FINANCING SUPPORT OF HOUSING CONSTRUCTION IN RURAL AREAS AND DEVELOPMENT OF MORTGAGE CREDITING SYSTEM IN UZBEKISTAN 1
The purpose of housing construction in rural area is the improvement of rural appearance and living standards in rural area, creation of modern civil engineering, social and industrial infrastructure in rural area, creation of jobs and drawing near of rural living standards to the urban standards. 2
Availability of population s demand for housing in rural area: There are about 30,0 mln. people living in Uzbekistan. There are 11,8 rural settlements with 16,8 mln. population, that means around 3,4 mln. families (at a rate of 5 person in a family). Approximately 1,5 mln. families need improvement of living conditions. 3
Stages of development of the Program on housing construction in rural areas: 2009 was declared by the President of the Republic of Uzbekistan as «The year of development and improvement of rural areas» and the Program on housing construction on basis of standard designs in rural areas has been developed. The Program aims improvement of rural appearance and living standards of rural populations. 2009-2011 Crediting by Qishloq Qurilish Bank at the expense of purpose funds of housing construction on basis of standard designs in rural areas in all regions of the country. 2010 2011 Negotiations between the Government of Uzbekistan and Asian Development Bank (ADB) on involvement of this financial institute into the participation in financing of housing construction in rural areas. 29 July 2011 signing of Framework Agreement between the Republic of Uzbekistan and ADB, foreseeing a multi-tranche mechanism of financing of the Program of housing construction in rural areas for 2012-2015. 16 February 2012 signing of Loan Agreement between the Republic of Uzbekistan and ADB on payment of first tranche of Loan. 2013 год signing of Loan Agreement between the Republic of Uzbekistan and ADB on payment of second tranche of Loan. 2014 год negotiations with ADB on third tranche. 4
President s resolutions, directed at realization of housing construction in rural area: - Resolution of the President of the Republic of Uzbekistan from 03.08.2009 # PP-1167 «On additional measures on expansion of housing construction in rural areas»; - Resolution of the President of the Republic of Uzbekistan from 17.06.2010 # PP- 1354 «On additional measures on expansion of individual housing construction in rural areas on basis of standard designs»; - Resolution of the President of the Republic of Uzbekistan from 08.09.2010 #PP- 1403 «On additional measures on development of planning and improvement of housing construction in rural area»; - Resolution of the President of the Republic of Uzbekistan from 11.01.2012 #PP-1683 «On first-priority measures on realization of the Program of multi-tranche financing of the project «Housing construction development in rural area» with participation of ADB»; - Resolution of the President of the Republic of Uzbekistan from 14.01.2012 # PP- 1687; - Resolution of the President of the Republic of Uzbekistan from 04.01.2013 # PP- 1902; - Resolution of the President of the Republic of Uzbekistan from 15.11.2013 # PP- 2068. 5
Financing of housing construction in rural areas: During 2009-2013 in 845 rural massifs (areas) all over the country 33 557 standard houses with total area 4532,6 thousand м 2 and total cost 3 347,5 bln UZS have been constructed. Construction of these houses has been financed at the expense: - preferential mortgage loans (credits) of Qishloq Qurilish Bank (and since 2013 also National Bank and Ipoteka Bank) at the amount of 1954,5 bln UZS (of them, ADB funds 557,5 bln UZS); - own funds of population at the amount 1361,3 bln.uzs (of them, initial installment 836,8 bln UZS; final payment 524,5 bln UZS). 6
Realization of housing construction in rural areas in figures In 2009, 2010 и 2011 15.047 houses in 621 massifs with total area 2.045,6 thousand м 2 have been built. The costs on the housing construction made up 1.056,1 bln UZS, of them: 655,8 млрд. сум preferential credits of the bank. In 2012 8.510 (3-, 4- and 5-room) houses with total area 1.2 mln м 2 were built. The participation of ADB (1-st tranche at the amount of 160 mln USD) provided the construction of 4.806 houses. The construction of remaining 3.704 houses has been financed at the expense of the Ministry of Finance and Qishloq Qurilish Bank. In 2013 10.000 houses have been constructed: 8510 houses at the expense of ADB funds, 1490 houses at the expense of banking credits and credit line of Ministry of Finance of Ruz. Amount of massifs 353. Total area 997,1 hectares. In 2014 the construction of 11.000 houses have been planned and realizing. The amount of foreseen massifs 388. Total area 1096,8 hectares. In 2015 the construction of 12.100 houses have been planned. 7
Creation of infrastructure in 2014 within housing construction in rural area In 2014 at the expense of state funds (funds of the republican budget, JSC «Uztransgaz», SJSC «Uzbekenergo» and Republican Road Fund) more than 343,65 km of water supply, around 307,30 km of electricity supply, 433,02 km of gas supply and 263,02 km of access roads have being constructed. In massifs of housing construction 187 facilities of market and social infrastructure have being constructed. 12
Target group (Beneficiaries) within housing construction in rural areas are residents of rural areas, and firstly: 1. Households with average and low income; 2. Socially vulnerable families (large families; families without breadwinner; single mothers with children); 3. Teachers and employees in healthcare sector; 4. Small business and private entrepreneurship, which will create new jobs in rural area. 9
Loan granting scheme Constructing organization Qishloq Qurilish Invest 4 Qishloq Qurilish Bank Client 1.Selection of standard design, conclusion of preliminary contract; 2.Placement of funds at amount of not less than 25% from cost of housing and preparation of documentation for procurement of credit; 3.Conclusion of contract for housing construction; 4.Phased financing of construction (25%+credit); 5. Delivery of construction facility from Contractor to QQI; 6. Handing over of housing to owner. 10
Conditions of mortgage loan granting by housing construction in rural area for 2014: The loan will be granted on following terms: Loan amount not more than 1000 minimal wages; Loan period until 15 years, including 1-year grace period; Interest rate 7% interest per annum during first 5 years and 90 % of refinancing rate of CBU (in 2015 equal to refinancing rate of CBU) for remaining 10 years; Initial installment - 25 % from the cost of individual housing. 11
BENEFITS For Individuals since 2014: 1. Interest rate - 7% interest per annum during first 5 years and 90 % of refinancing rate of CBU (in 2015 equal to refinancing rate of CBU) for remaining 10 years; 2. funds, directed at repayment of mortgage loan and interest rates on it, will be freed from profit tax; 3. funds, granted by employer for purchase of house, also will be not charged with taxes; 4. Grace period on loan 1 year. For contracting organizations in part of work capacity according to the contractor s agreements with Qishloq Qurilish Invest: exemption until the 1. January 2015 from single tax payment. For SJSC «Uzprommashimpeks»: exemption from customs payments (except customs fees) for imported roofing metallic sheet, and also from VAT for imported carving wood, roofing metallic sheets and wood particle board by it realization to Qishloq Qurilish Invest. For Qishloq Qurilish Invest: exemption until the 1. January 2016 from payment of all taxes and compulsory payments to Republican Road Fund and Non-Budget Fund of School Education; For organizations on production construction materials: exemption until the 1. January 2015 from payment of all taxes and compulsory payments to State Funds-In-Trust and Non-Budget Fund of School Education. 14
In purposes of complex realization of housing construction in rural area the engineering company Qishloq Qurilish Invest, which carries out the whole complex of works on housing construction on basis of standard designs on turnkey basis, was established. At present the founders of Qishloq Qurilish Invest are the Ministry of Finance of RUz and another state joint-stock companies. QISHLOQ QURILISH INVEST Engineering company 13 REGIONAL BRANCHES of Engineering company 13
The main tasks of the engineering company QISHLOQ QURILISH INVEST Marketing research of housing market Fulfillment on contractual basis of Customer s functions Placement on tender basis of orders for housing construction Handing over of built housing to population 14
Standard designs of housing, constructed within the Program, developed by the planning Institute «Qishloq Qurilish Loiyha» 3 standard designs of housing construction 16 facilities of social construction standard plans of complex construction Designs approved by the Republican Architectural Council 15
THANK YOU FOR ATTENTION! 19