A 9.5 billion Colombian pesos guarantee will enable Credifamilia to get credit to finance 16,000 homes‪

The Inter-American Development Bank (IDB) will contribute to reduce the housing shortage in the most backward sectors of Colombia through a credit guarantee of 9.5 billion Colombian pesos (some $5.38 million) granted to Credifamilia Compañía de Financiamiento S.A., the first regulated financial institution in Colombia,which specializes in mortgage loans for social housing. 

‪This guarantee will enable Credifamilia to access a 9 billion pesos loan to finance its mortgage loan portfolio and at the same time attract additional financing from the market. It is estimated that these funds—at a term of five years, which is impossible to secure on the Colombian market—would allow Credifamilia, in a five-year term, to grant more than 16,000 mortgages in late 2016 for a value of some $283 million.

The project seeks to address the coordination deficiencies that affect the housing sector in Colombia. Credifamilia is the first financial institution specializing in affordable housing that offers a complete financial package to its customers. Historically, banks have had limited interest in financing this segment due to the high administration costs and risk perceptions. 

‪Credifamilia will cater to this sector efficiently through a network of sales offices in partnership with major homebuilders in Colombia and by using modern IT tools to handle the loans; incorporating micro-credit methodologies in rating independent workers to improve risk management; rapidly reaching scale through partnerships with housing construction companies; and leveraging public subsidies to attract lower-income sectors.‪

The guarantee is being provided by Opportunities for the Majority, the IDB private sector window that fosters sustainable business models that are commercially viable and replicable, seeking to offer quality products and services to improve lives at the base of the pyramid in Latin America and the Caribbean.