Reducing risk for Banks to provide Affordable Housing Loans
In Mexico, we provide a program that serves as an intermediary between banks and families without credit who are looking to finance and build their home.
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Sobre tu organización
Nombre de la organización
Halieus Corporation S.A. de C.V.
Sitio web de la organización
País de la organización
México, SON, Puerto Penasco
Países en donde este proyecto está creando impacto social
México, SON, Puerto Penasco
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Selecciona la fase que describa mejor el momento en el que se encuentra tu emprendimiento
Inicio (iniciativa piloto que acaba de empezar a ponerse en práctica)
¿Cuánto tiempo se lleva poniendo en práctica tu iniciativa?
Operando entre 1-5 años
¿Cuál de las siguientes describe mejor la(s) barrera(s)s a la que da respuesta tu innovación? Elige hasta dos.
La necesidad: ¿Cuál es el problema que tratas de solucionar?
Roughly 1 out of 4 Mexicans have bank accounts. Banks in Mexico supply only 20% of the mortgage market, primarily serving the upper class. Roughly 2/3 of the workforce is informal labor & does not have adequate credit history. As it stands currently, this population is very risky to loan to, requiring extremely high interest rates that price people out of home ownership. Between 6-8 million homes are currently needed & the number is expected to increase by 700,000 homes annually for the next 20 years. This 20+ million housing shortage represents a potential $20-40 billion mortgage market opportunity, but due to the factors mentioned above banks are limited in their ability to deliver affordable solutions to capitalize on this opportunity.
La solución: ¿Cuál es tu solución? Sé específico.
We provide a community cooperative that serves as an intermediary between banks & families. The cooperative aids families in establishing credit by saving to a community account. We provide education on topics from how to manage a checking account & a home loan. We aid in home design. The home loans are cross collateralized by the members, dramatically reducing risk of default.
Once a family has saved a 10% down payment, we provide families with the materials, logistics, & training to build each other's homes. This sweat equity with the 10% down payment creates a 40-50% loan to value ratio, further reducing the risk of the loan. Our patented building material is fast & easy to use, is engineered to withstand earthquakes & hurricanes, is energy efficient, & will last for generations. This provides the bank an asset it can use as collateral.
Our model opens a new market for banks by reducing risk & provides families with credit & an affordable home.
El Modelo: Muéstranos a través de un ejemplo específico cómo tu solución hace una diferencia, incluye tus actividades primarias
We establish a savings cooperative in a local neighborhood. Families who prove they own their land can sign up to start saving the amount equal to a mortgage payment each month. During this time they receive education on finances, loans, and home ownership. When they have saved 10% of the housing solution, they receive a loan for the materials to construct their home.
The members in the cooperative aid in the construction of each other's homes, providing sweat equity. Members are trained in building techniques that can be used for jobs. Once the home is built the family makes payments on their home loan, usually paying the loan off in 7-10 years at a rate they can afford, usually 9-12% annually.
Now the family has an asset in the home with equity built in. They have a credit history with the savings account and home loan. They also have a physical address to provide banks to be able to open a checking account. Their credit history should allow them to qualify for other loans at much more affordable rates.
Their homes are also built with energy efficient wall systems (certified by the Mexican government office for energy ONNCCE to meet the highest standards for energy efficiency) which allows the family to save on expensive energy costs.
These local cooperatives act as franchises and are managed by local leaders. This allows us to replicate the model throughout the region and the country.
El mercado: ¿Quiénes son tus pares y competidores? Identifica a otros que también estén trabajando para dar respuesta a las necesidades que tú abordas y en qué te diferencias de ellos. ¿Cuáles son los desafíos que estos jugadores podrían representar para tu éxito o crecimiento?
The need for credit, loans, and housing is so great in Mexico we really have peers more than competitors. We belong to an association, CONVIVES, which is made up of companies trying to provide housing solutions. Currently, the majority of funding for projects is from the Mexican government. Due to the reduced risk & potential rate of return possible, we believe there is an opportunity for bank and impact investment funding. JP Morgan and the Rockefeller Foundation identify housing as a major investment opportunity for impact investors, potentially reaching $780 billion in investment over the next 10 years.
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Historia de la fundación: Queremos saber acerca del momento en el que hiciste "¡Ajá!". Comparte la historia de dónde y cuándo el/los fundador(es) vio (vieron) el potencial de esta solución para cambiar el mundo.
Originally, two of us from the United States wanted to address the housing issue in Mexico. We patented our building material in Mexico & partnered with a Mexican home builder. After building a small number of homes, we began to realize the housing solution was not the primary need. Access to credit and financing was the major issue. As we began to look for ways to solve the credit issue, we met Dr Piazzesi through another Changemakers competition and became a member of CONVIVES.
CONVIVES introduced us to the idea of the savings cooperative. Our "AHA!" moment came when we saw the ability to combine the cooperative with our building process, which would lower risk and provide a rate of return desirable to banks & impact investment funds. This model could open a new market opportunity to a deeply underserved population in Mexico & other countries.
Por favor, describe el objetivo de tu iniciativa: un resumen de lo que están tratando de lograr
In the next 5 years, our goals are to:
1. To become one of the largest home and mortgage providers in Mexico. To do this we want to create 100 Community Cooperatives (structured as mini franchises), each capable of building around 300 homes per year = 30,000 homes per year in Mexico.
2. Build relationships with major banks and investors to fund the demand expressed in #1.
3. Sell bundles of performing loans on the secondary market, freeing capital for more home loans.
4. Expand program to other countries with similar demographics (ie. Costa Rica, Brazil, etc.).
¿A qué barrera(s) a la inclusión financiera tu solución busca dirigirse? (selecciona todas las pertinenetes)
Físicas y otros obstáculos de accesibilidad que impiden que los servicios financieros lleguen a las comunidades, Falta de productos financieros asequibles adaptados a las necesidades de las comunidades marginadas y excluidas, Poderosos incentivos para que los proveedores de servicios financieros asciendan en el mercado.
Si ha seleccionado "otro", por favor especificar qué otras barreras a la inclusión financiera tu solución busca dirigirse
¿Para qué comunidades marginadas o excluidas tu solución creará un acceso a servicios financieros valiosos, asequibles, seguros e integrales?
In Mexico, this program would be targeted at the 33 million out of 40 million total employed workers who make less than 5 times the minimum wage.
¿Tu solución podría operar en otros conextos o regiones? Si así fuera, ¿en dónde?
Most definitely. This type of solution would fit in many Central & South American countries as well as many countries in Eastern Europe. The keys are identifying nations with a large population at the upper end of the Bottom of the Pyramid (in the BOP 2000- BOP 3000 range) that lack access to financing.
Si tu solución tuviera un éxito espectacular, ¿cómo serían las cosas diferentes en 10 años?
We are talking about a cataclysmic shift in the outlook of a country. New communities of homes will replace slum villages. These new communities will attract new businesses to serve the areas, creating new jobs. Currently, this demographic is a burden to local governments. New homes will increase property taxes. This will allow governments to spend less focusing on housing solutions and more on infrastructure and new schools in these new communities, again creating new jobs. These jobs will keep fathers from having to migrate to the US in search for work. Each year we will bring hundreds of thousands of people into the global financial marketplace. This group will be both producers and consumers of goods, increasing GDP and trade for Mexico.
Banks will have a new market to service that will continue to grow each year. The rise of this demographic will be similar to the Industrial Revolution in the US as solutions once only for the rich will be for the common man.
¿Qué tendría que haber cambiado para que esto sucediera?
1. Perception- banks and investors will have to be convinced the risk is limited to make the investments.
2. Visibility- we pilot project and early communities must perform well and then word must spread to other communities throughout the country. For best results, people must want us to come to them, not us trying to convince every community we come to.
¿Cuál ha sido el impacto de la solución hasta la fecha?
This model has been proven with other companies we have worked with, but on a limited scale. This has been due to the solution being dependent on government financing, which is not always available. We have seen the system work, we are preparing to do our own pilot project with private money. From there, the goal is to scale.
Cuál es tu impacto proyectado para los próximos 5 años?
100 community cooperatives building 300 homes per year each for a total of 30,000 homes per year. This will require $270 million in financing annually. Each $270 million loaned annually will produce $135 million in revenues over the ten year life of the loans.
¿Qué barreras pueden dificultar el éxito de tu proyecto? ¿Cómo planean superarlas?
1. Lack of finances for loans- if we can not prove the system reduces risk, we will not be able to acquire financing. To overcome this, we must show in smaller samples what is possible and scale from there.
2. Monitoring the Community Cooperatives- to ensure proper use and functionality of the cooperative, we will work alongside local NGO's, especially in the cities near the US border, to work with locals to administer the cooperatives.
Las iniciativas ganadoras presentan un plan fuerte de cómo van a alcanzar y realizar un seguimiento del crecimiento. Identifica tus metas a seis meses para el crecimiento de tu impacto
Pilot Cooperative Created with 30-50 famlies
Identifica tres grandes tareas que tendrás que completar para llegar a las metas de seis meses.
Work with our local builder and NGO's who already have a list of potential families to join the pilot cooperative.
Have CONVIVES organization aid us in creating the first pilot program, including savings accounts and relationships with banks.
Ensure we have necessary capital to fund pilot homes.
¡Ahora piensa en grande! Identifica tu meta de impacto a 12 meses.
Acquire funding for larger project- 1,000 homes over three years for one cooperative
Identifica tres grandes tareas que tendrás que completar para llegar a tu meta de impacto a 12 meses
Finish pilot project and use it as an example to civic leaders and funders for a larger project.
Raise $10 million in financing to be loaned over next three years.
Create 2 additional cooperatives to meet this goal.
Cuéntanos sobre tus alianzas.
CONVIVES is an association of 8 companies focused on providing social housing solutions. The organization works with government organizations to provide funding for social initiatives. While this is a great relationship for us, long term we want to be less dependent on government funding.
Local NGO's- we work with 2-3 local non-profits that are heavily invested in the communities we are working in. This is valuable for us to be able to identify leaders in the community and the NGO's can aid in the training and education of the families, which they already do.
¿Actualmente te estás dirigiendo a otras poblaciones, lugares o los mercados para tu innovación? Si es así, ¿dónde y por qué?
No, not yet. We want to test out the system first in a controlled environment. Once we prove the model, places such as Costa Rica and Brazil that have similar populations and where we have sister companies that use our building solution will be targeted for expansion.
¿Qué tipo de sistema operativo y factores internos de la organización hacen que tu innovación sea un éxito?
First, our team is unified in what we want to create. Second, we have assembled a team of diverse parts, each with their own function and value, to help bring our project together. Everyone from CONVIVES to the NGO's to our builder to the families who we are serving are part of our solution. Each has a job to do and we know what that job is. Creating this type of clarity for each person or group is key to our success.
Por favor, pon en claro las necesidades u ofertas que hayas mencionado anteriormente y/o sugiere categorías de apoyo que no están especificadas en la lista
As we grow our network of funders, any networking amongst investors or banks would be greatly appreciated. In terms of offers, we recognize collaboration and innovating with others is key. This problem is too big for only one group to solve. It would be a privilege if we can help others in this journey.