Colombia’s Credifamilia to extend US$240m in mortgage loans to low-income homebuyers: New Business Call to Action member’s loans will build 20,000 homes by 2020Aug 21, 2015
Bogota – Colombia’s Credifamilia has joined the Business Call to Action (BCtA) with a commitment to expand its successful low-income loan portfolio by extending US$240 million in home mortgages to at least 20,000 households in six urban areas which will house 78,000 people by 2020. The programme includes loans for 4,000 informal households who traditionally have had difficulty in accessing mortgage loans.
The company aims to address Colombia’s chronic housing shortage by developing home-loan programmes that target low-income families (40 percent which are headed by women), who have limited access to traditional banking services. Credifamilia anticipates revenues from its low-income mortgage portfolio will increase five-fold to US$30 million, its staff will double to 300 and more than 15,000 construction jobs will be created over the next five years. Credifamilia is the first Colombian company to join BCtA.
“For Colombians at the lowest end of the earning spectrum, a house is much more than a roof over their heads – it is a life project that improves the quality of life, economic prospects and education opportunities,” said Juan Sebastian Pardo-Lanzetta, Credifamilia’s founder and Chief Executive Officer. “From its founding, Credifamilia has pioneered a specialized, tailored approach to serving the mortgage needs of Colombia’s most vulnerable communities – providing an entry point to basic services and resources. We are honoured to have our work recognized by the Business Call to Action and to become a member of this prestigious organization.”
A shortage of housing is a chronic problem for Colombia, and as recently in 2015, mortgage lending comprised only 5.5 percent of its GDP – one of the lowest in Latin America. The problem is particularly acute in Bogota and the country’s other growing cities. It has led to overcrowding, high rent burdens, housing insecurity and deteriorating housing conditions. For this reason, Credifamilia focuses on Colombia’s urban areas and already expanded from its home office in Bogota to the country’s other largest cities – Medellin, Cali, Bucaramanga, Barranquilla and Pereira.
Credifamilia devotes 40 percent of its product portfolio to under-served households earning between one and two minimum wages (between US$8 and US$9 per day). Most of its loans are 15 years in term. The company has developed a number of dynamic methods for expanding its client base and mitigating risk. These include partnering with supermarkets and pharmacies as payment networks so clients can pay monthly installments near their homes, educating prospective home-buyers with information and technical advice on the home buying process, and individual home appraisals to ensure construction quality and fair market value. Credifamilia is also experimenting with an online sales channel, which has been popular among potential clients who feel intimidated by the traditional mortgage process.
In 2015 the Inter-American Development Bank’s Opportunities for the Majority division increased its approved funding line for Credifamilia to grow its low-income housing mortgage program which will support the institution’s loan origination in the upcoming years.
“Safe, affordable housing is critical for improving lives and livelihoods among low-income populations,” said Suba Sivakumaran, BCtA Programme Manager. “It provides important, life-changing conveniences such as running water and sanitation, improved access to education and stable employment – all components of the new Sustainable Development Goals. We are pleased to welcome Credifamilia as a member of the Business Call to Action and look forward to working with the company to ensure the success of this important initiative.”
About Business Call to action (BCtA)
The Business Call to Action (BCtA) aims to accelerate progress towards the Sustainable Development Goals (SDGs) by challenging companies to develop inclusive business models that offer the potential for both commercial success and development impact.
The Business Call to Action is a unique multilateral alliance between key donor governments including the Dutch Ministry of Foreign Affairs, Swedish International Development Cooperation Agency (Sida), UK Department for International Development (DFID), US Agency for International Development (USAID), and the Ministry of Foreign Affairs of the Government of Finland, and the United Nations Development Programme — which hosts the secretariat — in collaboration with leading global institutions, such as the United Nations Global Compact and the Inter-American Development Bank’s Opportunities for the Majority Initiative. For more information, please visit www.businesscalltoaction.org or on Twitter at @BCtAInitiative.
About Credifamilia: Credifamilia Compañía de Financiamiento S.A. is a regulated deposit taking financial institution focused on mortgage lending and savings products in urban areas in Colombia. The institution began operations upon obtaining a banking license from the Superintendencia Financiera de Colombia in 2011. During its first five years (2011-2015), Credifamilia supported 10,000 low-income homebuyer families with COP 350 billion (US$150 million) in mortgages in Bogota, Medellin, Cali, Bucaramanga, Barranquilla, and Pereira. More information on http://credifamilia.com.
BCtA/UNDP: Jeanne Finestone at email@example.com
Credifamilia: Otto Burgos at firstname.lastname@example.org