Building Sustainable Housing Finance Systems: Impacts of the European Fund for Southeast Europe.

This paper presents findings of an impact study of the European Fund for SouthEast Europe (EFSF). EFSF was launched to complement direct reconstruction efforts with interventions to build effective domestic financial systems. It  aimed to support small and medium enterprises and private households through strengthening a stable and competitive banking sector, built on sustainable market mechanisms. The EFSF impact study was conducted to evaluate the development impact of the housing loan portfolio at the client/sub-borrower, partner-lending institutions (PLI) and financial sector levels. The study included a financial and product survey along with in-depth interviews to cover:

• Background of BiH and Kosovo, and rapid development of their financial sectors;
• Housing finance portfolios of PLIs created in BiH and Kosovo by EFSE financing;
• Outcomes and impacts of housing loans for households;
• Impact on the PLIs;
• Sustainable housing finance systems built by EFSE interventions in housing finance.

Study findings indicate that EFSE has contributed to establishing efficient and healthy financial institutions servicing new and growing housing finance markets. However, they are in the early stages of development and are confronted by a number of systemic and institutional challenges.