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Viet Nam,Soc Rep of
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LOAN: VIE 35497-01
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Housing Finance
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Location
Nationwide
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Sector
Finance /Housing Finance
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Initial Listing
12 September 2002
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Most Recent Update
19 February 2007
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Executing Agency(ies)
State Bank of Viet Nam
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- Missions
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| TA Fact-Finding |
Loan Fact-Finding |
Pre-Appraisal |
Appraisal |
| 10-23 Sep 2001 |
14-18 Oct 2002 |
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Loan Approval Date
20 December 2002
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Estimated Completion Date
December 2007
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- Cost and Financing Plan (in US$ million)
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| Source |
Foreign Cost |
Local Cost |
Total |
| Bank |
8.60 |
21.40 |
30.00 |
| Cofinancing |
0.00 |
6.40 |
6.40 |
| Borrower |
0.00 |
0.50 |
0.50 |
| Beneficiaries |
0.00 |
14.90 |
14.90 |
| Others |
0.00 |
0.00 |
0.00 |
| Project/Program Cost |
8.60 |
43.20 |
51.80 |
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OCR |
ADF |
Total |
| Loan Amount |
0.00 |
30.00 |
30.00 |
- Description
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The Project will support the establishment of a sustainable housing finance market in Viet Nam, which would ultimately mobilize substantial capital for housing finance and facilitate the long-term establishment of a strong mortgage-based collateral market to provide housing loans to all sections of the population. The loan will be used as a line of credit to the State Bank of Viet Nam for refinancing housing loans originated by participating financial institutions for urban low-income and poor households through a newly established housing finance facility (HFF).
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- Thematic Classification
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- Poverty Classification
- Poverty Intervention
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- Rationale
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The lack of access to long-term credit funds prevents financial institutions from providing long-term loans for housing. The lack of long-term loans makes access to housing finance unaffordable for almost 65% of the urban population. Short-term loans require high debt service repayment. To make housing loans affordable to ULIPHs, it is necessary to establish an efficient housing finance system that can provide long-term financing for purchase of housing and financing options for the poor to upgrade or build their own house.
- Objectives and Scope
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The Project will improve the quality of life of urban low income and poor households through improved housing. The specific objective is to promote the establishment of a sustainable housing finance market in Viet Nam accessible to low-income and poor urban households. The Project will provide approximately 27,500 housing finance loans for over 137,000 people, disbursed through participating financial institutions in the first round of lending. The Project will support the establishment of a housing finance facility that will become the apex institution for the housing finance sector, and the implementation of a policy and institutional reform action plan that will facilitate the development of the housing finance system.
The Project consists of three parts: (i) mortgage lending to urban low-income households (ULIPH); (ii) housing microfinance to urban poor households (UPH); and (iii) institutional strengthening and capacity building.
- Policy Dialogue
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Policy dialogue has centered on issues that will facilitate the development of a sustainable housing finance market: (i) a national housing finance orientation that integrates housing and finance policy concerns and objectives and establishes the framework for developing a sustainable housing finance market will be prepared and approved by the Government;(ii) consolidating and rationalizing mortgage legislation and preparing regulations for effective implementation, (iii) releasing organizations from the requirement to use or be influenced by frame prices when assessing the value of land use rights certificate; (iv) continuing the policy reform agenda of the Government; (v) preparing the basis and assessing options for the long-term expansion of the housing finance system.
- Environment Category:
C
- Environment Impact and Mitigation
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Not required.
- Social Aspects and Remedies
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Particular groups of urban poor households with stable income could especially benefit from the Project including resettlement households associated with infrastructure development, projects, canal and shanty area households designated for rehabilitation, and housing projects for selected government and major employer worker groups. Resettlement projects have the advantage that land and infrastructure service costs for resettlement housing are generally included in the project or contributed by the relevant people's committee from their own funds. Some resettlement projects have social survey inputs, community consultation, and savings credit schemes to prepare households for relocation.
- Benefits and Beneficiaries
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The beneficiaries will be urban low income and poor households (ULIPHs) who are willing to take loans from participating financial institutions for purchasing, constructing, or improving their houses, and have the capacity to repay the subloan proceeds by installments. The Project will benefit more than 137,000 urban low-income and poor persons including more than 43,000 urban poor. ULIPHs will improve their houses with the available affordable long-term funding. It will reduce their vulnerability to natural disasters by providing a safer space live, increase the residential and household stability due to the possession of a valuable asset, provide an alternative source of income in emergencies when the house is used as collateral to obtain additional credit, and reduce rent costs.
- Public Consultation
- Arranged by Borrower, Bank and TA Consultants
- Date for Consultation : During implementation of the PPTA and Appraisal Mission
- Groups Consulted : Local community groups, NGOs, people's committees.
- Beneficiary Participation in Formulation
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Stakeholders were consulted during the implementation of the PPTA and Appraisal Mission.
- Beneficiary Participation in Implementation
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The loan delivery mechanism for smaller own-build and house improvement loans will be implemented through CFI-managed credit schemes administered with assistance of people's committees, local community groups, and NGOs. The role of the NGOs will be particularly important in implementing the housing microfinance component and will enhance the sustainability of group-based long-term lending schemes.
- Consulting Services
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A total of 38 person-months of international and 26 person-months domestic consulting services will support capacity building and project implementation.
- Procurement
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There will be minor procurement of goods.
- Contacts
- Bank
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- Executing Agency
- State Bank of Viet Nam
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Contact Person
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Mr. Duong Quoc Anh, Project Director
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Tel. No.
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(844)9343483
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Fax. No.
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(844)8241097
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E-mail
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icpmu-quocanh@hn.vnn.vn
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