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Thematic Area:

Affordable Housing Finance


2016 - 2018 


National Mortgage Company / Kreditanstalt für Wiederaufbau (KfW)


Turkey, Caucasus & Central Asia

Country Coverage:           


Project Overview

Although the housing financing market in Armenia has gradually improved during the past years, the range of housing loan products has remained limited. Financial institutions were particularly reluctant to offer housing loans in rural areas. In addition, housing loan products to finance Energy Efficiency investments were missing despite the long-term trend of increasing energy prices.

The German and Armenian Governments agreed to finance a Housing Finance Programme Phase IV to address these issues. KfW channelled EUR 20 million (in local currency) to the National Mortgage Company (NMC) for its on-lending to ten Partner Financial Institutions (PFIs) with technical assistance (TA) carried out by Frankfurt School.

The objectives of the TA ensure: 1) the smooth implementation of the program (coordination with other programs, selection of PFIs, adaptation of internal NMC regulations for the new products); 2) the creation of institutional knowledge and capacity within the PFIs to offer the new loan products; 3) the smooth development and implementation of two new housing loan products (rural and energy efficiency (EE)); and, 4) awareness of the Armenian population for EE investments and knowledge about the role of NMC to refinance housing loans.

Under the TA of the Project, the Frankfurt School expert team developed six new housing products. These products were grouped into two categories – EE housing (EE home renovation, EE home purchase and EE home construction) and Rural Housing Loans (home renovation, home purchase and home construction). To assess the eligibility of EE home purchase and EE home construction loans, Frankfurt School´s technical partner developed appropriate EE assessment tools. The assessment of EE renovation loan eligibility was based on existing materials and technologies.

To increase the supply of housing loans in rural areas, Frankfurt School experts recommended including some features in the existing Rural Loan products of the PFIs. These features are not mandatory for implementation by PFIs, but rather serve as options that the PFIs may use to refine their products and make them more attractive/competitive.

In addition, Frankfurt School team assisted NMC in PFI selection, development and implementation of the PFI financing scheme as well as the EE product marketing, etc. Frankfurt School trained more than 150 people (both NMC and PFI staff) on the Programme specifics and general housing EE.