Low-income Housing Finance
CODI Experience
CODI in brief



Founded in 2000
A public organization: having a government
institution status with flexibility in organization
management
Main objective: strengthening poor community
organizations
Current Activities






Citywide slum upgrading ( “Baan Mankong”)
Poverty Alleviation (Supporting communities in
savings, credits and loans and community development
plan, etc.)
Community Welfare
Assisting in setting up of Community Organization
Councils throughout the country
Promoting natural resource management and
sustainable agriculture
Solving land and housing disputes in rural areas
CODI strategies





To play supporting role in community
development process
People, not CODI, are the owners and key
actors of the process
To coordinate with govt. agencies, NGOs, other
civic groups
To promote community-based savings
To use finance as a tool for development
Network
Network
SAVINGS - CREDIT
LAND - HOUSING
WELFARE
COMMUNITY
ENTERPRISE
CODI
ENVIRONMENT
Network
Academics
Community
Development
Committee
Supported
Agencies
Others
NGOs
Local
Authorities
OTHERS


CODI provides financial support by lending its capital
funds to community organizations.
At present, CODI credit facilities comprise four types
of loans as follows;
- Loans for housing and development
- Loans for community enterprises/income
generation
- Loans for holistic development
- Short-term revolving funds
Income Generation Activities
Baan Mankong Housing Program
Citywide slum upgrading




a breakthrough in solving slums on a citywide scale
Comprehensive approach in dealing with problems of
land tenure, infrastructure, environment, construction
and financing
Combination of self support, government subsidy and
private cooperation
Lead to amendments in rules and laws which are
obstacles to housing solutions for the poor
BMK demonstrates strong PPP
partnership



P- Poor people/communities as key actors in
identifying problems, developing plans to resolve
problems and implementing those plans themselves
P- Public; government, CODI, local authorities, etc.
Government as subsidy provider: CODI as facilitator,
provider of long-term housing loan
P- Private sector; NGOs, professionals, educational
organizations etc. provide technical support
City-wide upgrading involving many possible city development actors and
find various secured housing solutions for all communities in the city
On-site
Upgrading
Community
Row-house
Community
Land-sharing&
reconstruction
Flat
Detach house
Municipality
City-widesurvey /
joint planning,
search forsolutions
together
Find various
solutions suitable
for all communities
in city
Reblocking &
readjustment
Flat
Other
dev.agencies
Resettlements่
Row-housing
Mixed approach
Baan Mankong Procrss

City-Wide Planning
Organize meetings of stakeholders
 Establish joint committee to oversee implementation
 Survey all communities to identify problems and
create holistic plan
 Develop housing, land tenure and policy plan for
whole city


Form savings groups



Mobilize local resources, strengthen local groups,
and build collective management skills
Set up community working team
Collect information about land, housing,
physical infrastructure, income, employment,
problems, and existing development initiatives




Conceptualize housing and development goals
regarding land tenure, upgrading scheme,
involvement of local authorities, NGOs, etc.
Formulate financing plan
Work with architecture and engineer on
developing housing designs and infrastructure
Submit detailed plan to BMK committee
Community Survey
all communities in districts and city
Community survey of all households
In the community and all communities in the city
carried out by community people
การ
Participatory planning process
Loan process

Loan approval
Screened by local and regional committees before
being sent to CODI
 Approved by BMK sub-committee comprising reps
from communities, CODI, NHA,GSB, GHB
 If loan amount exceeds THB50 mln.(~USD1.7),
approved by CODI board of directors


Loan disbursement

Loans are disbursed in tranches based on progress
of project
Progress of Baan Mankong
(up to March 2011)





Number of project approval
Number of cities
Number of communities
Number of families
Govt. subsidy (THB mln.)
882
278
1,552
91,822
4,706
Baan Mankong Chantaburi
Before and after
Baan Mankong:
Financial Aspect
Providing Flexible Financial Support
for City-wide Upgrading by Communities
Grant
1)
Upgrading of infrastructure and social
facilities
2)
Local management cost
3)
Support for exchange visits, capacity
building, seminars, coordinator
Members
Loans
From CODI
Revolving Fund
Interest 4 %
Communities
Members
Members
Government
Subsidy
Banks
Source of Financing
Three components of BMK financing:
 Local communities’ own savings (10% of
project cost)
 Government subsidy-THB80,000(~USD2,667)
per family
 Housing loan from CODI
Government subsidy

Subsidy is given to community not to individual
family
Allocation of THB80,000 (~USD2,667)
Infrastructure development
55%
- Financial support
30%
- Project management (incl.
15%
meetings, training, exchange visits, etc.)
-
CODI loan






A collective loan to community organization,
not to individual household
Collective land tenure
Loan maturity is 15 years and is payable in 180
equal monthly installments
Interest rate is fixed at 4% p.a.
Maximum loan amount per household is THB
300,000 (~USD10,000)
CODI finances up to 90% of the project cost.

Loan Security: 1) Land and buildings are
mortgaged with CODI
2) Guarantee agreement signed
by chairman, committee and all members of the
community organization.
Re-lending to members


A loan from CODI is on-lent to individual
household with a margin of 2-3% added to e
interest cost.
The margin is set aside for the purpose of loan
administration, community welfare and serves as
a cushion for loan repayment in case any
member fails to meet his or her obligation in any
particular month.
Loan management by community
Interest 4%
CODI
Community organization
Subgroup management
•Subgroup daily savings
subgroup
•Loan collection
•Group guarantee
•Help members who cannot pay
subgroup
subgroup
subgroup
Community Cooperatives
on lends to members
at 6-7 %. Margin for comm
development,
management and welfare
BMK Loan Performance (as of Mar.2011)
(Accumulated amt.)
 Approval
 Disbursement
 Repayment
 Outstanding
 NPLs
 Beneficiaries


No. communities
No. households
THB mn.(USDmn.)
4,464(149)
2,700 (90)
519 (17)
2,181 (73)
2.05%
1,119
25,866
Funding sources

Current funding sources for long-term housing
finance
CODI initial capital fund approx. THB 2,800 mln.
 Government budget (2009)
THB 3,000 mln.
 CODI-GHB Refinancing scheme THB 500 mln.

CODI-GHB Refinancing scheme



Total amount: THB 500 mln.
GHB agrees to refinance BMK loans from
CODI at the same interest rate and same terms
and conditions
CODI and GHB agrees on mechanism to
compensate GHB for interest rate differentials
Project assessment

Key success factors
Strong community leadership
 Flexible, affordable financing for the poor
 People process which suits poor community
livelihood


Barriers
Public land-use policies
 Certain rules and regulations
 Coordination among relevant agencies


Challenges
Future funding for the program
 Scarcity of affordable land
 Linkage between formal and informal financial
markets

New look of a slum in
Pitsanuloke province
Bangbua Community
before upgrading
Bangbua community
during completion
Thank You