A review of the World Bank’s experience 1
Robert M. Buckley
The World Bank, USA
Since 1983 the World Bank has lent almost US$5 billion (1996 dollars) to support housing finance in forty projects in developing and transition economies. Of the twenty-seven projects that have been subjected to ex post facto evaluation twenty, or 74 per cent, were found to have had a satisfactory outcome, a figure somewhat higher than the 68 per cent realized by other World Bank projects, and considerably higher than the performance of loans the World Bank has made to financial intermediaries.
This chapter attempts to describe these projects, the rationales for undertaking them, and some of the factors that caused the relatively stronger performance of housing finance interventions vis-à-vis those of the Bank in other sectors. It provides a simple analytical perspective that links these projects to the World Bank’s evolving understanding on how to assist the development of effective and sustainable financial and housing delivery systems. Particular emphasis is given to the effects that the changing world financial and economic environment has had on the kinds of projects undertaken. Finally, the conclusion argues why housing finance reforms should be an important part of the development process. It might be appropriate to mention at the outset that the emphasis in this chapter is on housing finance projects in a country development strategy. Little attention is given to the important micro-economic aspects of such lending. Nor does the chapter deal with community or NGO finance schemes, important though they are in providing housing for shelter.