There are many conditions required in a country to grow its mortgage market, from a stable macroeconomic environment to an effective legal and regulatory framework – and if these prerequisites are in place, investment can be effective. Paying attention to country contexts is essential to ensuring success, like in the case of Romania, where a long-term loan from International Finance Corporation (IFC) allowed the mortgage and home improvement loan portfolio to grow.
This long-term loan from IFC strengthened and facilitated the county’s strong presence in the regional mortgage finance market, and enabled the bank holding the investment to illustrate commercial viability of mortgage finance. This investment allowed a Romanian Bank to make long-term foreign currency loans to clients in Transylvania, and contributed to greater competition in the mortgage market, along with a lowering of mortgage rates.
Source:
World Bank Group. (2016) World Bank Group Support to Housing Finance. International Bank for Reconstruction and Development / The World Bank.
Link: https://ieg.worldbankgroup.org/evaluations/world-bank-group-support-housing-finance