IFC and key stakeholders in the Ukrainian mortgage market will cooperate to develop Ukraine’s mortgage industry

Kyiv, June 7, 2007. IFC, the private sector arm of the World Bank Group, in collaboration with the Ukraine National Mortgage Association, hosted a workshop with key stakeholders of the Ukrainian mortgage market on June 6 to discuss cooperation in the development of the Ukrainian mortgage market. Representatives from the National Bank of Ukraine, National Mortgage Organization, Privat Bank, Access to Credit Initiative (ATCI), Ukrgasbank, NLB InterFinanz and other organizations took part in the discussion.

One of the many concerns raised by workshop participants was the lack of standardization of closing documents for a mortgage transaction, such as a mortgage note. During the discussion, IFC shared its experience in developing standardized closing documentation and a standardized mortgage note in Russia. IFC also unveiled insights into its ongoing initiative -- the IFC Ukraine Mortgage Note Development Project -- which is aimed at addressing this issue.  The project is financed by IFC.

Resulting from this discussion, IFC and workshop participants identified several areas for initial co-operation:

• Conducting an in-depth legislative analysis of Ukraine’s existing legal and regulatory environment to determine whether it permits effective use of mortgage note and identifying pertinent gaps.
  
• Developing necessary regulatory base to ensure a solid legal framework for transactions with mortgage note based on the findings and recommendations of the legislative analysis .
  
• Developing an industry-standard form for mortgage note, including relevant instructions, in co-operation with major Ukrainian mortgage-lending banks, the Ukraine National Mortgage Organization, and other stakeholders.
  
• Facilitating first transactions with mortgage note with 2-3 pilot banks to demonstrate  viability of mortgage note transactions in Ukraine.
  
• Conducting training workshops and seminars on legal and financial aspects of working with mortgage notes

The workshop concluded with an agreement for IFC to allocate resources in order to identify priorities in resolving the above-mentioned issues. 

 “IFC has an important role to play in helping consolidate the industry effort in identifying key issues and developing common solutions” said Anton Sergeev, Director of NLB InterFinanz in Ukraine.

Additionally, the workshop facilitated the establishment of an initiative group, made up of stakeholders in the Ukrainian mortgage market, which will serve as a working mechanism for reaching industry consensus.

“I appreciate the commitment of the workshop participants to work together to identify priorities for project activities. The formation and future efforts of the initiative group, representing key players in Ukraine’s mortgage industry, may become an important step towards increasing the liquidity of Ukraine’s primary mortgage market” said Dermot Hannigan, IFC Project Manager.

The first meeting of the newly formed initiative group is expected to take place shortly.

About IFC
IFC, the private sector arm of the World Bank Group, promotes open and competitive markets in developing countries.  IFC supports sustainable private sector companies and other partners in generating productive jobs and delivering basic services, so that people have opportunities to escape poverty and improve their lives. Through FY06, IFC Financial Products has committed more than $56 billion in funding for private sector investments and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. IFC Advisory Services and donor partners have provided more than $1 billion in program support to build small enterprises, to accelerate private participation in infrastructure, to improve the business enabling environment, to increase access to finance, and to strengthen environmental and social sustainability. For more information, please visit www.ifc.org.

19.06.2007