Absent outright grants, in most of the
world would-be entrepreneurs have no access to funding, would-be
homeowners have no access to home loans, and would-be students have no
access to loans. Is this because it is truly unprofitable to provide
financing for these potentially worthy endeavors? Or is it just that the
potentially profitable markets or instruments that could serve them do
not yet exist?
The aim of the MHH research agenda is to create financial markets where they currently do
not exist. Some examples of non-existent markets include mortgage and
other types of debt and equity markets in developing countries, stock
exchanges in the social sector, futures markets in economic development,
innovative funding instruments for disaster relief and human rights
issues, and angel and venture capital markets in the citizen sector. The
markets will in a profitable way fund entrepreneurial initiatives in a
variety of industries and sectors – for-profit and otherwise – that will
define the business landscape of tomorrow and the next century.
Syllabus for the
MHH Course Spring 2010
(Saras
Sarasvathy,
Veronica Cacdac Warnock and Frank Warnock)
MHH Research Projects
See Batten Bulletin
article
on Saras' work.
New Project:
Housing Finance in Latin America and the Caribbean: What is holding
it back?
Overview: Financial Development
Around the World
Warnock, V., and F. Warnock, 2008.
Markets and Housing Finance.
Journal of Housing Economics 17: 239-251.
This study of mortgage markets in 62 countries highlights the important
role of (among other things) deep credit information systems in the
development of housing finance systems.
Burger, J., and F.
Warnock, 2006.
Local Currency
Bond Markets.
IMF Staff Papers
53: 115-132. Featured in the
IFC Sustainable
Investor and
Interest Bearing Notes.
This study of bond markets in over 40 countries show that there is no
quick way to develop a deep bond market. It takes a commitment to stable
macroeconomic policies and an adherence to the rule of law (and laws
that protect creditors, in particular).
Scoring the Unscored: Credit Scoring for Housing Micro Lenders
While
Markets and Housing Finance
concentrated on mortgage markets (that is, collateralized home loans), a
large portion of the world's population cannot access such a loan.
Instead, they are served by housing micro lenders (HMLs) who specialize
in smaller, non-collateralized home loans. Can HMLs be profitable and
sustainable? In this current project Veronica
Cacdac Warnock and Frank Warnock are
partnering with
Development Innovations Group,
FinMark Trust, and many
lenders and government entities in South Africa to explore whether a
non-standard credit scoring system can improve the risk assessment (and,
by extension, profitability) of housing micro lenders. Updates on this
long-term project will be posted here.
Short Description
of Project:
Why Credit Scoring for Housing Micro Lenders? in
Access Housing
2007 No. 7 pgs. 6-7 (FinMark
Trust).
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