VÍCTOR BORRÁS SETIÉN
We are an autonomous institution in which the corporate governance includes equal representation from all stakeholders, as well as the labor, employer, and federal government sectors. We call ourselves a social mortgage lender, as we lend to acquire, build, or remodel houses, offering lower interest rates than the main market. We are the largest mortgage institution in Mexico, and workers who receive the lowest incomes are our main clients. At present, we have 14 million affiliates and 5 million active credits; we approve 500,000 financed credits per year—approximately 10,000 credits per week—through a highly automated process. Today, 22% of Mexicans live in a dwelling financed by Infonavit. I believe that the housing industry in Mexico has been very successful, and we have changed the landscape of the sector and revolutionized how Mexicans live. Toward the end of the 1990s, Mexico had a lack of large dwellings and a services shortfall. Nowadays, the housing industry faces two main challenges. The first challenge is to improve the quality of life. Following 2007, Infonavit began to focus on welfare in order to promote initiatives to improve standards of living. Secondly, we face the challenge of attending to sectors of the population that are not already affiliated with Infonavit or the Housing Fund of the Social Security and Services Institute for State Workers (FOVISSSTE).
ARIEL CANO CUEVAS
Demand has been driven by the historical trend of overpopulated houses or people who can’t afford to buy homes. There are around 2 million households in this situation, and this is one area of demand that we aim to address. The other is the demographic factor—even though Mexican birth rates have gone down, we still have a large young population that demands homes. According to government estimates, we will need 9 million new houses by 2020. In 2005 there was a legal reform of the national housing law, and CONAVI was born. Before the reform, CONAVI was more of a promoter rather than a public policy coordinator. In 2007 we began to offer up-front subsidies. Now, with the federal administration under President Calderón, we have issued almost 900,000 subsidies from our program, or about $2 billion. It’s important to understand what the sector was like 10 years ago and where we are today. Between 2000 and 2010, national public policy in housing was mainly aimed at developing a strong and robust financial platform to serve low-income groups of the population. We have already achieved that; CONAVI has made housing accessible to very low-income segments of the population. The problem in most Latin American countries is that the private banks are very selective, focusing mainly on the medium- to high-income groups.
JAVIER GAVITO MOHAR
In 2007, there was a minor crisis in the housing market, and the sector was slightly restructured through consolidation. We are now distributing construction loans effectively, and we expect to double construction loans in 2011 over 2010. For the three kinds of housing mortgages we offer, we haven’t seen the same level of success as before; these projects are riskier and the outcome of the portfolios could have been better. Therefore, we changed the structure of our microloans and related products. We looked abroad for inspiration and received assistance from the World Bank. We used to give loans on an individual basis, which is not possible for microloans, so we now perform portfolio guarantees. For long-term mortgage loans we have introduced a new product that distributes risk among all participants in the most efficient manner. We have also designed a public policy with other governmental agencies aimed at promoting quality over quantity in the evolution of the sector. There are currently 1 million housing transactions per year in Mexico, and supply has generally been enough to cover it. Of this number, around 250,000 are microloans for housing improvements. The population is growing at a steady, positive rate, but there is still a large housing deficit that needs to be overcome via innovative financial solutions. We still have good opportunities to grow.
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