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Rebuilding Haiti: Creating a mortgage system for homes
What is not lacking is demand. About 500,000 people like Vellette are still without homes of their own following the earthquake. Most are holed up in flimsy tent-like shelters vulnerable to heavy wind and stormy weather.
The biggest international effort so far to create a mortgage market is a US$47 million package backed by former U.S. Presidents Bill Clinton and George W. Bush. It would give Haiti’s private banks long-term liquidity at low, fixed interest rates so they can finance home repair loans, regular mortgages and micro-mortgages for 10,000 to 15,000 families.
The Clinton Bush Haiti Fund contributed US$3 million to the plan and the World Bank’s Haiti Reconstruction Fund approved a grant of US$10 million. The U.S. government’s Overseas Private Investment Corporation (OPIC), which works with the private sector on development projects, has pledged US$34 million, though the project is still awaiting approval by OPIC’s board of directors.
“We were particularly attracted by this initiative because it targets the economically active poor,” said Gary Edson, CEO of the Clinton Bush Haiti Fund, in a telephone interview. “We found that this market had not been served.”
Haitian President Michel Martelly (pictured), has launched his own housing program. Dubbed Kay Pa’m — Haitian Creole for “my own house”, it aims to provide mortgages to first-time homeowners who belong to Haiti’s middle class, the approximately 10 percent of the population who have steady work.
“We focused on people who have jobs and can pay their debt,” said Jean Philippe Vixamar, board chairman for the state-run National Bank of Credit, which created the project.
That still won’t include most Haitians. The unemployment rate is estimated at around 70 percent, though many of those have sporadic, low-paying jobs, such as the shoe shiners and street merchants on the broken sidewalks.
Most banks aren’t interested in such clients, so when most Haitians need credit, they turn to friends and family. But those networks can rarely provide the kind of loans needed to finance a home.
