SETTING THE CONTEXT: THAILAND MORE THAN SHELTER: HOUSING AS AN INSTRUMENT OF ECONOMIC AND SOCIAL DEVELOPMENT A Harvard Joint Center for Housing Studies International Housing Conference Supported by the Rockefeller Foundation May 9 14, 2005 Bellagio Study and Conference Center Bellagio (Como), Italy
ABSTRACT The Thai economy and its real estate markets experienced several boom and bust cycles during the past several decades. The current Thai government views the real estate sector as a major driver of economic stability and growth. During the past four years, it has enacted numerous new policies to stimulate the economy and at the same time address the housing requirements of the less privileged. This paper will discuss Thai housing and the housing finance market's development, including government and private sector roles. It will also present case studies of successful policy-driven housing and housing finance programs that played a significant part in helping Thailand's economy recover from the 1997 economic crisis and which are expected to be key drivers of sustainable future economic development. HISTORICAL CONTEXT Housing Development Housing has been major policy issue for every Thai government in the past three decades because of population growth and rapid urbanization. Thailand's population, which was 53.9 million in 1987, is now more than 65 million. Urban residents now total more than 20 million people or about 30 percent of the population. Rapid population growth and continuous urbanization have created numerous demands for housing over a wide range of income levels. Upper-middle and higher income-level housing needs are, however, currently well-serviced by the private sector. In 2004, private sector developers developed 66.7 percent of Thai housing. (Housing Units Launched See Appendix - Figure 1) Setting the Context: Thailand 1
Despite their housing-market dominance, private developers have largely avoided providing lower-income and lower-middle-income housing. In large urban areas such as Bangkok, various governments have implemented a wide range of policies to address the housing needs in urban slum and squatters' areas, as well as adequate housing for laborers who have migrated to urbanbased manufacturing and service industries. In addition, policy makers also must address the housing needs of a large informal sector that is still a significant part of the Thai economy. (Housing Units Launched - See Figure 1) The most recent published statistics indicate that in Bangkok alone more than 243,000 households lived in slums and squatters settlements, while another 250,000 households lived in similar circumstances in other parts of the country. (National Housing Authority) Currently, public and private organizations are cooperating to execute government mandated housing policies. Government and Private Sector Participation Prior to 1960, Thailand s few private developers produced homes for middle and upper-income purchasers. The Thai government itself had been building homes primarily for government employees since the 1940s through the Public Welfare Department. The Government Housing Bank, established in 1953, acted both as a developer and as a housing financing institution at the outset but relinquished its housing development role to the National Housing Authority (NHA) when this was established in 1973. The NHA was established to provide housing and financial assistance to low and middle-income people. It was the government's catalyst to the development of rental accommodations and affordable homes that could be purchased by low and middle-income citizens. It was also involved in upgrading slum and squatter housing environments. 2 Setting the Context: Thailand
During the past three decades, the NHA has continually been designated the government's focal point to provide better housing opportunities for low and lower-middle income purchasers. Today, many of its efforts are based on joint private and public developments. In 2004, the Thai housing market was relatively buoyant for middle and upper-middle incomelevel homes, with housing completions totalling about 56,000 units in greater Bangkok area alone. The market for this sector is expected to continue expanding with an economy that is still growing at about six percent per annum. Currently, the Thai government has initiated several joint private and public programs to address the needs of the urban poor and lower-income households. A brief synopses of two of these programs is shown below: 1. Baan Eur-Artorn Low-Cost Housing Program Low-cost housing development to enhance economic growth Target - 600,000 homes between 2003 and 2007 NHA to execute project Homes for lower-income people, including civil servants and government enterprise employees. Selling price to purchaser Bt390,000 per home ($US9,750) Government subsidy Bt80,000 ($US2,000) per home. Government Housing Bank to provide low-interest loans to buyers - limited NHA guarantees Slow Progress - difficulty delivering final product within designated costs 2. Baan Mankong - National Slum Upgrading Program Urban Poor Communities in Thailand - 2000 survey - 1.14 million households, 5.13 million people Squatters on public, private or temple lands Program to create secure tenure and provide basic infrastructure and improve housing in these settlements as a basic right on a nationwide scale Setting the Context: Thailand 3
Alternative to delivering new housing units by delivering comprehensive long-term solutions Linking development of secure housing with the larger and more comprehensive process of community development, encompassing economics, environment and public health Implementation and execution by community people and community networks with local development organization support (See Appendix for December 2004 project update) HOUSING FINANCE OVERVIEW THAILAND In 1953, the Thai government established the Government Housing Bank (GHB) with the special objective to provide housing finance. During the first 20 years, the GHB acted both as a housing finance institution as well as real estate developer. It's housing development role was supplanted by the National Housing Authority's creation in 1973. (for a more detailed description of he GHB go to the English section of www.reic.or.th) Although the Government Housing Bank has a 38 percent market share and is the largest single housing mortgage provider in Thailand, the 12 commercial banks, with their large deposit bases, together have a more than 50 percent market share. (See Table 1) 4 Setting the Context: Thailand
Table 1 : Key Features of Financial Institutions in Thailand (as of Sep 2004) Financial Institutions Commercial banks Government Housing Bank Government Saving Bank Finance companies Life insurance companies * Credit Foncier companies Export-Import Bank of Thailand Small Industries Finance Corporation Operatio n began in Total Assets * Total Deposits Total Credits Home Loans (Million Baht) (Million Baht) (Million Baht) (Million Baht) Home loans to Total Credits (%) 1888 7,728,481 5,710,833 5,072,716 516,456 10.18 1953 657,342 560,592 392,459 374,858 95.52 1949 469,200 284,182 314,375 94,803 30.16 1969 396,116 259,780 266,394 5,857 2.20 1929 290,049** 386,270 44,417 Na Na 1969 2,063 1,462 1,067 190 17.81 1993 56,025 NA 48,929 NA NA 1992 33,976 NA 25,251 NA NA Source : Bank of Thailand Note: *as of September 2004 ** as of Mar 2004 THB 40 = USD 1 Today, the Government Housing Bank services more than 900,000 home-owners with a widearray of fixed interest rate loans with amortization periods of up to 30 years and fixed interest rates up to five years. The GHB has also often been called to act as a catalyst for economic recovery. To jumpstart the economy after the 1997 economic crisis, the Thai government selected the then moribund housing industry's revival as a way to ignite the recovery and restore public sentiment and confidence. (See Case Study next page) The GHB was asked to play a critical role in the program's success. Setting the Context: Thailand 5
Case Study: Government Housing Bank - Government Pension Fund Launched in 2001 to jump-start crisis-ravaged economy Surplus of unsold homes Thai government officials and Government Pension Fund members given lower interest loans and lenient income qualification standards to buy homes Maximum loan amount 100 per cent of appraised value Low initial year monthly payments - graduated mortgage payments Huge success - 38,298 loan applicants By end of 2004, loans made to 25,311 applicants for new homes Program absorbed significant part of housing oversupply and revived the housing industry just as the economy began recovering With the Thai economy now growing consistently at a robust six percent per annum, government policy has embraced social as well as economic rationales for creating affordable housing for low and lower-middle-income households. It is supporting these policy measures by creating an environment that stimulates the demand and supply for housing. These measures include: 1. Ensuring low interest-rate environments 2. Developing a reliable Real Estate Information Center 3. Developing long-term transportation and urban planning strategies 4. Improving Consumer Protection laws for homebuyers 5. Developing an active secondary housing market A long -term Government Housing Bank goal is diversifying its current funding sources, 86 percent of which come from domestic deposits and promissory notes. During the past several 6 Setting the Context: Thailand
years, the GHB has issued FRCDs overseas and longer-term domestic bonds to develop a wider investor appetite for its debt. (See Appendix table) OTHER INNOVATIVE FINANCING PROGRAMS We have included a brief description of several innovative financing programs that Thailand has undertaken in the past several years. (See Appendix for additional descriptions.) Asset Capitalization Programs Introduced 2003 Main driver - Many lower-income individual's assets can't be used as collateral for loans Creating ways to capitalize these assets - Unleash lower-income individual's productivity by allowing them to borrow against these assets Rental rights used as collateral to apply for individual loans Allow more people to escape poverty trap Royal Navy - GHB Asset Capitalization Program Established in late 2003 Homes for government employees at Sattahip Royal Navy Base 492 two-story detached homes on land leased 30 years from Treasury Department The Treasury Department increased then-conventional one-year leases to 30 years as part of the Government s Asset Capitalization Program Home mortgages from Government Housing Bank Homes built under NHA auspices Individual monthly payments - approximately Bt1,500 ($US$ 35) per month Completion date - late 2005 Real Estate Information Center Established by Thai Cabinet Resolution August 17, 2004 Commenced operations September 1, 2004 Developed by Government Housing Bank under Ministry of Finance Supervision Setting the Context: Thailand 7
Objective to be a reliable and up-to-date center for real estate information in Thailand Currently has 30 employees (see web-site www.reic.or.th) BIG HOUSING CHALLENGES /ISSUES 1. The big housing challenge is building enough appropriate housing for the low and lowermiddle income urban poor in Thailand. The Baan Eur Ah-torn project has admirable objectives but it has been difficult achieving its stated production-goals. Even with zero land costs, developers in Thailand are finding it difficult to build houses profitably at the designated sale prices that translate into affordable monthly mortgage payments for the urban poor. Many private housing developers say that they avoid this market because margins are too thin. However, more economical alternative construction models are continuously being evaluated. Many Thai developers are now considering constructing mass-produced housing modules that can bring costs down to levels that can support the current sale price and yet still yield a reasonable developers' profit. 2. A second housing challenge is developing the infrastructure and legal mechanisms for converting slum and squatters rights into legal rights that satisfy all stakeholders. This will be a long-term Thai policy challenge. 3. The third housing challenging is further developing the secondary home-resale market. Some studies show that in Thailand, the number of existing homes for sale far exceeds new homes available for sale. Most existing home sales are by-owner or through so-called amateur brokers. Further developing the roles of professional real estate brokers and sales agents may be a critical way to stimulate secondary homes sales. Currently, no specific real estate broker or sales agent licensing law exists in Thailand and no government body exclusively regulates real estate brokers and agents. The real estate broker or 8 Setting the Context: Thailand
agent is generally viewed as a middle man or person who brings buyers and sellers together and negotiates the sale and/or purchase of real property with the expectation of compensation. Real estate industry officials have for years lobbied the government to enact Real Estate Broker and Sales Agent licensing laws, but their efforts so far have fallen on deaf ears. Another key way to increase secondary home sales is by reducing various income and transaction taxes on existing-home sales. Recently, the Minister of Finance announced a general policy to stimulate the secondary home-resale market. These policies are also intended to enhance the new home market, drive economic growth and improve the Thai general public s quality of life. BIG HOUSING FINANCE CHALLENGES 1. The big housing finance challenge in the long-term will be developing an infrastructure that will deliver all purchasers the optimal and most appropriate low-cost mortgages available. On the product side, it means continuous innovations and introducing new products that meet the changing needs of a fast-developing a young economy. Thailand s young population will be buying more and more homes during the next several decades. 2. Policy makers must ensure that the country has a financial and legal infrastructure that can rapidly adjust to the quick-changing needs of the financial institutions that deliver mortgages to the country's home buyers. Laws must be continuously up-dated to ensure that foreign capital can be readily invested in the funding of these institutions as they inevitably grow to service the mushrooming housing needs of a rapidly expanding young Thai population. Setting the Context: Thailand 9
KEY QUESTIONS TO BRING TO BELLAGIO 1. What other appropriate and viable solutions are there for delivering housing to low and lower-income households? 2. What alternative and appropriate long-term strategies are there for developing an optimal real estate financing environment for a fast-developing country, such as Thailand, in transition? 10 Setting the Context: Thailand
REFERENCES Asian Coalition for Housing Rights., 2004, Launched Real Estate Projects Report (November 2004)., [Online]. Available: www.achr.net/bmp_2.htm, [2005, Jan7] Asian Coalition for Housing Rights., 2004, Thailand's Challenge to Solve its Urban Poor Housing Problem, [Online]. Available: www.achr.net/bmp_3.htm, [2005, Jan7] Board Of Investment., (1994), BOI Housing situation and trend in year 1993-1994, [Online]. Avaliable: www.bot.or.th, [2005, Jan 7] Boonyabancha, S., 2004, Key Issues in Addressing Urban Poverty, UCDO, ACHR [Online]. Available: http://www.achr.net/networks.htm, [2005, Jan 14] Boonyabancha, S., June 2004 - Special issue on Baan Mankong [Online], Avaliable: http://www.codi.or.th/index.php?option=articles&task=viewarticle&artid=211, [2005, Jan 11] Kasikorn Research Center, 2004., Thai housing sector expected to maintain steady growth in 2005, [Online], Avaliable: http://www.kasikornresearch.com/index.wcgi [2005, Jan13] Kritayanavaj, B., (2002), Financing Affordable Homeownership in Thailand: Roles of the Government Housing Bank Since the Economic Crisis (1997-2002)., 2002 Journal of Housing Finance International, vol.17, iss.4, pp.15-26. Nakornthab, D. & Piamchok, S. & Kanchanasai, C., (2004), Bank lending, the housing market and risks: A test for financial fragility [Online], Available: (http://www.bot.or.th/bothomepage/databank/econdata/econfinance/tab88e.asp, [2005, Jan 5] Setting the Context: Thailand 11
National Association of Realtors,2004., Market Situation [Online], Available: http://www.realtor.orgintlprof.nsf/all/thailand?opendocument, [2005, Jan 11] National Economic and Social Development Board, 2004., Economic Performance in Q3/2004 and Outlook 2004-2005 [online], Available: http://www.nesdb.go.th, [2005,Jan 12] Northrup, J., 2004, Securitization and Secondary Markets [Online], Available: http://www.finir.org/securitization/s_home.htm,[2005,jan 14] Social Security Organisation., 2004, GHB-SSO Housing program, [Online], Avaliable: http://www.sso.or.th, [ 2005, Jan 10] Secondary Mortgage Corparation., 2004, Securitization, [Online], Avaliable: www.smcthailand.com, [2005, Jan 12] Thailand property market promising, 2004,[Unknown],[ Online], Available: http://www.thaipro.com/thailand_00/296_thailand-property.htm, [2005, Jan 10] The Community Organizations Development Institution., 2004, The CODI Update, ISSUE No.4, June 2004 The National Housing Authority., 2004, Baan Eur Ah-thorn project, [Online], Avaliable: http://www.nhanet.or.th/eng/aboutnha.html, [2005, Jan 5] 12 Setting the Context: Thailand
APPENDIX Table 1 : Key Features of Financial Institutions in Thailand (as of Sep 2004) Financial Institutions Operation began in Total Assets * Total Deposits Total Credits (Billion Baht) (Billion Baht) (Billion Baht) Home Loans (Billion Baht) Home loans to Total Credits (%) Commercial banks 1888 7,728 5,710 5,073 516 10.18 Government Housing Bank 1953 657 561 392 375 95.52 Government Saving Bank 1949 469 284 314 95 30.16 Finance companies 1969 396 260 266 6 2.20 Life insurance companies * 1929 290** 386 44 Na Na Credit Foncier companies 1969 2 1 1.2 17.81 Export-Import Bank of Thailand Small Industries Finance Corporation 1993 56 Na 49 Na Na 1992 34 Na 25 Na Na Source : Bank of Thailand Note: *as of September 2004 ** as of Mar 2004 THB 40 = USD 1 Table 2 : Residential Mortgage Loans/ All Types of Loans and the Thai Economy Items 1990 1995 2000 2002 2003 2004 Q3 Residential Mortgage Outstanding Loans (RL) - billion USD 138 574 689 764 914 1,001 GDP - billion USD 1,979 4,250 4,309 4,623 6,145 6,618 All Types of Loans - billion USD 2,184 4,186 4,917 5,433 5,939 6,501 RL : AL (%) 6.3 13.7 14.0 14.1 15.4 15.4 RL : GDP (%) 7.0 13.5 16.0 16.5 14.9 16.0 Source: Bank of Thailand Setting the Context: Thailand 13
Table 3: Baan Mankong: Progress update as of December 2004 Regions Number of Number Number Number Budget approving Provinces / cities of projects of communities of families (million Baht) Bangkok & Pheriphery 2/41 38 65 6,437 244.3 Center Region 6/6 19 29 1,740 55.5 Eastern Region Southern Region 7/8 25 29 1,740 41.7 Northern Region 8/8 18 43 2,679 45.5 Northeastern Region 8/12 28 32 2,407 82 Total 33/55 128 198 14,681 467 Source: the Community Organizations Development Institute (CODI) Table 4: Major GHB s Source of Funds at Year-end 2004 Amount: Million baht Item 2001 2002 2003 2004 1. Deposits & promissory notes 2. Domestic borrowing 3. Overseas borrowing Amount Borrowers (%) Amount Borrowers (%) Amount Borrows (%) Amount Borrows (%) 217,209.75 75.06 251,773.76 80.34 298,084.80 84.22 349,778.45 86.04 5,300.87 1.83 3,000.00 0.96 6,498.50 1.84 14,405.68 3.54 8,871.94 3.07 8,660.68 2.76 8,338.00 2.36 8,329.42 2.06 4. Bonds 58,000.00 20.04 50,000.00 15.94 41,000.00 11.58 34,000 8.36 Total 289,382.56 100.00 313,434.43 100.00 353,921.30 100.00 406,513.55 100.00 Source: The Government Housing Bank 14 Setting the Context: Thailand
Figure 1 : Proportion of Different Types of Residential Units Completed in 2004 200,000 180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 Volume : Units Share of Project-Built (%) 83.2 79.5 80.4 136,104 140,301 138,726 35,150 32,118 81.1 28,059 27,418 117,937 64.4 22,716 41,148 53.6 43.6 42.3 48 17,885 17,885 13,964 14,384 16,342 13,964 14,384 16,342 15,497 18,064 19,639 17,693 18,598 63.2 66.7 31,996 28,031 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 (Q3) Self-Built Project-Built Share of Project-Built 13,947 % 100 80 60 40 20 0 Source : The National Housing Authority; Compiled by Housing Information Division, Housing Information and Research Department, GHB Figure 2 : Residential Units Newly Launched in Bangkok and Periphery during 1992 2004 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 Volume : Units Growth Rate (%) -28.4 93.4 123.7-43.9-54.3-36.4-97.4 26.7 124.0 102.5 114.2 61.7 0.8 58,497 113,150 253,159 142,023 64,909 41,300 1,071 1,357 3,040 6,157 13,187 Condominium Town Houses Detached Houses 21,320 21,493 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Others Source: Bangkok District Officers and adjacent Provincial Offices; Compiled by Housing Information Division, Housing Information and Research Department, GHB Setting the Context: Thailand 15
Figure 3 : Outstanding Residential Mortgage Loans during 1988-2004 (Sep.) 2,000,000 1,600,000 1,200,000 800,000 400,000 0 Volume : Million Baht 42.9 39.3 36.8 Growth Rate (%) 72,421 100,905 1988 1989 138,002 1990 31.5 33.8 37.4 181,446 1991 242,764 1992 333,518 1993 33.1 29.6 443,899 1994 575,211 1995 23.2 708,633 1996 12.0-3.0 793,521 769,379 1997 1998-7.4-3.3-0.2 712,402 688,544 687,458 1999 2000 2001 11.1 763,665 2002 16.3 888,472 (%) 8.3 1,001,435 2004 (Q3) 2003 Commercial Bank GHB Finance GSB Others Growth Rate (%) 50.0 0.0-50.0-100.0 Sources: Government Houing Bank and Bank of Thailand; Compiled by Research and Foreign Affairs Division, Housing Information and Research Department, GHB Note: Home loans extended to individual borrowers, not including those extended to developers Other includes the National Housing Authority, credit foncier companies and insurance Figure 4: Market Shares of Outstanding Home Loans during 1988-2004 (Sep.) 80.0 60.0 40.0 20.0 0.0 Volume : Million Baht 67.68.7 69.0 68.9 68.1 67.7 67.1 16.7 17.2 8.0 8.5 7.3 8.1 7.4 8.4 9.2 9.4 8.8 10.1 10.1 3.6 3.6 3.1 3.2 3.9 2.9 5.1 7.0 1.8 1.6 1.4 0.9 6.9 3.3 4.0 3.3 2.6 2.4 5.0 2.5 2.4 2.2 2.7 2.7 0.6 4.4 0.6 2.4 1.8 1.9 0.8 * 0.8 0.6 0.5 0.4 0.3 0.2 0.2 0.3 0.7 2.8 2.9 1.8 1.6 1.4 0.9 0.6 0.6 16.717.2 18.8 19.4 20.2 20.4 21.0 Commercial Bank GHB Finance GSB Others 64.4 61.1 23.5 26.9 57.2 54.3 53.7 52.5 51.8 52.4 50.4 51.6 34.0 37.5 38.7 39.3 39.3 38.0 36.9 36.9 1988 1990 1992 1994 1996 1998 2000 2002 2004 (Q3) 1989 1991 1993 1995 1997 1999 2001 2003. Sources: The National Housing Authority, Credit Foncier companies and Insurance companies, The Government Savings Bank, Bank of Thailand; Compiled by Research and Foreign Affairs Division, Housing Information and Research Department, GHB 16 Setting the Context: Thailand
Figure 5 : New Residential Mortgage Loans during 1988-2004 (Sep.) 500,000 400,000 300,000 200,000 100,000 Volume : Million Baht Growth Rate (%) 73.1 34.0 31.9 42.2 32.8 41.9 10.5 6.5 6.8-15.9 209,811 223,408 241,172 202,720 147,829 111,346 78,306 53,736 59,368 40,110-48.8-38.0 103,733 64,301 69.3 46.5 3.4 164,851 112,611 108,886 112,611 80.0 296,661 % 213,281 100.0 0.0-100. -200. -300. 0 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2004 (Q3) 2003 Commercial Banks GHB Finance GSB Others Growth Rate (%) Sources: Bank of Thailand, The Government Housing Bank, The Government Saving Bank, and The National Housing Authority -400. Figure 6 : Market Shares of New Residential Mortgage Loans during 1988-2004 (Sep.) Volume : Million Baht Commercial Bank GHB Finance Others GSB 80.0 68.1 70.2 69.9 66.8 68.7 68.2 65.0 64.2 60.0 56.4 57.9 50.7 52.5 52.9 52.3 45.9 46.1 47.6 47.1 43.1 41.0 40.0 45.9 37.5 35.0 31.9 30.2 32.6 35.0 25.7 27.6 22.6 24.6 17.4 15.2 19.2 19.9 19.2 20.0 15.7 12.0 11.9 * 10.7 10.8 9.7 9.7 2.4 2.8 5.7 9.6 10.6 8.8 4.9 4.6 3.4 0.2 0.2 2.5 0.2 0.1 0.1 0.1 0.1 0.1 1.2 0.7 3.7 7.6 3.4 5.7 6.2 8.1 * 3.4 5.7 1.7 2.0 2.3 2.8 2.1 3.9 4.5 4.6 4.8 2.4 3.5 ** 2.4 2.8 3.4 2.8 4.8 1.7 0.6 1.3 1.0 2.0 2.4 ** 1.1 0.4 0.3 0.0 0.2 0.2 0.2 0.1 0.1 0.1 0.1 0.1 1.2 0.7 0.6 1.3 1.0 2.0 1.1 0.4 0.3 1988 1990 1992 1994 1996 1998 2000 2002 2004 (Q3) 1989 1991 1993 1995 1997 1999 2001 2003. Sources: Bank of Thailand, The Government Housing Bank, The Government Saving Bank, and The National Housing Authority, Credit Foncier Companies and Insurance Companies.; Complied by Housing Information Division, Housing Information and Research Department, GHB Setting the Context: Thailand 17
Figure 7 : Summary of housing units completed 1976-November 2004 Source: National Housing Authority Additional Innovative Financing Programs: 1. Micro-Finance Provider - Commercial Organization Development Institutions (CODI) Commercial Banks - urban poor don't qualify as customers CODI in Thailand - established 1992 Establish savings and credit schemes within individual communities Funding offered to community or people's organizations Allows community to control development process More importantly - strengthens bargaining position re: evictions, plans for land acquisition and control of family finances Has become collaborative development mechanism belonging entirely to communities within the same constituencies - developing group decisions CODI heavily involved in Baan Mankong 18 Setting the Context: Thailand
2. Hire-Purchase Programs Introduced 2004 Low-income individual with no prior credit records to purchase homes Occupies home under a hire purchase contract Payments of three to five years before house registered as sold After proving themselves as credit worthy - becomes purchasers and obtain mortgage 3. Securitization GHB to securitize part of its portfolio in 2005 Diversify funding and portfolio risk 4. Mortgage Default Insurance Insurance for risk associated with loans that exceed normal 75 to 80 per cent loan to value ratios Also will support values for future securitization portfolios 2002 World Bank-funded feasibility study April 2005 - Cooperating with Canada Mortgage Housing Corporation (CMHC) and International Finance Corporation (IFC) to develop action plan for establishing Mortgage Default Insurance for Thailand Partial Funding from CIDA Inc Setting the Context: Thailand 19