Areas of Expertise
NewLine is a housing finance specialist, with broad expertise in mortgage finance advisory, low income housing finance, project development for housing and infrastructure construction, as well as fostering capital investment opportunities with local financial institutions looking to expand housing, infrastructure and mortgage finance operations in emerging markets. NewLine has designed national affordable housing programmes, working with financial institutions, developers and government to bring together all the pieces and enable scaled delivery of affordable housing. NewLine has advised IFIs and financial institutions in the development and augmentation of their mortgage lending and housing finance programs and works directly with local banks in developing affordable housing loan products. NewLine works with the MFI sector to help develop the micro housing finance segment looking to assist underserved communities in early stage markets.
International Finance Institutions, Local Banks and NBFIs
NewLine seeks to work with local banks at an early stage to foster economic opportunity and growth. Often supported by IFI investment or technical support, locally-based financial institutions can provide local currency finance that is responsive to the market conditions and is adaptable to borrower needs. Improved participation by local banks can provide opportunities for local enterprises (whether financial, small corporate or NGO) to move to scale: when one bank manages successfully to lend into a new market segment, others will seek to follow the successful strategy. Historically, local banks in many emerging market economies have been conservative and risk-averse. Although this is changing gradually, many established local banks have limited experience supporting innovative lending and associated risk management, new product development and delivery mechanisms and product extension into lower income segments. NewLine can advise banks on effective innovation to achieve broader market penetration.
Public Private Partnerships for Social Impact Solutions
Making finance available and developing affordable financing programmes for lower income populations requires government and private sector participants to work together. This is particularly important in the area of affordable housing. NewLine seeks to work with both public and private stakeholders – local banks and other financial institutions, key government partners and NGOs – who must all play a coordinated role in bringing scaled solutions to social problems, making use of both local and international capital markets. NewLine has designed affordable housing and infrastructure programmes at both local and national level that seek to bring these different groups together with the goal of delivering innovative, scaled solutions from both financial institutions and government partners.
Innovative Digital Delivery
As electronic technology develops, and new money movement and delivery channels are established which compete with local banks, conventional bank infrastructure is looking increasingly costly and inflexible. Lower transaction costs can facilitate expanded access for a broader lower income population segment as smaller sized transactions can be contemplated. NewLine provides support for institutions (private or public sector) seeking to expand in their local markets in partnership with local banks, from wholesale funding to partnerships to acquisition. Partnerships between new NBFIs and local banks can open markets and allow new institutions to reach scale more quickly.
NewLine has considerable expertise in arranging structured debt financing for local financial institutions in emerging markets. Our experience in analyzing pool performance data over many years in multiple markets, and our knowledge of risk appetites, positions NewLine well to advise and arrange structured debt financings for local institutions seeking access to incremental funding. Whether a local bank looking to diversify its funding sources, or new age digital delivery enterprise seeking funds to on-lend, structured debt provides a lower risk option for the debt provider and so creates greater availability and improved pricing.
NewLine has successfully designed and implemented guarantee programmes that have stimulated lending from local banks to low income and informally employed populations, often for the first time. In developing markets, guarantee vehicles can be an excellent tool to stimulate lending from local institutions to underserved population segments. When structured and delivered correctly, guarantees can provide a capital-efficient means by which to increase financial access. However, underlying financial principles must not be overlooked when evaluating the provision of a guarantee, since capital is as easily lost from a guarantee as from an investment.