value of the amount.
Administration fee: 1% of the loan amount at disbursement
Service charge: 25% per annum on a reducing balance
Frequency of payment: Monthly
Form of loan disbursement: 2 trenches ( under review)
§  Loan purpose: Housing Improvement (as house repairs, connection to basic amenities,
plastering, painting, digging a well, roofing,
window/doors purchase/fitting,
additional room, septic tank, retrofitting etc)
Maximum Loan size: 70% of the estimated total project cost.
Borrower’s contribution: 30% of project cost and can only be in the form of cash,
materials or labor (sweat equity).
Savings: 5% of the face value of the loan every month (optional)

14. Proposed Product- A Product Type: Loan Tenure: …….months
Loan size: $ (under review)
Collateral requirements: land title deed,
3rd party guarantor and own household assets.
Loan to value requirement: 150% of the face value of the amount.
Administration fee: 1% of the loan amount at disbursement
Service charge: 25% per annum on a reducing balance
Frequency of payment: Monthly
Form of loan disbursement: 2 trenches ( under review)
Loan purpose: Housing Improvement (as house repairs, connection to basic amenities,
plastering, painting, digging a well, roofing, window/doors purchase/fitting,
additional room, septic tank, retrofitting etc)
Maximum Loan size: 70% of the estimated total project cost.
Borrower’s contribution: 30% of project cost and can only be in the form of cash,
materials or labor (sweat equity).
Savings: 5% of the face value of the loan every month (optional)

15. Proposed Product-B Product Type: Loan Tenure: …….months
Loan size: $ (under review)
Collateral requirements: land title deed,
3rd party guarantor and own household assets.
Loan to value requirement: 150% of the face value of the amount.
Administration fee: 1% of the loan amount at disbursement
Service charge: 25% per annum on a reducing balance
Frequency of payment: Monthly
Form of loan disbursement: 2 trenches ( under review)
Loan purpose: Housing Improvement (as house repairs, connection to basic amenities,
plastering, painting, digging a well, roofing, window/doors purchase/fitting,
additional room, septic tank, retrofitting etc)
Maximum Loan size: 70% of the estimated total project cost.
Borrower’s contribution: 30% of project cost and can only be in the form of cash,
materials or labor (sweat equity).
Savings: 5% of the face value of the loan every month (optional)

16. Proposed Product-C Product Type: Loan Tenure: …….months
Loan size: $ (under review)
Collateral requirements: land title deed,
3rd party guarantor and own household assets.
Loan to value requirement: 150% of the face value of the amount.
Administration fee: 1% of the loan amount at disbursement
Service charge: 25% per annum on a reducing balance
Frequency of payment: Monthly
Form of loan disbursement: 2 trenches ( under review)
Loan purpose: Housing Improvement (as house repairs, connection to basic amenities,
plastering, painting, digging a well, roofing, window/doors purchase/fitting,
additional room, septic tank, retrofitting etc)
Maximum Loan size: 70% of the estimated total project cost.
Borrower’s contribution: 30% of project cost and can only be in the form of cash,
materials or labor (sweat equity).
Savings: 5% of the face value of the loan every month (optional)

17. Project team
Lauren Moser Counts, Vice President, LAC & Housing Finance
Zaigham Rizvi, Project Team Leader
Anna Fogel, Housing Microfinance Expert and Project Support