Colombian Mortgage Market

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					Colombian Mortgage Market
Pricing Structure
Early 70’s 70’s – early 90’s Mid 90’s – Late 90’s Dec 99 2000 2002

•Creation of UPAC (Unit of Constant Purchasing Power).

UPAC was modified several times: •Linked to M.IR. •Capitalization of interests.

UPAC collapsed: •M.IR reached
60%. •Economic recession. •Capitalization of interests was declared unconstitutional.

Creation of UVR. •Linked to inflation. Conversion of CAVs into Banks.

•UVR •Loan balances recalculated with UVR.

Colombian Mortgage Market
Mortgage trends
12000 10000 8000 6000 4000 2000 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2000


1800 1600 1400 1200 1000 800 600 400 200 0

US$ million


Creation of the CHMC
WB Strategy and IFC Role
Early Stages 1993-1998
•Support in the drafting of the new mortgage and capital market Law.

Intermediate Stages 1999- mid 2001
•Assistance in the implementation of the new Law. •Addressing the Constitutional Court ruling. •Break barriers between institutional investors. •Creation of an Ad-hoc Repo mechanism with CB •Creation of a Clearing Mechanism

Creation of the CHMC
WB Strategy and IFC Role
Final Stages Late 2001-2002
•Creation of the CHMC in July 2001 •IFC’s equity investment of US$40 million and LCGF of US$100 million. •Attract new investors (AVVillas, Colpatria, CAF). •Assistance in risk management, technological development and organizational structure.

Creation of the CHMC
WB Strategy and IFC Role
Recent Achievements 2002
•First mortgage issue in April 2002 •COP 464 billion (US$ 200 billion) •Demand 8.9 times.

Jun Wang Jun Wang Dr
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