Financial Marketing tips | Gabrielle Rusignuolo

Financial Marketing TipsFinancial Marketing Tips

A financial market is a market in which people trade economical securities, commodities, and other fungible products of value at low purchase costs and at prices that indicate supply and demand. Investments consist of shares and bonds, and commodities involve valuable metals or agricultural products. The financial market is a broad term describing any marketplace where buyers and sellers engage in the trade of resources such as equities, bonds, currencies and derivatives

Financial Marketing

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• Stable growth• Served by specialized HFCs & Professional Financial

institutions - synergies • Proactive and Threat centered Regulation• Conservative loaning practices; Develop to hold• NPAs well included • Shift from high-end target Cost-effective housing• Market segmentation – varied risk• Broad centered stakeholding – causes balance

Native Mortgage Native Mortgage MarketMarket

Fiscal and

Credit Policy

Support

FinancialMarket

HousingMarket

Affordability

Banks

Financial Sector

CapitalMarket

Real Sector

PublicAgencies

PrivateDevelope

rs

MFIs

Housing Finance MarketHousing Finance Market

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HFCs

Land &

ConstructionInfrastructure

Informal Sector

NHB

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Outstanding Housing Outstanding Housing LoansLoans

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Trends in Housing Finance Trends in Housing Finance

Disbursals (INR in billion)

• Real estate Economical loans excellent 7.9% of GDP

• Supportive Regulatory/Fiscal Policies• Financial Deepening • Supply Responses: Requirement Driven• Main recipients - paid category, experts and tax

payers• Challenge for Low Earnings Real estate –

“Accessibility” and “Affordability” 7

Styles in Real estate Styles in Real estate Finance Finance

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• Financial Industry and Investment Marketplaces - Growth

• Interest prices deregulation • Growing Disintermediation • Shift towards Industry Focused Source Mobilisaiton• Level Enjoying Atmosphere • Market Identified Cost• Keeping on • Affordability• Availability• Accessibility

Financial Atmosphere Financial Atmosphere

• Fast development in real estate industry has side stepped Low-Income Houses

• Demand Recognition

• Risk Perception

• Price Increase, Interest Rates - Effect on Low Earnings Housing

• Market/Subsidy based Approach9

Problems in Low Problems in Low Earnings Real estate Earnings Real estate

• Restricted accessibility to real estate credits• Cannot agreement economical obligations on the

economical market• Unstable earnings and volatile cash flows• High threat & heavy cost - to - service customers• Role of Guarantee/Risk Fund• Role of Govt & Funding Organizations in Industry

Environment• Leveraging impact of Subsidy 10

Problems in FinancingProblems in Financing

• Competitive Requirement on Area and Finance• Land provide is constrained:• Land accessibility • Land use rules• Efficient use of Area • Title and Period • Finance Circulation Constrained• Stability • Growth • Risk Perception• Need for ‘Integrated Approach’

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Supply Restrictions Supply Restrictions

Real Sector • Area Supply• Cost of Land• Land industry functioning• Infrastructure provision• Construction & Delivery• Role of Community &

Personal Sector

Role of Incentives Subsidized Housing Credit Subsidized House Prices

Financial Sector• Venture Fund • Individual Loans • Supply of Funds• Cost of Funds• Whether market

centered solution?

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Affordability IssuesAffordability Issues

Supply Side• Area Acquisition• Infrastructure Provision• Sale of Land• Housing Construction• Housing Sale• Role of Community

Agencies/ Designers • Credit Delivery

Demand Side• Buy Price• Income Level• Affordability• Loan eligibility• Subsidy component• Risk Mitigation• Role of NGOs/MFIs• Demand Gathering or

amassing

Ensuring access to housing with infrastructure at affordable prices 13

In Other WordsIn Other Words

• Official industry is the reason for only 25% of the overall investment strategies in housing; manipulated submission of credit

• Affordability and security; recognized greater risk

• Financial support through casual industry at nascent stage

• Subsidized real estate programmes: limitations

• Targeting and durability of such programmes14

ChallengesChallenges

• Market’s restrictions / Subsidy Restriction

• Private Investment and Community Objective

• Formal & casual areas compartmentalized

• Demand gathering or amassing, requirement signing up, intermediation and threat mitigation

• Incentives for Savings

• Policy Reforms15

ChallengesChallenges

• Not enough provide at affordable costs. Effect of decreasing costs on the stock of real estate, the circulation of real estate and real estate finance

• Price – Supply connection. Profit on Value or Quantity Productivity to stimulate the suppliers/builders. Price/cost structure

• Demand understanding of cost but provide not forth-coming

• Measures to turn the investor’s industry into consumer’s industry 16

Where is the Disconnect?Where is the Disconnect?

• Cooperation Technique : Public/Private/Community

• Innovative devices for benefits of All

• Incentives for Low Income Property Credit

• Demand led

• Incentives for Low Income Property Growth 17

Search for Synergies Search for Synergies

Central Government

State/Local Governments

Financial Institutions

PUBLIC PRIVATE

Partnership

RealSector

Financial Sector

FormalSector

InformalSector

Facilitator

& Enabler

Policy &

Programmes

Policy &

Programmes

Instns &Products

Affordable Housing for All and Financial Inclusion

–Mutually Consistent Themes18

Sector Profile – Wide Sector Profile – Wide StakeholdingStakeholding

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• Govt Support

• Liquidity

• Pricing

• Risk Minimization

• Targeting - Low Earnings Real estate

• Guarantee Fund / Subsidy

• Subsidy assistance to EWS/LIG housing

• Leverage institutional finance

Institutional SupportInstitutional Support

GOVERNMENT INTERVENTIONThe Govt could consider allowing legal and regulating

changes and create an allowing atmosphere

through effective performing of the area market

Streamlining of all acceptance processes

provision of effective facilities

e-governance viz. presenting electronic history for area and getting more visibility in the history of area and houses

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Policy IssuesPolicy Issues

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• Specific Organizations vs. Worldwide Institutions

• Augmenting resources for the sector

• Source Mobilization & Deployment

• Facilitating the development of Additional market

• Lending Self-discipline & Quality of Assets

• Tapping International Industry – Lendings & Investment strategies

Development of Real estate Development of Real estate Fund SectorFund Sector

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• Property Plan at National & Local level

• Integrated with Cost-effective Sector

• Fiscal & Cost-effective Market Policy

• Institution-Building & Product Progression (Supply & Requirement Side)

• Deregulation with closer Assistance (Finance & Growth Market )

• Flow of Resources & Effective Property Market

Policy ReformsPolicy Reforms

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• Recognize subsidy-based and market-based sections and characteristics of treatments

• Complementarities

• Ensure sufficient and continual financing for both segments

• Ensure sufficient provide of area and real estate for both segments

• Market-based strategy and state/local stage plan interventions

Industry SegmentsIndustry Segments

• De-risk the area through appropriate threat mitigants both in the economical area and the actual market area (demand and provide side)

• Develop a part for the government in low earnings property, efficient with the marketplace positioning of all the segments (without conflicting)

• Develop securitisation for funding• Revisit the economical and credit system to make

sure that property gets its affordable percentage of financing from the system

• Develop recommendations so that property is able to deal fairly with other parts for sources

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Plan PrescriptionsPlan Prescriptions

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State Govt./ Builders

Banks/ HFCs/ MFIs

Borrowers

Enabling Fiscal and

Credit Policy

Enabling Land Policy

for Construction

Subsidy/Guarantee Fund/

Credit Enhancement

Land TenureFirst / Second Loss Facility

SPV Project

Individual Loans

Construction FinanceSpecialized

Funding Agency

Institutional Institutional StakeholdersStakeholders

• No Broad-brush Strategy

• Need for Segmented Intervention

• Role of Condition Government authorities & Community Agencies

• Supportive Financial & Credit score Plan

• Market/Subsidy centered Approach

• Developing impressive items and institutional procedure

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Summing UpSumming Up

• Identify land for construction• Liberalize construction finance for low income

housing• Project approach and economies of scale• Price determination – a critical consideration• Develop mechanism for Demand Registration • Tap Savings potential – building borrowers’ equity• Actively involve supply side agencies, private and

public27

Summing UpSumming Up

• Increasing stakeholders’ base

• Broadening Institutional infrastructure

• Securitisation through Govt support

• Risk Minimization Automobile

• Funding Resource and Distribution Channels

• Construction and Fund Delivery28

Going ForwardGoing Forward

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• Affordable Home Price• Affordable Credit• State Government./Municipal Systems to offer area

and infrastructure• Public/Private contractors to construct• Pricing & Credit score critical• Credit Threat Mitigation• Credit Assurance Fund

INCLUSIVE GROWTH WITH STABILITY

Conclusion Conclusion

Thank YouThank You