State owned participants as a part of the state program Kazakh Mortgage Company

• State owned participants as a part of the state program

• Kazakh Mortgage Company (December 2000)

• Kazakh Mortgage Credit Guarantee Fund (November 2003)

• Housing Construction Saving Bank (Law passed in 2000, Bank started to work in 2003)

• Commercial participants

• Commercial Banks - 35 (2007)

• Mortgage Companies – 10 (2007)

• Accompanying participants

• Insurance Companies – 41(37) (life insurance -7(3))

• Credit bureau – 2006 (fully operational) -2.8 million credit files

• Appraisers – exceed 2,500 in the country.

• Realtors

• Mortgage Brokers

• Funding vehicle

• Stock Exchange survey

The Law on Mortgage Lending has been reviewed;

• The Law on Mortgage Lending has been reviewed;

• The Law on Share Construction is being reviewed;

• The Instruction on Mortgage Lending of non-bank institutions;

• The State Construction Program for 2008 – 2010 years;

• The Law on Realtors Activity is being proposed;

• The “One Servicing Window” Approach to tackle corruption is implemented;

• Securitization Law is being amended;

• Housing Relations Law is being drafted;

• New Taxation Law Draft is being rectified;

• Consumer Rights Protection Law – to be proposed by the Project;

Mortgage Portfolio Growth

• Mortgage Portfolio Growth

• Currency-Break Down

• Regional Concentration

• Housing Prices Overview

• Mortgage Products

Financial Sector

• Financial Sector

• Inadequate Risk Management – Holding Risk Concentration;

• Mortgage Loan Concentration;

• Mortgage Affordability;

• Lack of Financial Stock Exchange Instruments;

• Bearish Real Estate Market Situation (Falling Market);

• Inadequate Financial Sources Base;

• Emerging M-Lending monopolist – KMC;

• Inability of the M-lenders to keep with the previous year M-lending dynamics –

• M-lending limitations;

• Though interest rates are low the M-lending is not performed;

• M-lending performed at 23%-25% level though now down—trend to 17%- 19% is observed;

• Consequential LTV increase to 50%-70%;

• High inflation pressure due to economy over-heating;

Mortgage industry has been experiencing significant dynamics from 2.0% to 2.6% of GDP

• Mortgage industry has been experiencing significant dynamics from 2.0% to 2.6% of GDP

• As of December 31, 2007 the total value of the mortgage market is $98 millions

• Share of mortgage: 8.4% bank assets, 17.3% loan stock

• 19 of 23 banks lending mortgage.

• 44 of 456 non-bank financial institutions offer mortgage loans.

• ATF Bank, Halyk Bank, AUB, Finance Credit Bank and KICB account for 71.2% of the mortgage market.

Actual improvements:

• Actual improvements:

• State fee for notarization reduced, 2005-2007

• Public access to Registration database, 2006

• Pledge regulations enhanced through changes to Civil Code, 2007

The main topics of the program:

• The main topics of the program:
• Improvement of the legislation (due to list);
• Create the favorable environment to attract investments;
• Improving internal production of the construction materials;
• improvement of social and economic situation;
• Attract new construction technologies to the building industry;

Drafts approved by the Government :

• Drafts approved by the Government :

• Draft law on MBS

• Drafts initiated by the Government:

• Draft Law on housing certificates

• Housing code

• Amendments to the Law on “Protection of consumer’s rights” in part of co-sharing construction

• Amendments to the Land Code

• Amendments to Civil Code

New initiative is announced:

• New initiative is announced:

• The mortgage industry is given much priority

• Ministry of finance is the authority to create working group within 2 months

Amendments to the law on registration to exclude “Preliminary registration”;

• Amendments to the law on registration to exclude “Preliminary registration”;

• Law on credit bureaus;

• Law on appraisal activity;

• Amendments to the existing legislation to avoid contradictions.

Need for broader based coverage of potential bank partners for pilot projects

• Need for broader based coverage of potential bank partners for pilot projects

• Potential conflict with IFC bank eligibility criteria

• Bank refinancing is vital

Simultaneous state registration of sales-purchase agreement and mortgage;

• Simultaneous state registration of sales-purchase agreement and mortgage;

• Absence of mortgage registration duty and notarization;

• Reduction of paper flow volume for registration;

• Formalization and state registration of operations with Mortgage Note;

• State registration of court notifications, etc.;

• Total banks number: 27

• Banks, not engaged into HF: 6

• Total number of deals: 3320

• Total Portfolio: 65615 mln UZS= aprox 51 mln USD