Microfinance Approach to Housing: The Community Mortgage Program
The paper states that the three major problems facing Community Mortgage Program (CMP) in Philippines are:
- Low collection rate;
- National Home Mortgage Finance Corporation's (NHMFC's) slow processing of papers;
- Funding requirements.
Using the case study approach, the paper provides an assessment of the CMP as a government-housing program for households belonging to the lowest income deciles. Furthermore, it estimates a demand function for low-income households and assesses the feasibility of linking the CMP to the formal sector (e.g. banking sector). It posits that the present set-up, where the government provides low-income households with loans for housing while the banks grant higher income households with housing loans, remains the optimal one. The author also recommends institutional changes to make the CMP a more efficient and effective housing program.
The paper concludes that amongst all housing programs of the government, the CMP boasts of having reached the most number of beneficiaries in a relatively short span of time and at the lowest cost.