A model for low-income housing in Pakistan

September 2009

Our vision

• Healthy, happy communities across Pakistan• Affordable housing for all

• Sustainable delivery of housing

Housing

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Housing

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Housing: A Global Crisis

Slum housing as a percent of total housing stock (select cities)

Caracas, 52%

Rio, 15%

Tunis, 27%

Dar us Salaam, 49%

Karachi, 40%

New Delhi, 18%

Lahore, 35%

Typical Developments Our Developments

Most developers build houses

…we build communities

AMC innovations solve housing issues

Affordability

Market coverage

Informal

Ease of titling for the poor

Quality and infrastructure

Formal AMC

• Low cost, <30% monthly income

• Flexible financing*

*Loan amount for all construction costs available at 15% effective interest rate over 15 years

• Appropriate stock for majority of housing demand in Pakistan

• Safe, easy process of securing property title

• Masterplan with int’l environmental and construction standards

Feedback from customers

“After years of living in a physically abusive environment with my brothers and their families, I am now able to afford an independent home on a minimum wage salary”

Muhammad AkramSecurity GuardMonthly income: PKR 6000

“With two mentally retarded daughters, I used to often worry about where they would go after I die. After 20 years of paying rent, my dream of a secure future is a reality”

Naveed AhmadDriverMonthly income: PKR 10,000

June 2007

Kala Shah Kaku

•12 KM from Lahore

•3 KM off GT Road

•20-acres

June 2008

June 2009

Today: (2 years from start)Continuous Improvement by the Community

•Over 65% plots sold

• Nearly 1000 active residents, with many more in process of moving in

• Mosque, schools, commercial area, income generation and community development programs available

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How do we do it?

Provide flexible financing

For-Profit Sustainable Venture

Understand the true nature of demand

Filter for speculators

Focus on low-cost land and pre-development

Treat people as customers

Build communities, not houses

Sell premium lots

Product

3 Room

Includes •water & sewer

•electricity •roads

•community infrastructure

N/A Rs 2820 Rs 3540 Rs 4760Monthly payment*

*Loan amount for all construction costs available at 15% effective interest rate over 15 years

1 Room 2 RoomPlot only

Rs 80,000

Rs 255,000

Rs 320,000

Rs430,000

Our Homes

Our Senior Team has >35 years experience

Jawad Aslam, Chief Executive Officer•MBA graduate (USA) •12 years of work experience•4 years in low income housing in Pakistan

Amjad Awan, Chief Marketing Officer•MBA graduate (UK) •18 years leading organizations in Pakistan•Most recently heading the main CNG rickshaw company in Pakistan

Saad Irfani, Chief Financial Officer•Graduate (USA)•Over 5 years of investment banking and consulting experience (USA)

Housing

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Our Investors

Team

Housing

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•USD 90 million non-profit venture capital fund that addresses poverty through market-based solutions

•US based

•USD 40 million for-profit social venture capital fund that supports social enterprise globally

•Geneva based

•First commercial financial institution to systematically extend mortgages to lower income people at Khuda-Ki-Basti Lahore.

•Partnering in future projects.

Under consideration

Deutsche Bank, World Bank, Soros Economic Development Fund, Aman Foundation, Grey Matters Capital, PPAF, Cities Alliance

Our Advisory Board

Zubyr Soomro – Acumen Fund Representative. Former Citibank Pakistan head

Tasneem Siddiqui – Chairman of Saiban

Nadeem Hussain - CEO of Tameer Microfinance Bank

Babur Rafiq – Managing Director of Levis Pakistan

David Kyle – CEO of School Finance Company; Former COO of Acumen Fund

Adnan Asdar – CEO of Pakistan’s leading project management company

Zaighum Rizwi – Housing Finance Consultant, World Bank

Housing

Public-Private Partnership Structure

PrivateInvestors

Private Limited Company:

Low Income Housing Project 1

AMC

• 51% Ownership

Finance land and infrastructure Punjab Land Development

Company• 49% Ownership

Finance Home Construction

Mortgage Company

ProfitsProfits

A Typical Development

Land size 120 acres

Housing units 3,000

Project Duration 3 years*

Government of Punjab investment

PKR 100M

Private Investment PKR 100M

Mortgage Lending Institution

PKR 720M

Financial Return 15%

Lives Directly Impacted

20,000

*From the time of land purchase and approvals

Way Forward…

Create a corporate structure that provides:

– Transparent regulatory framework

– An acceptable platform for private sector investors

Private Sector Requirements

• Corporate structure required

• Minimal government involvement in operations

• Well defined regulatory framework

• Clearly identified roles and responsibilities

Establish the Vehicle

– Formation of Punjab Land Development Company• A for profit company registered under SECP• Paid up capital of PKR 200 million by the Government of

Punjab– Execute detailed study– Finance first project

• Appointment of Board

– First low cost housing project inauguration – 100 days from release of funds

Punjab Land Development Company (PLDC)

– Approval of Board and Management

Khalid Rafique (Chairman/CEO) Nadeem Babar

Shaukat Ellahi Chairman PIEDMC

Ibrahim Qureshi Amjad Riaz (ACE)

Dr. Tahir Masood Pervaiz Qureshi (Unicon)

Alman Aslam Zafarudin Mehmood

Balighur Rehman MNA Kh. Imran Nazir MPA

Secretary HUDD Secretary Finance

SMBR

PLDC shall …

– Create a regulatory framework for each development

– Devise mechanisms for partnerships and JVs with 3rd parties

– Follow strategic planning for scaled development

– Formulate standards for agreements with developers

– Define a monitoring and supervisory system

– Put in place a community management program and ensure its sustainability

Thank you