FIRST FORUM FOR PROMOTION OF POPULAR HOUSING FINANCE ORGANIZED BY FONDO SOCIAL PARA LA VIVIENDA IN EL SALVADOR

The event took place in San Salvador on the 30th of June and 1st of July of 2008.

The event started late because the President of El Salvador had to install a new Minister of Economy as we are now at 1 year of ending the actual 5 year presidential period and there are already changes that reflect the end of this Goverment....The president looked tired and seems as he needs some air(Monday morning). President Tony Saca talked for a while of the National Housing Policy and about the last housing census made last year (las one was made on 992) that has given more real data about the housing situation in El Salvador. He made a reflection about the "social function" of the Fondo Social para la Vivienda, the govermental financial institution which has been questioned by many people (a lot of opinions say that that the govermental institution Fondo Social para la Vivienda has lost it´s "social function" beeing it the most important financial institution that provides mortgages for the poor). The President stated that 9 of 10 loans have been given to people that earn 1 to 10 "salarios minimos"(1 to 10 minimum wages). Actually the minimum wage for commerce and services in El Salvador is of $158.40 per month, for the industrial sector is of $154.80 and for the agricultural sector is of $74.05 per month. The minimum wage tariff is reviewed every 3 years. Our country President said that the Social Housing Fund FSV had given 9 of 10 loans to people that earned from $158.40 a month to $1584.00 a month. The President said that in the last 4 years, 30 thousand workers had been benefited by his goverment through the Social Housing Fund (Fondo Social para la Vivienda FSV), and he said that they still have another $70 million dollars to invest in the next year (his presidential period ends in one year). He also spread the news about his visit to Mexico (Villahermosa) were he met with Mexican President Felipe Calderon were they changed the name of the "PLAN PUEBLA PANAMA" to "PROYECTO MESOAMERICA" were they asigned $33 million dollars to the Central American Bank of Economic Integration CABEI (Banco Centroamericano de Integracion Economica BCIE) and this money wll be used to build 50,000 houses in Central America.

My impression was that there were a lot of empty seats in the Forum and that this Goverment has made little, and still don´t know if they "could have done more" in regards to housing or they have done "what they could do with what they have". Goverment is going to change, so it is necessary to know what ARENA´s presidential candidate Rodrigo Avila and FMLN Presidential candidate Mauricio Funes are planning to do in the next 5 year presidential period in respect to housing. We have heard that Mauricio Funes is to build houses with a Venezuelan Bank money. True?False? We don´t yet know. The Forum was stated as a unique opportunity as all "actors" were present but my feeling is that all "pro-goverment" actors were present and the "left hand" actors of the housing sector were not represented (maybe most of the NGO´s and small financial institutions). In the Forum, 5 housing institutions were present. An interesting comment I have is that in all the whole forum I did not hear a word about long term financing for development of projects which I think is how most succesfull developers have beaten up their competition that has depended on 3 year loans to build their projects. People in the forum had various opinions about what is a house of "social interest" or what is "popular housing" and by law the Instituto Libertad y Progreso, which is in charge of certifying which housing projects are classified as of "social interest" states that "social interest" projects are those of houses or units of $15,000 dollars. The Centro Nacional de Registro of CNR, or National Registry Center were all property is registered, states that a house of "social interest" is that of a price of $28,571.43. This is important because of tax exemptions in transactions for the buyer and for the developer. The President of El Salvador also informed that the last census made last year states that there are 315,000 homes with cualitative deficit (they need floor, for example), and there is a cuantitative deficit of 44,383 houses. The formal sector or workers that have social security are 666,477 in all El Salvador and 70.9% of them earn up to 2.5 minimum wages. This is important because there is a data base of this people.

What is the situation of the loan portfolio of the Salvadorean Financial System? (includes only supervised entities. There could be one or two small but significant financial companies not supervised by goverment like "La Hipotecaria" and other builders as "Salazar Romero" which provide loans directly to clients)