Key services DIG offers in the field of housing microfinance include: market assessments; product design; systems and tools development training; design of guarantee facilities; and advising regulators and policy makers.
As the capital markets in developing countries grow, the demand for mortgages is increasing. DIG works with governments, regulatory authorities and the financial sector to build their capacities to meet this demand, and to determine the feasibility of mortgage finance systems for the poor.
Housing finance can be an effective tool for economic recovery in post-emergency contexts because housing construction stimulates the economy beyond the sector, generating employment and the purchase of goods and materials. DIG works in post-disaster and post-conflict settings to provide the poor with access to credit, thereby alleviating the severity of their circumstances.
Policy & Regulatory Environment
The vast majority of the world’s poor still have little access to housing finance. Yet governments worldwide typically struggle with adjusting policy and regulatory environments to correct this situation. DIG has helped define best practices in housing finance and provides governments and regulators with technical assistance to foster more enabling financial sector environments throughout the world.
Municipal Finance & Cost Recovery
DIG experts work with local and national authorities to assess the feasibility of municipal bond floatation and to determine how municipal finance initiatives can be leveraged to support development objectives, such as slum improvement.
Small Infrastructure Finance
Small and community-based infrastructure financing differs significantly from mainstream microfinance and more formal municipal finance schemes. DIG works with local stakeholders to design innovative and appropriate financing mechanisms for small and community-based infrastructure.
Nearly all governments intervene in housing finance markets, primarily for social and political reasons. In general, DIG believes that subsidies should be specific, measurable, achievable, relevant, and time phased (SMART). Good MFIs should arguably be experts at assessing the financial circumstances of households in developing countries to determine if they are eligible for state subsidies. DIG provides financial institutions with technical assistance to understand how government subsidies work, identify the eligible clientele, and offer the services needed to access this assistance.
Partnerships between public agencies or local governments and private entities leverage mutual skills and interests. DIG works with stakeholders to find common ground and to structure viable financial arrangements.