IDB Invest, a member of the Inter-American Development Bank (IDB) Group, provides a line of credit to CTH (Compañía de Titulación Hipotecaria), a company dedicated to promoting financing for housing and the Ecuadorian securitization market. The operation consists of a $15 million facility, or line of credit, which will allow CTH to buy residential mortgages from other financial institutions to accumulate, securitize and sell on the Ecuadorian stock market.
The facility will allow CTH to increase the availability of financing for residential housing. In addition, approximately 45 percent of the mortgages originated by CTH are directed at Ecuadorians living abroad, who will have the opportunity to channel their income and remittances to long-term capital investments and not only to consumption.
The housing deficit in Ecuador was almost 46 percent in 2016 and the size of the residential mortgage market is small. There is significant potential for further development of the housing finance segment in the country. The mortgages acquired by CTH must meet the eligibility criteria established by IDB Invest, including mortgages for the purchase and improvement of the main home with a maximum home value of $150,000.
It is expected that this operation will potentially contribute to two of the United Nations Sustainable Development Goals: End of poverty (SDG 1) and Sustainable cities and communities (SDG 11).
IDB Invest, a member of the Inter-American Development Bank (IDB) Group, is a multilateral development bank committed to promoting the economic development of its member countries in Latin America and the Caribbean through the private sector. IDB Invest finances sustainable enterprises and projects to achieve financial results that maximize economic, social and environmental development for the region. With a portfolio of assets of $12.1 billion under management and 329 clients in 21 countries, IDB Invest works across sectors to provide innovative financial solutions and advisory services that meet the needs of its clients.
CTH S.A. (Compañía de Titulación Hipotecaria) it is an institution that is part of the private financial system and is controlled by the Superintendency of Banks. Its objective is to develop mechanisms tending to improve the housing sector, through the creation of financial products oriented to the stock market. Since 2003, CTH S.A. It has carried out eight processes of securitization of its own portfolio, 22 portfolio processes of eight private financial institutions, for an amount of $1.232 million. He has actively participated in the housing program of public interest, in which entities of the private financial system and the popular and solidary financial system are involved, in coordination with the Central Bank; Six securitization processes for around $404 million have been successfully completed in this process, for an accumulation of securitizations for a total value of $1,636 million.