Morocco - Housing Loan To Credit Immobilier Et Hotelier Project

Docmnt of The World Bank FOR OCMCIAL USE ONLY NO t M. Ila] (.' Ib MOPh i v P ( i-t0h ReportNo. 10154 'It E)I.JC E / X 1Y ''l 'f,i7 / T 9V /' : ),'' o i . PROJECT COMPLETION REPORT KINGDOM OF MOROCCO FIRST HOUSING LOAN TO CREDIT IMMOBILIER ET HOTELIER (CIH) (LOAN 2245-MOR) NOVEMBER 27, 1991 Infrastructure Operations Division Country DepartmF.nt II Europe, Middle East and North Africa Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURENCY EQUIVALENTS Currency - Dirham (DR) (As of December 1982 Appraisal Report) US$1 - 6 Dirhams 1 Dirham - 0.167 US$ Average Exchanze Rate during Prolect Implementation 198311989 US$1 - 8.47 Dirhams 1 Dirham - 0.118 US$ Note: All values in US$ equivalent are computed at the Average Exchange Rate GLOSSARY OF ACRQNYMS General CDG - Financial Intermediary for Deposits and Management (Caisse des Depots et de Gestion) CGI General Real Estate Company (Compagnie Gen6rale Immobili6re) CIH - Real Estate and Hotel Finance Company (Credit Immobilier et Hotelier) ERAC - Regional Development and Construction Agency (ttablissement Regional pour l'am6nagement et la construction) MHAT - Ministry of Housing and Land-Use Planning (Minist&re de 1'Habitat et de l'Am6nagement du Territoire) VIT - Total real estate value (Valeur lmmobilibre Totale) CIH Lending Products ANP - Mortgage loans for the purchase of new housing units built by Developers CNP - Mortgage loans for self-help construction HBM - Low and moderate-cost housing (Habitat a Bon March6) OCF - Construction loans for commercial facilities OCH - Hotel construction loans OPF - Housing construction loans (for sale) to Developers OPL - Housing construction loans (for rental) OPVT Land development loans OTT - Loans for tourism facilities FISCAL YEAR January 1 - December 31  THE WORLD BANK FOR oFc USE ONLY Washington, D.C. 20433 U.S.A. Offce nE Diocto,-*Ctwua Opetatlms ~yiWtYk)f December 4, 1991 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT:- Project Completion Report on Morocco First Housing Loan to Credit Immbclier et Hotelier (CIH) (Loan 2245-MOR) Attached, for information, is a copy of a report entitled "Project Completion Report on Morocco - First Housing Loan to Credit Immobilier et Hotelier (CIH) (Loan 2245-MOR)" prepared by the Europe, Middle East and North Africa Regional Office with Part II contributed by the Borrower. No audit of this project has been made by the Operations Evaluation Department at this time. Attachment I This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  FOR OFFICIAL USE ONLY PROJECT COMPLETION REPORT KINCDOM OF MOROCCO FIRST HOUSING LOAN TO CREDIT IMMOBILIER ET ..OTELIER (CIH) (LOAN 2245-MOR) TABLE OF CONTENTS Page No. Preface o.ovoo, .............i Evaluation Summary ........... .................... 0................. i Part I. Project Review from the Bank's Perspective ........* ..... .. 1 A. Background . ......... . . .... .. . . .... 1 B. Project Objectives and Description ... ... 3 C. Project Design and Organization .....*# ........... 4 D. Project Implementation ... .... . .. . . ..... 5 E . Proj ect Achievements .... . ..................... .............. 7 F. Project Sustainability .......... ... ...... . 8 G. Bank Performance .........* ... .... .......................... 9 H. Borrower' s Performance ... . ........ ... 9 I. Relations Established within the Project .................... 10 J. Consultant Services ... . ....... . ... ............ 10 K. Documentation and Data Pertaining to the Project ............ 11 Part II. Project Review from the Borrower's Perspective ......... .... 12 Part III. Statistical Tables Table 1: Related Bank Loans and/or Credits ...................... 22 Table 2: Project Timetable ......... .. .... ... .. ........ 22 Table 3: Loan Disbursements ..... .. . .. ..................... . 23 Table 4: Project Implementation ................. 24-25 Table 5: Projects Costs and Financing ...... * .............. 26-28 Table 6: Projects Results ............... ........... .... 29-31 Table 7: Status of Covenants ..................... . .......... 32 Amendment to the Loan Agreement ....................... 34 Bank Inputs ............. . ............... . ...35-36 Missions ...................... *......... 0.............. ..... 36 Annexes 1. Listing of sub-loans eligible under Loan Agreement (5 pages) 2. C.I.H. Summary of Commitments and Disbursements (4 pages) This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  PROJECT COMPLETION REPORT KINGDOM OF MOROCCO FIRST HOUSING LOAN TO CREDIT IMMOBILIER ET HOTELIER (CIHI) (LOAN 2245-MOR) PREFACE This Project Completion Report describes the preparation, appraisal, and implementation of the Third Urban Development Project in Morocco, for which Loan 2245-MOR in the amount of US$60 million was signed on April 11, 1983. The project became effective on August 30, 1983 and closed on December 31, 1989, as originally planned. The loan account remained open until January 29, 1990, at which time the loan was fully disbursed. The Preface, Evaluation Summary, Parts I and III of the PCR were prepared by the Infrastructure Operations Division, Country Department II of the Europe, Middle East and North Africa Regional Office. The Borrower, the Real Estate and Hotel Finance Company (CIH), has submitted Part II of the report on September 1991. The report was based on, inter alia, the Staff Appraisal Report, the Loan and Guaranty Agreements, supervision mission and reports, correspt Adence between the Bank and the Borrower, and internal Bank memoranda.  ii KINGDOM OF MOROCCO FIRST HOUSING LOAN TO CREDIT IMMOBIUER ET HOTEUER (CIH) (LOAN 2245-MOR) PROJECT COMPLETION REPOR, EVALUATION SUMMARY Intreduglo! 1. Thifr operation was a pilot project, as it was the first time the Bank had financed an urban development operation through a line of credit granted to a financial institution. Before 1981, when the project was identified, assistance to the sector had been accomplished through lending directly to the Government. The line of credit approach to promoting the development of affordable housing was necessary because the Government had to minimize its financiog of low- and moderate- cost housing in the face of severe budgetary constraints. It was judged a viable apprcach since there was already a sound financial institution in place. At the time, the Real Estate and Hotel Finance Company (CIH) was the country's only financial institution granting long-term home mortgage loans. CIH was also well known to the Bank, which had previously granted it four loans for the development of the tourist industry. Prolect Oblectives and ImRlementation Experience 2. The project's main objectives were to: (a) encourage public and private developers to pr>-7uce housing programs accessible to households whose incomes were lower than the median income, estimated at US$330 in 1982; and (b) develop CIH's car-city to evaluate programs to finance low-cost housing and advise developers on the technical and financial aspects of their subprojects. 3. ITine of Credit. A line of credit in the amount of US$59 million financed low-income housing development programs according to technical and financial criteria defined during appraisal. Two design flaws contributed to difficulties in disbursing that line of credit. First, the technical criteria were too rigorous, as four fully defined sub-categories did not allow for sufficient flexibility in programs involving both eligible housing in the different sub-categories and non- eligible housing. Second, the selling price ceiling imposed on eligible housing was too low, because, on the one hand, potential savings by beneficiaries were underestimated, and on the other hand, advantages conceded to eligible housing also applied to other low-cost units whose criteria, such as a higher selling price ceiling, were more flexible. In addition, the guarantees, notably on land titles, which CIH requested for the allocation of construction loans, made some eligible programs impossible to finance. Interest rates at 14% and 15% applied to medium- term developer loans were high compared with the local prime rate ranging from 9% to 11% during the project period and prevented private developers from keeping selling prices below the ceiling set by eligibility criteria. It was, therefore,  iii necessary to amend the Loan Agreement seven times to allow for a modification of the categories of subloans eligible for the highest rate, as well as for a postponement of deadlines for the commitment and withdrawal of funds. CIH took a number of initiatives to accelerate the commitment and withdrawal of loan proceeds, including the transfer of developer loans to the beneficiaries, i.e., consolidating mortgage loans of housing units before completion, and the introduction of new lending products, such as two- or three-storey units, which the owners partially occupy leaving the rest for rental activities. 4. CIH's Financial and Technical Capacity. CIH underwent a complete reorganization in July 1984. This entailed the decentralization of responsibilities, a modification in the tasks of the central services, and the redeployment of staff. It resulted in file transfers to Loan Officers who did not follow up on project implementation nor receive the requisite computerized data-processing training. In addition, the consultant in charge of developing a computerized data base for CIH proposed a system that was too complex. CIH had conside.able difficulty using it and later had to seek a more viable model. Instead of building up its capacity to evaluate the technical viability of the projects it finances, CIH rely on the ability of the architects and engineers hired by the developers. This permitted CIH's management to place greater emphasis on financial and commercial aspects. Prolect Achievements 5. The project sustained the pace at which low- and moderate-cost housing construction loans were granted when the Government was rapidly reducing its support. However, it was less successful in increasing the number of subloans for core units and other unfinished housing construction and for land development intended for low- income households. 6. Between 1984 and 1989, CIH granted about DH 900 million (US$100 million equivalent) in long-term mortgage loans for self-help construction and low- cost housing. During the same period, the project contributed towards the financing of 15,479 housing units, for which CIH granted loans totalling DH 894 million. It supported subprojects whose total real estate value per housing unit ranged from DH 80,000 (US$9,500 equivalent) to DH 150,000 (US$17,700 equivalent). Clearly, the project helped finance important social programs. 7. During project implementation, CIH underwent transformation from a specialized financial institution into a universal bank. It now manages individual and corporate accounts in addition to its housing and tourism loan portfolio. It continued, however, to benefit from special tax and resource mobilization arrangements (e.g., Value Added Tax exemption on interest, obligatory bonds subscribed by commercial banks), which are now being revised under the Proposed Financial Sector Adjustment Loan approved by the Board in June 1991. ProleSC Sustalnabilty 8. It is difficult to evaluate project sustainability at this time. Developer programs, which were launched in 1988, will be not completed until two to three years after the initial release of CIH funds. The total disbursements made on long-term mortgage loans during the project period were comparable to the  iv aggregate of short-term loans tc developers. The financial return is even higher since the selling prices have generally risen beyond expectation, as developers took advantage of market conditions to increase their margin. The follow-on Second Housing Finance Project (Loans 3121-MOR and 3122-MOR), which is now fully committed, has continued to enhance access to home ownership and improve housing conditions for low-incozue groups, while rationalizing the structure of the housing finance sector, further strengthening CIH's operations, and improving the delivery of land and housing delivery processes. Findings and Lessons Learned 9. Project experience illustrates the following: - The full value of Bank assistance to a sector or subsector is greatly enhanced when Bank loan proceeds are made through financial intermediaries capable of subproject appraisal and supervision. Such capability frees Bank staf,. from having to scrutinize minute details, allowing thc--, instead, to focus on broader institutional and sectorial issues. - The process by which developer loars were transferred to the beneficiaries, as soon as the down payment was made, reduced the developers' loans and financial burden. Developers could then pass on those savings to beneficiaries in the form of relatively lower final selling prices. - To maintain a satisfactory loan disbursement rate, the Bank must allow the Borrower to apply more flexible technical and other eligibility criteria to the refinancing of subprojects, especially when the project is a pilot scheme.  KINGDOM OF MOROCCO FIRST HOUSING LOAN TO CREDIT IMMOBIUER ET HOTEUER (CIH) (LOAN 2245-MOR) PROJECT COMPLETION REPORT PART 1: PROJECT REVIEW FROM THE BANK'S PERSPECTIVE  KINCGDOM OF MOROCCO FIRST HOUSING LOAN TO CREDIT IMMOBILIER ET HOTELIER (CIH) PROJECT COMPLETION REPORT PART 1. PROJECT REVIEW FROM THE BANK'S PERSPECTIVE Project Name: Third Urban Development Project Loan Number: 2245-MOR Loan Amount: US$60 million RVP Unit: EMENA Country: Morocco Sector: Urban Development Subsector: Housing A. BACKGROUND 2.01 When the project was idetitified in 1981, 44% of the Moroccan population lived in urban areas and this proportlon has increased annually by 5%, i.e. 500,000 to 600,000 inhabitants, while 20% of the urban housing stock continued to be composed of slums. According to estimates, 30% of the urban population lived in informal housing units, of which 35% to 40% had incomes below the poverty level. Before 1981, the Government's traditional response to the urban housing shortage had been to encourage public agencies to move into two key areas: (a) Rroduction of serviced land mainly for housing accessible to low- and moderate-income families. The Ministry of Housing and Land-Use Planning (MHAT) had been in charge of this program, for which a special fund was established in 1973. This fund was supplied by a turnover allocation of DH 6 million provided by the national budget as well as down payments from plot buyers. Some 113,000 plots were produced, which satisfied only about 10% of the demand and led to the depletion of the special fund. This was due to the highly subsidized selling price of the plots and the low repayment of the selling price by the beneficiaries; and (b) Droduction of core housing units targeted at households with incomes less than USS170 per month. MHAT has produced about 19,000 such units since the program started in the early 1970s. In addition, 16,000 low-cost units were produced during the 1970s by: (i) the Regional Development and Construction Agencies (ERACs), established in 1974 with a total working capital of  -2- US$5 million and supplied through a Government grant; (i.i the General Real Estate Company (CGI), affiliated with the Financial Intermediary for Deposits and Management (CDG); and (iii) other small public agencies. 2.02 The private sector, which had built 90% of the housing supply, was nonetheless limited to individual, or self-help, construction, mainly aimed at higher than median-income families. It was unable to produce serviced land at affordable prices, due to the difficulties in obtaining permits and financial support. At the same time, Government-funded housing programs for lower-income groups were impaired by wcak MHAT implementation capacity, lengthy admitistrative procedures, and the escalating cost of housing units produced by the public agencies in the face of increasing construction standards. Typical ERAC units cost more than US$16,700 (1982 prices) and became less affordable to the target group. 2.03 During the same period, Morocco's macro-economic situation had worsened, and public funds could no longer fully support the production of low- income housing. The situation was characterized by: (a) a fast growing external debt generated by an earlier ambitious investment program, launched when export prices, in particular for phosphates, declined and the price for imported oil increased causing a trade imbalance. In 1982, the external debt service increased from 10.7% of total exports in 1977 to 35%, or US$1.5 billion; (b) the adoption, by the Government, of a two-year Stabilization Plan 1978/80 with rigorous credit and import controls, as well as a fairly rigid program of budgetary expenditure reduction resulting notably in a decline in investments from 27% of the GNP in 1977 to 12% in 1980; (c) endogenous factors (e.g., drought, military expenditures, heavy increases in subsidies for commodities) and exogenous ones (e.g., appreciation of the US Dollar, increase in the price of oil and interest rates), combined with the effects of the Stabilization Plan. In 1981, this resulted in a decline in GNP by 1.3%, a cash flow deficit reaching 14% of GNP, and a balance of payments deficit equal to US$1.8 billion, or 12.6% of GNP; and (d) the International Monetary Fund's intervention, in April 1982, within a proposed assistance agreement involving fiscal measures and restrictions on expenditures. 2.04 In 1981, to improve the deteriorating situation of the housing subsector, particularly regarding the access of the urban poor to affordable housing, the Government decided to encourage (a) formal private construction through legislation providing for substantial tax exemptions for private developers and (b) the Real Estate and Hotel Finance Company (CIH), the country's only institution, at that time, granting long-term home mortgage loans, to channel financial resources  to low-income groups. The Government, therefore, allocated the bulk of public funds earmarked for low-cost housing to CIH for mortgage loans with 7Z and 8X interest- rate subsidies. At the same time, it authorized CIH to mobilize a greater share of the financial market through the sale of long-term bonds to the other banks. CIH's total domestic borrowings increased more than threefold from DE 1.8 billion in 1981 co DH 5.8 billion in 1988. 2.05 The Bank had previously participated in the urban sector through the firnancing of two projects aimed at upgrading squatter areas, developing plots for low-cost housing construction, improving access to public services, and increasing institutional capacity. Even though considerable improvement occurr.3d during their implementation, the two projects fell short of expectation. Inadequate provision of counterpart funds led to substantial delays in project implementation. 2.06 To bolster Government initiatives in requesting that public agencies focus on the production of units with lower standards and in fostering the private sector production, the Bank shifted its sector lending strategy. It decided to accommodate ics first housing finance project through the intermediation of the only financial institution equipped, at that time, to channel resources to low-income households for housing. In addition, the Bank stressed the need to provide technical expertise to public and private developers to ensure their adherence to low-cost design. B. PROJECT OBJECTIVES AND DESCRIPTION 3.01 The project's main objectives were to: (a) encourage public and private developers to produce housing programs accessible to houtseholds whose monthly incomes were below the median income, estimated at US$330 in 1982; and (b) develop CIH's capacity to evaluate low-cost housing programs and advise developers on the technical and financial aspects of their subprojects. 3.02 The project consisted of: (a) a line of credit in the amount of US$59 million to low-income finance housing according to technical and financial criteria defined during appraisal; and (b) a technical assistance program for CIH for which the loan provided financing in the amount of US$1 million. 3.03 The line of credit was envisaged to finance: (a) construction loans to developers in the amount of US$56 million for different types of housing from unfinished two-room units whose  -4- selling price did not exceed US$5,300 to apartment units priced at a maximum of US$13,300; (b) loans for individual construction and plot development for which selling prices did not exceed US$30 per m2; and (c) the consolidation of loans granted to housing and plot developers, during the construction period, into mortgage loans to buyers whose monthly income did not exceed US$330. The above prices were revised annually to take inflation into account. The programs had to comply with technical, economic', and financial2 criteria. 3.04 The technical assistance component was envisaged to finance: (a) the de'elopment of a land-use model; (b) a computerized management information system; and (c) a study on the development of the housing construction industry in Morocco. C. PROJECT DESIGN AND ORGANIZATION 4.01 This was the first time the Bank helped finance an urban development project through a line of credit granted to a financial institution. This new approach to project design was justified because: (a) budgetary constraints obliged the Government to minimize its financing of low- and moderate-cost housing; (b) as a financial institution, CIH was well known to the Bank, which had previously granted it four loans3 for the development of the tourist industry; and (c) since its creation, CIH had supported the housing subsector, by granting long-term home mortgage loans. 4.02 Inasmuch as the Bank considered this project to be a pilot scheme, it limited the loan amount, at first, to US$45 million. The Bank later agreed to increase it to US$60 million. I/ Minitm ERR of 12X LI Mlnimun IRP of 13X for programs whose cost exceeded US$500,000. LI First through Fourth Hotel Development Projects fLoans 704-MOR, 847-M0R, 1279-MNR, and 1943-MOR).  4.03 Project preparation was carried out under the following conditions: - Sensitization training of private developers, organized by CIH, made it possible to identify subprojects that would become eligible following certain program modifications. The developers recognized the commercial benefits to be derived from the programs, inasmuch as they enabled low-income buyers to benefit from mortgage loans under highly attractive conditions (20 years' maturity with interest- rate subsidies of 7% or 8%). Public developers whose budget-allocated resources were no longer available had no choice but to borrow from CIH. - Publicity campaigns, aimed at individuals and launched by CIH, encouraged the financing of self-construction through the line of credit. - The Government entrusted CIH with the management of a special account to finance its important slum upgrading program. 4.04 However, two design flaws contributed to difficulties in disbursing the line of credit: - The technical criteria were too rigorous. Fully defined sub- categories did not leave the flexibility required to take into account "mixed programs" (i.e., those involving both eligible housing with interest below market rates and longer maturities than for commercial lending activities and within a range of different sub-categories and non-eligible housing). - The selling price ceiling imposed on eligible housing was too low, since it overlooked potential savings by beneficiaries, the advantages applied to other low-cost units (HBM)4 whose criteria, were more flexible. D. PROJECT IMPLEMENTATION 5.01 During the first year of effectiveness, the following difficulties were experienced: - The consultant in charge of developing a computerized data base, intended for the appraisal of developers' programs, got behind schedule. He also proposed such a complex data bank, which CIH had considerable ditficulty in using, that in 1985, CIH had to seek the direct assistance and advice of the software designer on a more A/ Habitation Bon Masch (HEMM) refers to Government interest-rate subsidiep applied to housing units meeting certain criteria favoring low-income households.  -6- viable option. The guarantees, notably on land titles, which CIH requested for the allocation of construction loans, made some eligible programs impossible to finance. This was the case for the programs under the public Military Housing Administration (OLM), the private Moroccan Fishing Company (OMP), and some municipalities. As for the ERAC programs, it was necessary to wait for an agreement to be reached between CIH and the Government agency in charge of land titles. The reorganization of CIH's services in July 1984 entailed the decentralization of responsibilities and the modification of the tasks to be carried out by central services. It resulted in file transfers to Loan Officers who had not followed up on project implementation nor received computerized data-processing training. The interest rates at 14% and 15% applied to medium-term developers' loans were high compared with the local prime rate ranging from 9% to 11% during the project period and prevented private developers from keeping their selling prices below the ceiling set by eligibility criteria. The HBM price ceiling authorized by the Government after the loan effectiveness date increased from DH 130,000 to DH 150,000 per unit, while the selling price ceiling of an eligible unit under the present loan was limited to DH 100,000. 5.02 The following measures were taken to improve the pace of the commitment and withdrawal of loan proceeds: CIH transferred developer loans to the beneficiaries as soon as down payments were made, eligibility for mortgage loans determined, and final sales contracts with a binding price established. This process enabled developers to reduce their outstanding loans and financial burden, thereby passing on to the beneficiaries a lower final selling price. The disadvantage is the implication that the beneficiary began servicing the debt before having access to the housing unit. CIH finalized new lending products, such as the "R+1, R+2" option, for two- or three-storey construction, in which the owner occupies one floor, freeing the rest of the unit for rental activities (e.g., other families, stores, workshops). CIH improved the efficiency of its organizational structure by creating two central directorates (production and network) with a view to expanding loan activity and increasing its resource mobilization through deposits. The Bank agreed to let CIH apply more flexible technical criteria and finance such subprojects as commercial shops and other artisanal activities.  Seven amendments to the Loan Agreement and two amendments to the Guarantee Agreement also permitted an increase in loan disbursement rates, a modification of the categories of subloans eligible for the highest rate, and a postponement of deadlines for the commitment and withdrawal of furnds. Modifications to important sections of the initial Agreements did not, however, fundamentally alter the project's main objectives. E. FROJECT ACHIEVEMENTS 6.01 The project maintained the pace at which low- and moderate-cost housing construction loans were being granted in the face of the severe budgetary cutbacks. Between 1984 and 1989, CIH granted about DH 900 million (US$100 million equivalent) long-term mortgage loans for self-help construction and low-cost housing. During that same period, the project contributed towards the financing of 15,479 housing units, for which CIH granted loans totalling DH 894 million to households with monthly incomes below the median income varying from DH 2,000 or US$330 in 1982 to DH 3,000 or US$350 in 1989. It supported subprojects whose total real estate value per housing uniit ranged from DH 80,000 (US$9,500 equivalent) to DH 150,000 (US$17,700 equivalent) depending on the reference year. Disbursements were made on the basis of developer prefinancing (OPF) releases. Clearly, this project has helped finance important social programs, even though in 1986, the interest-rate subsidies for long-term mortgage loans decreased from 7% and 8% to 4% and 5%, making units less affordable to low- and moderate income households. Unfortunately, the project did not succeed in increasing the number of subloans for core units and other unfinished housing construction and land development intended for households whose monthly income was US$200 (30th percentile or less in 1982). 6.02 The project also helped CIH improve its financial position significantly. Tht following figures, extracted from CIH's audited financial statements, show that, by increasing its income and assets three to four times during project implementation, CIH has become one of the strongest banks in Morocco. Current Value in DH Million 1981 1989 Balance Sheet 3,000 11,442 Total income 300 1,291 Total equity 226 987 Profit before taxes 51 130 Sources of funds: 1,216 4,800 of which - internal 424 2,362 Equity/Risk Assets Ratio 3 8 6.03 As of December 31, 1988, CIH's housing portfolio represented 67X of its total portfolio (DH 4,676 million out of DH 7,097 million) of which 1/5 was the mortgage portfolio supported under the project. Arrears in principal and interest amounted to less than 2% of the housing portfolio. Arrears on commercial loans to  - 8 - Developers (DH 49 million) present no special risks, since these loans are secured by mortgage on land and development plus collateral on the Developer's other assets. CIH: Loans in Arrears of Principal and Interest over Six Months, 1984-1988 (DH Million) 1984 1985 1986 1987 1988 Housing Loans 41.7 42.7 53.3 59.1 73.8 Hotel and Tourism Loans 88.1 102.2 126.7 192.7 218.0 Commercial Loans (Developers) 26.4 53.7 44.7 47.2 49.0 Total Arrears 156.2 198.6 224.7 299.0 340.8 As % of Total Loans 46% 5.0% 4.5% 5.1% 4.8% Housing Arrears As % of Total Arrears 26.7% 21.5% 23.7% 19.8% 21.7% As % of Housing Loans 1.9% 1.7% 1.8% 1.8% 1.9% Provisions for Arrears 116.2 137.0 148.9 157.0 196.2 As % of Arrears 74.4% 69.0% 66.3% 52.5% 57.6% Table 4 of Part III of this report indicates that CIH financial performance indicators have been in accordance with the projected figures in the Staff Appraisal Report. 6.04 The technical assistance component improved CIH's capability to assess the technical viability of subprojects. It included the computerization of CIH's lending program, staff training, and the development of a sound data base related to local market and construction costs. Technical assistance was also instrumental in helping CIH transform from a specialized financial institution into a universal bank by enabling it to manage individual and corporate accounts in addition to its housing and tourism loan portfolios. On December 31, 1989, through its 25 agencies, CIH handled 17,000 deposit accounts totalling DH 625 million. The value of its outstanding loan portfolio increased from DH 3 billion at the end of 1983 to over DH 7.5 billion at the end of 1989. F. PROJECT SUSTAINABILITY 7.01 It is difficult to evaluate project sustainability during the year following the closing date. Developer programs, which were launched in 1988, are being completed within two to three years following the first release of the funds.  However, the total disbursement made on eligible long-term mortgage loans during the project period was comparable to the aggregate of short-term loans to developers. The financial return on these programs is even higher since the selling prices have generally risen beyond expectatiorn, as developers take advantage of market conditions to increase their margin (see para. 6, Part III). 7.02 During the course of project implementation, CIH granted eligible long-term loans for which equivalent amounts were financed from the Bank loan (para. 6.01). Partial cancellations on some subproiects have been compensated by increases in other subprojects. It was, therefore, necessary to show that CIH had used Bank funds in accordance with the legal criteria (Annex 1). In effect, developers programs financed under the Bank loan have since been transformed into a viable long-term mortgage loan program benefitting less than median-income groups. Sustainability can be attested by the overall good performance of CIH's mortgage loan portfolio, in which arrears are less than 2X. G. BANK PERFORMANCE 8.01 The Bank's main strength was its flexibility in adapting the changes in the loan agreement which facilitated disbursements of the loan proceeds. The project showed that lines of credit to specialized financial intermediaries for housing could be economically justified when the Bank loan is made to a creditworthy institution. 8.02 The Bank's main shortcoming was the inflexible way in which it initially imposed subloan eligibility criteria. This issue was, however, addressed in preparing, appraising, and negotiating a second housing loan to CIH under the Second Housing Finance Project (Loan 3122-MOR). 8.03 At the time of appraisal, the project faced two major obstacles. First, CIH was the only financial institution that could grant long-term loans to the housing subsector. It later bore the full financial burden, except for the foreign exchange risk, incurred through implementing a pilot project in which subloans were for relatively small amounts and only marginally profitable. Second, CIH specialized in financing Government-sponsored programs in housing and tourism development. Therefore, CIH's portfolio gave the appearance that it was enhanced by hotel loans and Government transfers to subsidize hotel construction and low- income housing. It also gave the impression that the Government favored CIH over the other financial institutions when, in fact, chronic Government arrears in payments to CIH added significantly to CIH's financial burden. It was CIH, rather than the financial sector, that was disadvantaged. To mitigate this situation, the Bank has supported the Government's recent decision to authorize the entire banking system to grant long-term loans for home mortgages and to allow all financial institutions to compete for social housing programs.  - 10 - H. BORROWER'S PERFORMANCE 9.01 The Borrower fully complied with defined project objectives. All required contracts, notably those with developers, were organized under the auspices of CIH's Commercial Department. This expedited the collection of all data necessary for developing a pipeline of subprojects. 9.02 Project implementation took longer than expected because CIH needed to: (a) adapt to new types of markets and clients (i.e., low-income households) while at the same time maintaining its traditional activities with higher-income customers; (b) mobilize part of its staff to engage in special operations on behalf of the Government, notably the relocation of slum dwellers; and (c) redeploy its staff as a result of a new organization. 1. RELATIONS ESTABLISHED WITHIN THE PROJECT 10.01 The close collaboration between CIH and the Bank, which had already been fruitful in earlier projects, was maintained throughout. This facilitated amending the Loan Agreement, without lengthy discussions as there was complete mutual understanding of project implementation needs and Bank requirements. 10.02 Project-related issues to which CIH was not a party (e.g., land titles, difficulties encountered by public developers) were, nonetheless addressed through CIH's efforts. The sensitizing of public authorities regarding the urban development sector has been enhanced in the follow-on Second Housing Finance Project. It focuses on the improvement of documentation procedures such as urban development plans and the issuance of development and construction permits. 10.03 CIH's staff have cooperated fully with Bank missions by providing access to the company's financial statements. The Borrower also met all. required deadlines for the submission of the audit reports and for compliance with financial covenants, as set forth in the Loan Agreement. J. CONSULTANT SERVICES 11.01 The consultants accomplished their tasks to the satisfaction of the Borrower and the Bank. The contracts of three consulting firms were extended beyond project completion. Their help in terms of establishing computerized data processing, as well as their training of personnel in banking activities and computerized models, contributed measurably to CIH's institutional development.  - 11 - K. DOCUMENTATION AND-DATA PERTINING TO THE PROJECT 12.01 The legal stipulations, which were agreed upon, did not pose any particular difficulties, aside from the application of certain eligibility criteria, which these documents merely reflected. It was possible, however, to modify criteria during the course of implementation whenever certain details needed clarification. It is noteworthy that the precision with which financial ratios were formulated in the legal documents provided invaluable assistance in subsequent annual reviews of audited financial statements. The appraisal report was also a clear and concise document. It facilitated the exchange of opinions between the Bank and the Borrower as differences in interpretation never occurred.  - 12 - KINGDOM OF MOROCCO FIRST HOUSING LOAN TO CREDIT IMMOBIUER ET HOTEUER (CIH) (LOAN 2245-MOR) PROJECT COMPLETION REPORT PART II: PROJECT REVIEW FROM ThE BORROWER'S Pr:IIPE  - 13 - KINGDOM OF MOROCCO riRST HOUSING LOAN TO CREDIT IMMODIUER ET HOTEUER (CIN) (LOAN 2245-MR) PROJECT COMPLETlON REPORT PART II: PROJET REIEW F_ROM HE BORROWR'S PERSPEllVI COMMENTS SUBMITrED BY THE BORROWER A study by the Government of Morocco estim'.ted the housing deficit in 1980 at 700,000 units, and additional needs of new households at 90,000 units a year. Given Fhe scope of this problem, the public authorities made special arrangements in successive investment codes, for low-cost housing, specifically by revising norms for this category of housing and raising the incomes of those eligible for it. These measures had a positive impact on the sector, reflected in a marked recovery of investment in housing production by both public and private developers. However, much of the resulting supply of housing was of medium quality, intended for medium- and higher-income households, the proportion of low-income housing remaining small. This situation was aggravated by the ever-increasing disparity between real incomes that remained virtually stagnant for a number of years and the rising cost of housing as a result of increases in land prices and construction costs. Incentives were therefore introduced to encourage the production of housing to satisfy the demand from low-income households (particularly by public sector developers), the aims being to replace slums and promote rural housing in order to stabilize, among other things, the rural population. A study program focussing on these objectives was therefore prepared; it recommended appropriate financial resources together with logistical support to provide the necessary technical assistance in the area of planning and execution of large-scale projects. In accordance with the desire expressed by the public authorities and in light of the specific features of the proposed action plan, CIH took all the necessary steps to ensure the success of this program. CIH's actions took three main forms: institutional reform through an internal reorganization designed to enhance its management of lending activities;  - 14 - simplification of loan appraisal and approval procedures; creation of new products better adapted to socioeconomic realities. IBRD has made a significant contribution in this area, in terms of both finance and technical assistance. 1. AIM OF LOAN 2245-MOR The credit line provided under World Bank Loan 2245-MOR was the first direct assistance from IBRD to CIH and was intended to refinance loans in the general area of the production of low-cost housing. Eligibility for refinancing was extended to any project meeting technical criteria in the area of plot and land development and individual or group construction, along with acquisition of housing for personal occupation. The line of credit also provided technical assistance to strengthen CIH's capacity in the area of evaluating housing projects, specifically as regards the optimal utilization of computerization. The contract was signed on April 11, 1983, the loan amount being US$60 million, allocated as follows: - US$56 million for refinancing of loans made to public and/or private companies for constructing low-cost housing for sale; US$3 million for refinancing loans to companies for plot development and to low-income households for individual construction; - -US$560,000 of technical assistance to finance consulting services and equipment. The Bank's share in the refinancing of amounts disbursed by CIH was 50% for housing construction by developers and 35% for all loans made for plot development and individual construction. As regards technical assi. :ance, the Bank's share was 100% of foreign exchange costs and 75% of local currency costs. The following criteria were adopted for the disbursement of loan proceeds: - the land price was not to exceed DH 180/m2 - the average housing unit area was not to exceed 100 m2 - the price of a core unit was DH 32,000 - the price of a one-story partially finished dwelling was DH 48,000 - the price of a one- to two-story dwelling (R+l, R+2) was D1 62,000  - 15 - - the price of a walk-up apartment was DH 80,000 - monthly income was not to exceed DH 2,000. These eligibility conditions, given the constraints deriving from the real cost of housing in Morocco, were successively revised to take account of market realities. Hence the maximum real estate value (VIT)5 of housing eligible for financing under Loan 2245-MOR increased as follows: YEAR AMOUNT IN DIRHAMS 1983 80,000 1984 95,000 1985 115,000 1986 130,000 1987 140,000 1988 150,000 II. WITH DRAWALS As the following table indicates, disbursement of the line of credit extended over a very long period of eight years, as against the much more normal two or three years. The first disbursement did not occur until a year after the loan was signed. A NNUAL DISBURSEMENTS YEAR AMOUNTS IN US$ AMOUNTS IN DH % OF LOAN 1983 446,650.00 3,460,599.531 0.68 1984 2,002,435.15 18,059,502.31 3.55 1985 1,028,542.62 10,253,626.02 2.02 1986 7,912,457.46 69,723,127.35 13.71 1987 18,989,410.69 162,012,693.74 31.86 1988 18,420,668.64 149,363,058.58 29.38 1989 9,917,185.16 85,147,573.03 16.75 1990 1,282,650.28 10,417,725.80 2.05 TOTAL 60,000,000.00 508,437,906.36 100.00 1/ The US$446,650 represents payment of the front-end fee. According to Moroccan practice, the VIT is defined as the estimated construction cost of the housing unit pLus a conventional amount for the cost of the land (DH 20,000 or USS2,300 except for the low- cost units, which is DH 10,000)  - 16 - The table indicates that during the first four years of loan effectiveness less than 20% of the loan amount was disbursed, and that only after 1987 did operations really get under way, following the various adjustments made to the costs of eligible housing. A. Resources Provided for CIH Loan 2245-MOR was disbursed in a number of currencies, as follows: CURRENCIES AMOUNT EQUIVALENT IN USS EQUIVALENT IN DH X Japanese Yen 3,069,913,190.00 21,442,056.40 184,172,802.23 35.74 NetherLands guilders 15,126,014.52 6,608,143.36 57,682,201.87 11.0'* USS 13,017,842.33 13:017,842.33 106,540,453.24 21.70 Italian Lira 2,650,958,604.00 1,994,870.39 16,514,092.45 3.32 Deutsche marks 19,543,379.40 10,177,109.79 87,691,674.46 16.96 Swiss francs 9,746,306.57 6,348,378.96 52,316,028.13 10.58 French francs 1,761,073.44 275,425.09 2,378,143.64 0.46 Danish kroner 206,711.27 30,108.70 247,173.44 0.05 Spanish pesetas 9,959,189.00 77,337.31 653,154.40 0.13 ECUs 25,230.00 28,727.65 242,182.50 0.0! TOTAL 60,000,000.00 508,437,906.36 100.00 CHANGES IN CASH POSITION FROM 1983 TO 1990 1983 1984 1985 1986 1987 1988 1989 1990 TotaL resources 1,566 1,717 2,149 3,039 3,144 4,038 4,721 5,929 Of which IBRD 3.46 18.06 10.25 69.72 162.01 149.36 85.14 10.41 X _ 1.05 0.47 2.29 5.15 4.75 1.80 0.17 HBM disbursements 185.80 216.81 200.91 205.41 129.06 96.04 82.44 91.22 Housing disbursements 714.75 703.36 888.79 1,035.83 1,068.02 1,237.4 1,699.7 2,156 Although Loan 2245-MOR provided the fairly large sum of US$60 million, it represented a small proportion, averaging less than 2%, of the total funds mobilized by CIH during the loan disbursement period 1983-1990; this was a result of the mismatch between eligibility criteria and housing market realities. The loan proceeds represented less than 7% of the disbursements for housing made by CIH during the period in question. B. Operations Financed During the period 1983-1990 CIH approved 120,527 housing loan operations for a total amount of DH 13,060 million, broken down as follows:  - 17 - HOUSING NUMBER OF UNITS AMOUNT IN DH 000 One/two story R+1, R+2 17,094 899,368 Construction - (CNP) 11,864 1,360,584 Construction - (OPL) 4,785 310,678 "Habitation Bon Marche" (HBM) 24,042 1,406,135 Acquisition (ANP) 21,209 2,822,891 Prefinancing (OPF) 41,533 6,260,406 TOTAL 120,527 13,060,062 To these amounts should be added 84 loans for site development for a total of DH 492 million. The loan financed 15,479 units with a total value of DH 900 million in long-term mortgage loans, or 12.84% of units financed by CIH between 1983 and 1990. Ill. ASESSMENT OF THE FIFTH IBRD CREDIT LINE Although positive in a number of respects, this credit line had certain disadvantages which for the most part were overcome by the adjustments made during its utilization. A. Advantages of Loan 2245-MOR The positive aspects were the interest rate, term and disbursement modalities. 1. As a development institution, the World Bank was able to offer an advantageous interest rate, which, starting out at 10.97% in 1983, had declined to 7.70% by 1990. This remark must, however, be qualified by one important consideration, namely the amortization adjustment factor, which was only favorable to CIH for the period between May 15, 1984 and May 15, 1985. Except for this relatively short period, the ratio was greater than one, thereby increasing Morocco's payments of interest and prin^ipal and making the credit line more expensive. The currency pooling system, whose initial purpose was to smooth out fluctuations in exchange rates, therefore had the opposite effect and increased the cost of borrowing. Nonetheless, the real cost of the loan was still advantageous compared to interest rates on the local and international capital markets. 2. The second advantage lay in the procedure for withdrawing funds, which did not require documents substantiating expenses made; these would have been difficult to provide, especially as regards individual construction. This documentation in fact consists of a works progress report prepared by CIH technical services inspectors. In addition, computerized information on programs financed, showing the main features of the housing built,  - 18 - is permanently available. For any withdray-al of funds the following documents, certified and duly signed by an authorized CIH representative, are required: - a disbursement application in two copies a statement of expenditures in two copies - a form D in two copies. 3. The third advantage of this credit line was its term of 17 years. Given that CIH offers mortgage loans for periods from 15 to 25 years, particularly for HBM loans, the credit line enabled CIH to benefit from relatively stable resources for 17 years. However, it should be pointed out that this term is shorter than other Bank credit lines to CIH (about 20 years). It would therefore be desirable to align repayments of this credit line with repayments to CIH of its low-cost hous.ng loans. 4. Loan 2245-MOR, the first line of credit for housing finance, enhanced the information on the sector and led to a more realistic assessment of housing costs in Morocco, thereby enabling the necessary adjustments to be made to future projects in order to take account of the real housing needs of Morocco's population. We should certainly note that the loan directly benefited the poorest groups by bringing decent, healthy housing within their reach. B. Drawbacks of Loan 2245-MO The scope of the advantages cited above was reduced by difficulties encountered during the disbursement phase, stemming in our view from the fact that this was IBRD's first operation in housing finance sector. The difficulty lay in the Bank's underestimate of the real cost of low-cost housing as compared to the norms laid down by the Moroccan authorities well before the conclusion of the credit line. It should be noted that the VIT of a low-cost unit may reach DH 150,000. It was therefore difficult to produce housing meeting IBRD's criteria, despite the efforts made by the Moroccan authorities to reduce costs in this category by making land available at symbolic prices to public developers. As a result, the credit line had a number of drawbacks which were only overcome by the desire of both parties to make the project a success: (1) The principal difficulty related to eligibility criteria. The technical criteria, establishing four strictly defined subcategories, were insufficiently flexible for this kind of financing. (2) The selling price ceilings for eligible housing were too low despite annual revision of the VIT, so that the true cost of housing in Morocco was not taken into account. The virtual absence of housing meeting ISRD's criteria was reflected in the low level of  - 19 - disbursements during the first four years of the project, as the table of annual disbursements indicates. (3) This low level of disbursements led to CIH paying a significant commitment charge. Two comments should be made in this respect: (a) The commitment charge paid amounted to $2,016,057.43, or DH 18,061,276.93. This considerable sum resulted from the slow rate of disbursements, which itself derived from the rigidity of the crtteria governing housing eligible for financing. The commitment charge was also significant in relative terms, amounting to 3.36% of the loan amount, thereby increasing the cost of the credit line. (b) The second comment under this heading relates to the rate of the commitment charge, namely 0.75%. This relatively high figure would be tolerable for a loan that did not take more than two years to disburse. Because of the difficulties encountered in the utilization of this credit line, disbursements extended over eight years and therefore the financial burden deriving from the commitment charge was very heavy as compared to other IBRD financing. (4) It should be noted that some prefinancing (OPF) programs were not totally disbursed on completion of the credit line and are automatically excluded from the scope of the next credit line. We hope that IBRD will agree to finance all the OPF programs straddling the two lines; in the knowledge that on the closure of the earlier line these were not all completely disbursed. (5) The nonexistence save for a few exceptions of the unfinished housing technique in Morocco contributed to the difficulties in the utilization of this component. In practice, the concept of unfinished housing is not viable in Morocco given the total absence of low-cost standard products (doors, windows, etc.) and low incomes which do not permit beneficiaries to complete work on the housing acquired. As a result, the rare programs of unfinished housing undertaken have resulted in total incompatibility of fa9ades, which undermines the policy of ensuring that this category of housing has an architectural flavor that matches the features of the surrolnding environment.  - 20 - IV. RELATION TH IBRD Relations with IBRD were marked by trust and cordiality. The desire of both parties to make the project a success required frequent contacts always characterized by openness and mutuil understanding. Mention should be made here of the various Bank missions to CIH to monitor and analyze problems that arose and for which solutions were invariably found. The various amendments and agreements to revise both eligibility criteria and the project's closing date are also evidence of this cooperative spirit. However, as a result of inadequate definitions of the construction made in Morocco, the above adjustments have been delayed too long, and CIH has borne a heavy financial burden to finance social housing.  - 21 - KINGDOM OF MOROCCO FIRST HOUSING LOAN TO CREDIT IMMOBIUER ET HOTEUER (CIH) (LOAN 2245-MOR) PROJECT COMPLETION REPORT PART III: STATISTICAL INFORMATION  - 22 Table 1. ReLuted Bank Loans and/or Credits Loan/Credit Year of zitsle gMrpose Amuroval Status Loan 1528-MOR To assist Govt. in financing 1978 Completed in March 1984 First Urban Rabat stum upgrading and sites Development and services program. Project Loan 1944-MOR To assist Govt. in financing 1981 Completed in July 1988 Second Urban slun upgrading and sites and Development services programs and improve- Project ment of municipal services of Meknes and Kenitra Loan 2272-MOR To help build up the Comnunal 1983 CompLeted in Dec. 1989 Pilot Project Infrastructure Fund and finance for the Communal infrastructure subprojects. Infrastructure Fund Loan 3121-MOR To assist Govt. in promoting 1989 To be compLeted in Dec. 1994 developnent of low- and moderate- cost housing. and Loan 3122-MOR To support housing finance 1989 To be compteted in Dec. 1994 Second Housing activities and to assist CIH Finance Project improve its financial and operational performances. Table 2. Proiect Timetable IteiB f tann Revised Actual Identification September 1981 Preparation (Pre-appraisal) Jan. 29, 1982 March 19, 1982 May 18, 1982 Appraisal June 21, 1982 October 1982 Loan Negotiations December 1982 January 10, 1983 Board Approval March 15, 1983 Loan Signature April 11, 1983 Loan Effectiveness July 11, 1983 August 30, 1983 Loan Completion June 30, 1986 June 30, 1988 Dec. 1988 Loan Closing Dec. 31, 1989 Dec. 31, 1990 Dec. 31, 1989 Loan Last Disbursements March 31, 1990 January 29, 1990 Project Cowpletion Sept. 30, 19O May 28, 1991  - 23 - Table 3. Laa DisburseMents - (in USS milo) Fiscal AppriisaL Amt. Actual Amt. ActuaL as X Year Cumulative Cumulative oEti 1983 Sep., 1982 Dec., 1982 Mar., 1983 .40 OX Jun., 1983 .80 OX 1984 Sep., 1983 3.30 .45 14% Dec., 1983 5.80 .45 8X Mar., 1984 9.30 .79 8X Jun., 1984 12.80 .82 6X 1985 Sep., 1984 17.10 1.79 10X Dec., 1984 21.30 2.45 11X Mar., 1985 25.80 2.70 10X Jun., 1985 30.30 2.73 9K 1986 Sep., 1985 35.60 3.19 9X Dec., 1985 40.80 3e48 8X Mar., 1986 44.80 3.69 8X Jun., 1986 48.80 4.16 9X 1987 Sep., 198, 50.80 4.55 9X Dec., 1986 52.80 11.39 22% Mar., 1987 54.40 21.76 40X Jun., 1987 56.00 27.89 50X Sep., 1987 57.00 29.59 52X Dec., 1987 58.00 30.38 52X Mar., 1988 58.60 33.03 56X Jun., 1988 59.20 43.27 73X 19_89 Sep., 1988 59.60 45.97 77K Dec., 1988 60.00 48.80 81X Mar., 1989 60.00 50.13 83X Jun., 1989 60.00 57.21 95X Sep., 1989 60.00 57.30 96M Dec., 1989 60.00 58.72 98X Mar., 1990 60.00 60.00 100K Jun., 1990 60.00 60.00 100K Lest Disbursement Date: January 29, 1990  4. Project Implementation A. CIH Financial Performance Indicators T Projected Actuat (Audited) 1983 1984 1985 1986 1983 1984 1985 1986 Ooerationat Indicators Gross Incose as X of average total assets 11.48 11.87 12.24 12.51 11.71 12.14 12.35 12.31 Administrative Expenses as % of Average total Assets 0.88 0.80 0.77 0.76 1.01 0.96 1.10 1.97 Financial Expenses as X of Average total Assets 5.96 6.34 5.48 5.70 8.40 9.45 9.79 9.92 Income from Loans as X of Average total Assets 14.06 14.52 14.97 15.33 12.69 14.00 14.66 14.71 Cost of LT debt as X of Average LT debt 7.72 8.30 7.18 7.42 9.42 10.65 11.34 11.05 Spread 6.33 6.23 7.79 7.90 3.27 3.35 4.32 3.66 Profitability Indicators Net profit as % of Average Equity 28.78 30.74 37.23 33.03 9.76 11.52 10.68 9.97 Profit before taxes as X of Average Equity 60.98 65.12 78.87 69.97 20.39 23.90 21.97 21.16 Net profit as X of Average total Assets 1.74 1.82 2.44 2.47 0.72 0.83 0.71 0.62 Financial Structure Indicators Debt-Equity Ratio Ceiling (1) 13.87 13.99 14.20 14.33 LT Debt-Equity Ratio 13.09 12.71 10.87 9.76 10.35 10.93 12.53 12.40 Debt-Service Coverage Ratio (2) 1.33 1.49 1.83 1.79 1.19 1.19 1.16 1.14 Loan Investment Ratio/ Total Outstanding loans (3) 15.27 14.26 14.64 14.40 Arrears non-commercial less than 8X housing loans (LT mortgage loans) (Section 4.07 (b) of the L.A) 1.8 1.9 1.7 1.8 Goverrient Receivables as X of current Assets 8.9 13.8 24.1 25.3  - 25 - 4. Project Implementation (continued) B. Covenanst: Section 4.04 (a) of the Loan Agreement - (1) must be less than (3) Section 4.05 (a) of the Loan Agreement - (2) must remain at least 1 to 1 C. ReMarks: The effective audited performance indicators are below appraisal expectations. The main reason is the increase in the cost of long-term debt (11% on average compared with 7.5%), since (i) the Government cancelled its DH 40 million line of credit to CIH at 6.5% interest rate; (ii) the interest rates on bonds and notes issued by CIH averaged 12,5% on 1985/87 from 10.5% on 1981/82, and (iii) the interest rates on loans did not change during the 1984/87 period. Nonetheless, CIH has maintained an average spread of more than 3% and has paid at minimum 10% annually on the outstanding equity to its shareholders.  5. Project Costs and Financing (continued) A. Project Costs (continued) (b) in OH mi Il ion Corresponding Subproject Costs (t) Type of Loans Appraisal Estimate Revised Estimate Actual Costs Local Foreign Total Local Foreign Total Local Foreign Total Construction Loans 788.3 424.6 1,212.9 564.0 303.6 867.6 329.4 356.8 686.2 Individual Construc- tion Loans 24.5 13.2 37.7 28.2 15.6 43.8 119.1 86.2 205.3 Land Developnent Loans 4.2 2.2 6.4 4.2 2.4 6.6 - - Sub-Totat 817.0 440.0 1,257.0 596.4 321.6 918.0 448.5 443.0 891.5 technical Assistance _ 1.2 2.4 3.6 1.2 2.4 3.6 3.5 14.1 17.6 TOTAL 818.2 442.4 1,260.6 597.6 324.0 921.6 452.0 457.1 909.1 (*) excluding land Remarks: (i) Currency Equivalent (Appraisal Report) as of Dec. 1982 - US$1 - DH 6 (ii) Averaged Foreign Currency Exchange Rate (during Project Execution 1983/1989) US$1 - DH 8.47  5. BProject Costs and Financing (continued) B. Project Financing Costs Estimated in the Loan Agreetent Actual Costs Sources DH million USS million O DH million USS mitiUon X Expenditures Categories SUBLOANS TO PRIVATE ENTERPRISES BIRD 110.1 18.4 50 157.2 18.9 65 Local External Source 55.0 9.1 25 - - Internal Sources (CIH) 55.1 9.2 25 89.0 10.2 35 Subtotal 220.2 36.7 100 246.2 29.1 100 SUBLOANS TO PUBLIC ENTERPRISES BIRD 228.9 38.1 35 198.0 23.0 45 Local External Source 261.6 43.6 40 S8.0 10.4 20 Internal Sources (CII) 163.5 27.3 25 154.0 18.5 35 Subtotal 654.0 109.0 100 440.0 51.9 100 I SUBLOANS TO INDIVIDUAL HOUSEHOLDS BIRD 15.3 2.6 35 133.5 15.7 65 Local External Source 17.5 2.9 40 - - - Internal Sources (CIH) 11.0 1.8 25 71.8 8.4 35 Subtotal 43.8 7.3 100 205.3 24.1 100 TECHNICAL ASSISTANCE BIRD 3.2 0.5 90 16.2 1.9 92 Internal Sources (CIN) 0.4 0.1 10 1.4 0.2 8 subtotal 3.6 0.6 100 17.6 2.1 100 BIRD 357.5 59.6 39 504.9 59.5 55 Local External Sources 334.1 55.6 36 88.0 10.4 10 Internal Sources (CIH) 230.0 38.4 25 316.2 37.3 35 Total 921.6 153.6 100 909.1 107.2 100  - 28 - 5. Project Costs and Financing (continued) B. Project Financng (continued) Remarks: (i) The effective cost of the Project in local currency is almost equal to what was expected in the Appraisal Report - DH 909 million instead of 921 million; (ii) Due to the 40Z increase of the foreign exchange rate during the life of the Project, the effective cost in foreign currency is US$ 107 million instead of US$153 million as projected during the appraisal; (iii) To take into account the Amendments of the Loan Agreewent dated on April 5, 1984 and October 8, 1986, the Bank's share of expenditures increased from 39% to 55% as projected during appraisal; (iv) CIH has been able to mobilize more internal sources than expected; therefore, only 10% of the expenditures have been financed by local borrowings.  - 29 - 6. Project Results A. Direct Benefits Number of Units Appraisal Estimated at Estimate the Closing Date Serviced Plots 1,000 - Built by Individuals l,200 4,502 Built by Private Enterprises 2,400 3,443 Built by Public Enterprises 14Q00 7_504 TOTAL 15,000 15,449 B. Economic_Impact Appraisal Actual (at Estimate Final Development) Economic Rate of Return 12% 15% Annual running costs 3% 3% Annual rental value (excluding inflation) 10% 15% Internal Rate of Return 14% 23% to 45% Project Life 15 years 15 years Comments: (i) ERR has been computed assuing that the value of the units increases 7% per annum exclusing inflation; (ii) IRR has been computed for subprojects costing more than US$500,000 using the application of the Bertaud's model (see D - Technical Assistance);  6. Project Results (continued) C. Financial Impact CIH - Financing Plan for 5 years Projected 1982/86 Actual (Audited) 1983/87 ON millions USS millions X DH niltions USS mitlions X Resources Requirements 6,452 1,075 9,080 1,031 less: Resources surptus at the end of CY 31 5 254 29 Sub- total 6,421 1,070 8,826 1,002 Financing Plan Available Cash - - - 137 16 1 Cash Flow Generation 137 23 2 598 68 7 Principal Loan Collection 1,428 238 22 2,265 257 26 Shore Capital Increase 100 17 2 100 11 1 w Locat Borrowings 3,825 638 59 4,575 519 52 o Disbursement on previous IBRO loans 490 82 8 472 54 5 Disbursement on IFC loans - - - 321 37 4 Present 3BRD loans 360 60 6 268 30 3 Resources borrowed on International Market 81 12 1 90 10 1 Subtotal 6,42' 1,070 100 8,826 1,002 100 Exchange Rate: DH 6 - US$ 1 DH 8.81 -US$1 Remarks: (i) In US$, projected and actual financing plans are similar; (ii) The relative decrease on local borrowings, due to more restrictive Central Bank's policy, and on international borrowings have been replaced by a higher loan collection and cash flow generation.  6. Project Results (continued) D. Studies Purpose as Defined at Impact of study Appraisal Status Study Land-use model To evaluate the cost- Coapleted None'/ effectiveness of (Bertaud's model) alternate land-use patterns. C=Wterized data To corpare and onalyze Coopleted Effective informotion system the cost-effectiveness (application of All subprojects have been of Low-cost housing of Bertaud's model) appraised with the application development icliuding of a spreadsheet called training. "ACCESS". Evaluation of the To recommend suitable Cancelled2/ None states of the housing masures for expanding constructions inchisti-y industry's involvement in low-cost housing development. I Ccurwterized Date To mobilize private Completed/ Very effective Informtion Systems resources through deposit w/training in progess CIH has become a full- accounte, including fledged Bank with an traini: i. internat coaputerized network. Evaluation of the savings To assist CIH's develop- ConpleVed3t Very productive savings garket en ment objectives CIH has mobilized US$85 restructuration organi za- million deposits, has tion. expanded its network of Agencies and has decentralized decision- makings. arks: 1. No land development subproject has been financed by the Project. j. This study was cancelled through an Amendment to the Loan Agreement, dated November 24, 1987. 3. The two last studies have been added in the above Amendment, to be consistent with CIE's development objectives to become a competitive Bank.  - 32 - LOAN 2245-MOR. MOROCCO. C.I.H. FIRST HOUSING FINANCE PROJECT 7. STATUS OF THE LOAN AGREEMENT A. Status of Covenants. Covenant Subiect Compliance LOAN AGREEMENT LA 2.03(C) Commitment deadline (completion date) Extended to be June 30, 1986; June 30, 1988 LA 2.04 Closing date be December 31, 1989; Yes LA 2.1010(a) Payments withdrawn and not utilized See Annex within 5 years of granting mortgage loans to be repaid to the BANK; LA 3.02 Borrower to employ qualified Extended to Consultants under TORs satisfactory Nov. 25, 1987 to the Bank not later than October 31, 1983; LA 3.03(b) Computer for Part B(2)(i) be procured Done on under contract negntiated with supplier Feb. 1984 Goods for Part B(2) (ii) be procured on the basis of prices comparison; Yes LA 3.05(a) CIH to furnish BANK information on expenditures, sub-burrowers, subloans, Yes benefits ...; LA 3.05(b) BANK and CIH review progress annually Yes and ensure achievement of objectives; LA 3.05(c) CIH prepares completion report within Undergoing six months after last withdrawal; LA 3.08. CIH to exchange views with BANK on Yes administrative, operational and financial conditions; LA 4.01(a) CIH to maintain records to monitor Yes progress of Project and Housing Schemes; LA 4.02(a) CIH to have accounts and financial Yes statements audited for each FY in accordance with sound auditing practices; LA 4.02(b) CIH to furnish BANK with copies of Yes audited reports not later than 6 months after end FY;  - 33 - 7. STATUS OF THE LOAN AGREEMENT (continued) A. Status of Covenants (continued) Covenant Subjec Compliance LOAN AGREEMENT LA 4.04 CIH to ensure ratio of outstanding debt Yes over equity be less than ratio of 18 times non-commercial housing loans + 9 times other investments over loan + equity investments; LA 4.05 CIH to conduct operacions to maintain Yes ratio 1:1 between loan receipts and debt payments; LA 4.06 CIH not to make any repayment in advance Yes of maturity of its debt which would affect its firancial obligations; LA 4.07(a) CIH not to provide financing for resettle- ment scheme without Guarantor guarantees; Yes LA 4.07(b) Arrears on financing resettlement schemes Yes be less than 8% of such loans; LA 4.08 CIH to take steps to protect itself Yes against foreign exchange lost; LA 4.10 CIH not to finance housing subproject Yes to exceed 20% of aggregated equity; LA 4.11 By March 31, 1985, to carry out review Yes & evaluation of tax incentives and interest subsidies; LA Schedule 1. Table of Amount allocated by Category REVISED EFFECTIVE (in US$ Equiv.) Cat.l. S/L.to Private 32,400,000 34,572,457 Cat.2. S/L to Public E. 25,300,000 23,041,520 Cat.3. TA Part B. 1,853,350 1,939,373 Fees 446,650 446.650 TOTAL - 60,000,000 60,000,000  - 34 - 7. STATUS OF THE LOAN AGREEMENT (continued) A. Status of Covenants (continued) Covenant Subject Compliance GUARANTEE AGREEMENT GA 3.04(a) Government to maintain until 5/86 Yes interest rate structure: (i) 6% up to DH 100,000 for complex units; (ii) 7% up to DH 100,000 for individ. units; (iii) 7% for complex units and (iv) 8% for indiv. units between DH 100 & 130,000 GA 3.04(b) Government to maintain interest rate Yes structure under Gen. Regime: (i) 10% up to DH 200,000; (ii) 12% between DH 200 & 300,000; (iii) 14% beyond DH 300,000. B. Amendment to the Loan Agreement. I. Amendment to Schedule 1 dated November 3, 1983, reallocating US$ .3 Million to Cat.(3) from Cat.(l) for purchase of Equipment. II. Amendment to Schedule 5 dated December 28, 1983, updating the ceiling prices for Housing Schemes and approving certain modifications in the annual adjustments of such prices. III. Amendment to Schedule 1 dated April 5, 1984, increasing the disbursement rate (i) under Cat. (1)(a), to 65A from 50%; (ii) under Cat.(l)(b) & (2), to 45% from 35%. IV. Letter to CIH on March 31, 1986, signed by the Division Chief, extending the commitment deadline (completion date) to December 31, 1986 from June 30, 1986. V. Letter to CIH on September 10, 1986, signed by the Division Chief, extending the completion date to June 30, 1987. VI. Amendment to Schedule 1 dated October 8, 1986 (i) increasing the disbursement rate to 65% for all subloans to private Enterprises and individual Households; (ii) changing the table set forth in paragraph 1 (Cat. 1 for subloans to the private sector, Cat. 2 for subloans to the public sector); (iii) deleting paragraph 3 (re.: core units), and (iv) reallocating more funds to the TA Component (Cat.3). VII. Telex to CIH on November 25,1987, signed by the Country Director, extending the completion date to June 30, 1988.  - 35 - B. endment to the Loan Agreement (continued) VIII. Amendment to Schedule 2 dated November 24, 1987, extending the scope of the TA Component under Part B of the Project,(a) to include :(i) an enhanced computerized data information system, anl (ii) studies to evaluate the savings market and to develop a program of restructuring of CIH's organization, and (b) to cancel the study to evaluate the status of the housing construction industry. In the same document, Section 3.03(c) "Procurement" and Table set forth in paragraph 1 of Schedule 1 (reallocation of amounts) have been amended. IX. Letter of CIH on June 23, 1988, acknowledging that the closing date has been extended one year to December 31, 1990 through the last Amendment signed on Nov. 24, 1987.  - 36 - 8. USE OF BANK RESOURCES. A. BANK Inputs Stage of Project Cycle Planned Revised Final Through Appraisal 34.4 Appraisal through Board Approval 40.8 Board Approval through Effectiveness 17.6 Supervision 60 78.0 PCR 5.0 TOTAL STAFF WEEKS 175.8 B. Missions Stage of Month/ No. of Days in Specialization Performance Proj ect Year Persons Field Represented Rating Status Cvcle Identific. 09/81 Preapprais. 05/82 5 24 2 ECN + OPR + REA + URP Appraisal 10/82 5 18 ECN + ARC + OPR + ETR + PAS SPN I 04/83 2 11 ECN + EGR 1 SPN II 02/84 1 5 EGR 1 SPN III 08/84 1 8 EGR 1 SPN IV 03/85 2 8 FNA + EGR 2 SPN V 05/85 1 8 EGR 1 SPN VI 10/85 3 16 FNA +URP +EGR 2 SPN VII 12/85 2 5 FNA + Hous. Fin Spec. 2 SPN VIII 02/86 1 6 Housing Finance Specialist (*) SPN IX 03/86 4 15 2 URP + H.F. Spec.+ EGR 2 SPN X 07/86 5 6 Div.Chief + 2 URP +FNA + EGR (*) SPN XI 10/86 1 2 URP 2 SPN XII 03/87 1 2 Housing Finance Specialist (*) SPN XIII 10/87 3 5 URP + EGR + Urb.Fin. spec. 1 SPN XIV 04/88 1 2 Municipal Engineer 1 SPN XV 05/89 2 5 Urb.Sect.Spec.+ Mun.Engineer 1 SPN XVI 12/89 1 7 Municipal Engineer 1 SPN XVII 02/90 1 4 Municipal Engineer 1 SPN Total Days in Field - 253 (*) :Form 590 has not been issued. PCR 12/90 1 4 Municipal Engineer  - 37 - Annex 1 Page 1 of 5 C.I.H. LISTING OF SUR-LOANS ELIGIBLE UNDER LOAN AGREEMENT 2245-NOR SUB-LOANS A = L.T. MORTGAGE SUB-LOANS (ACQUISITION/SELF CONSTRUCTION) SUB-LOANS B WITHDRAWALS ACTUALLY DISBURSED UNDER LOAN 2245-MOR * * * CIIi SUB-LOANS A * SUB-LOANS B * 0 DEVELOPER * PROGRAM * NB UNITS * AMOUNT A * AMOUNT B * NB UNITS * * * * * b 561,000 * 6 * * 0695 * 0001 * * * 5,204,000 * 42 * * * R1,R2 * 6,004 * 279,781,500 * 205,341,000 * 4,502 * * SCI HAMMA * * * * 203,000 * 2 * * STE DUHOU * * * * 110,000 * 1 * * PH15 * 220 * 7,543,000 * 7,353,000 * 215 * PH21 * 185 e 6,248,000 * 5,792,000 * 140 * * * PH34 * 557 * 22,200,000 * 20,817,000 * 531 * * PPH38 * 893 * 38,959,000 * 0 * 0 * * * PH43 * 113 * 7,357,000 * 5,913,000 * 98 * * * PPH49 * * 7,767,000 * 7,512,000 * 85 * * * ~PH51 * 98 * 12,566,000 * 10,976,000 * 84 * *-> * PH63 * 219 12,193,000 * 37,217,000 * 901 * e * PH71 * 312 * 26,031,000 * 12,894,000 * 153 * * * PH74 * 16 * 1,412,000 * 0 * 0 * * * TF TEMARA * 115 * 2,328,172 * 2,161,000 * 52 * * 0003 * 0001 * 5 * 344,000 * 1,180,000 * 16 * * 0003 * 0003 * 1 * 100,000 * * * * 0010 * 0001 * * * 29,000 * 1 * * 0017 * 0001 * 1 * 50,000 * 50,000 * 1 I * 0018 - 0001 * 16 * 776,000 * 776,000 * 16 * * 0018 * 0002 * 20 * 1,067,845 ' 1,231,000 * 23 * * 0018 * 0006 * 741 * 64,628,972 * 50,370,000 * 750 * * 0020 * 0004 * 92 * 7,636,394 * 9,294,000 * 101 * * 0024 * 0002 * * * 47,000 1 * * 0024 * 0003 * 1 * 56,000 * 56,000 * 1 * * 0037 * 0001 * 1 * 60,000 - 60,000 * 1 e * 0051 * 0001 * 1 60,000 * 118,000 t 2 0 * 0052 * 0001 * 2 * 129,900 * 193,000 * 3 0 * 0099 * 0001 1 * 110,000 * * 0 * 0099 * 0003 64 * 3,411,312 * 3,825,000 * 72 w * 0099 * 0004 * 99 * 6,796,295 * 10,155,000 * 145 * * 0099 * 0005 * 1,460 * 128,737,023 * 71,161,000 * 905 * * 0099 * 0007 * 25 * 1,450,780 * 1,593,000 * 28 * * 0099 * 0008 * 2 * 144,000 * 204,000 * 3 ' * 0099 * 0009 * 7 * 459,000 * 459,000 * 7 0 * 0099 * 0013 * 4 * 245,000 * 426,000 * 6 * * 0099 * 0014 * 386 e 25,986,806 * 26,377,000 * 402 * * 0099 * 0018 * 37 * 2,500,331 * 2,579,000 * 38 * * 0099 * 0036 * 3 * 98,500 * 98,500 * 3 * *0099 * 0038 * * * 175,000 * 2 0 00099 * 0042 * 1 * 60,000 * 60,000 * * *0099 * 0045 * 1 40.000 * 40,000 * 1 * * 0099 * 0047 * 1 * 95,000 * 0 * '0099 * 0048 * * 0 34,000 * 1 * "0099 * 0049 * * * 81,000 * 1 * * 0099 * 0051 * 77 * 6,748,600 * 5,352,000 * 63 0 * 0099 * 0054 * 8 743,760 * 0 * * 0099 * 0055 * 1 * 110,000 * * s *0110 * 0001 * * 0 33,000 * * 0112 * 0001 * 27 * 1,102,935 * 1,253,000 * 31 * * 0112 * 0002 * 3 183,000 * 218,000 D 4 * 0 0112 * 0003 * 210 * 12,454,552 * 12,505,000 * 211 0  - 38 - Annex Page 2 of 5 C.I.N. LISTING OF SIB-LOANS ELIGIBLE LUER LOU AGieg T 245-NOR SUB-LOANS A a L.T. MORTGAGE SUB-LOANS (ACQUISITION/SELF CONSTRUCTION) SUB-LOANS 8 W WITHDRAWALS ACTUALLY DISBURSED UNDER LOAN 2245-MOR * * 0 CIH SUB-LOANS A ' SUB-LOANS 8 0 * DEVELOPER * PROGRAM * NB UNITS * AMOUNT A AMOUNT B * NB UNITS * * 0112 ^ 0004 * 146 * 12,267,409 * 16,514,000 * 672 0 * 0112 * 0005 * 439 0 19,800,641 * 20,222,000 0 476 0 * 0112 * 0007 * 13 0 906,000 - 1,019,000 * 15 i * 0112 * 0008 * 10 * 722,850 * 901,000 * 18 * * 0112 * 0010 * 2 * 165,000 * 6,776,000 0 100 * * 0112 * 0012 * 60 * 5,052,300 * 13,425,000 * 154 0 - 0112 * 0014 * 28 0 4,543,667 * * * 9 0112 * 0015 * 12 0 1,804,408 * * * 0 0114 * 0001 * I * 76,000 0 76,000 * 1 * 0 0114 * 0002 11 * 657,500 * 542,000 * 12 * * 0114 * 0003 * 19 * 1,313,000 - 1,313,000 * 19 * * 0114 * 0007 0 2 125,930 - 48,000 0 1 t 0 0114 * 0008 0 1 * 76,000 * 161,000 * 2 * * 0114 * 0012 * 144 o 7,982,490 * 7,814,000 0 148 * * 0114 * 0013 * 131 0 6,818,664 * 6,919,000 * 193 * * 0114 * 0014 0 3 173,000 - 99,000 2 2 0 * 0114 * 0016 * 3 0 224,800 313,000 4 * * 0114 * 0018 * 2 * 118,720 * 118,720 2 0 * 0114 * 0020 * 10 * 890,000 * 318,000 0 4 0 * 0114 * 0021 0 16 * 999,000 * 1,082,000 * 17 t * 0114 * 0024 0 52 e 3,175,300 - 3,292,000 * 53 0 * 0114 * 0027 * 96 * 5,872,000 * 4,840,000 * 102 0 * 0114 * 0030 * 18 0 1,193,500 * 1,650,000 0 16 * 0114 * 0031 0 214 * 14,785,978 * 15,797,000 * 210 b 0 0114 0 0036 0 52 0 3,789,080 - 3,350,000 e 47 * 0 0114 * 0037 0 169 0 12,286,500 - 15,186,000 0 172 0 * 0114 * 0038 0 94 0 6,202,450 - 9,459,000 * 154 * * 0114 * 1000 * 0 6,000,000 0 100 0 * 0114 * 0042 0 107 * 6,915,770 - 16,470,000 0 140 0 * 0115 * 0001 0 3 0 150,000 0 220,000 0 4 0 * 0115 * 0002 0 189 0 9,579,594 * 10,251,000 e 203 * * 0115 * 0004 * 42 0 2,848,800 * 3,237,000 s 50 * 0115 * 0006 0 1 0 48,000 48,000 I 1 * * 0115 * 0009 1 * 59,000 0 126,000 * 2 * 0115 * 0011 a 5 0 341,600 * 420,000 0 10 * * 0115 * 0017 * 16 1,082,400 * 1,232,000 0 18 * 0115 * 0020 * 7 0 433,350 120,000 0 2 * 0116 * 0001 2 231 0 18,513,975 * 26,512,000 330 * 0116 * 0002 26 0 2,027,550 a 1,518,000 * 19 * 0116 * 0004 0 143 * 6,132,59% * 6,330,000 0 148 0 * 0120 * 0001 1 77,000 * 77,000 I 1 * 0120 * 0002 0 4 * 274,050 * 361,000 0 5 * * 0120 * 0003 5 0 307,000 * 451,000 * 7 * 0 0120 * 0007 0 5 * 279,000 * 279,000 * 5 * * 0120 * 0010 1 * 65,000 * 0 * 0120 * 005 18 0 1,030,000 * 1,137,000 * 20 * 0120 0 0016 0 162 * 10,215,377 0 10,453,000 0 165 * 0120 * 0017 * 19 * 1,498a,000 * 1,404,000 1a 0 * 0120 * 0018 a 5 0 522,000 * 548,000 a 80 *0120 0020 * 12 0 854,000 * 679,000 * 100 * 0120 * 0021 0 7 0 545,000 ' 1,186,000 * 14 0 a 0120 * 0022 * 2 0 120,000 * 0  - 39 - Annex I Page 3 of 5 C.I.N. LISTING OF SUB-LOANS ELIGIBLE UNDER LOAN AGREEMENT 2245-PICA SUB-LOANS A c L.T. MORTGAGE SUB-LOANS (ACOUISITION/SELF CONSTRUCTION) SUB-LOANS e WITHDRAWALS A'TIIA.Lv Dl qUPSED UNDER LOAN 2245-MOR ***"*,*********a**********^*********************** t*******************e***a* *******O**********i*aaaaaa.*aa * * * CIH SUB-LOANS A * SUB-LOANS 8 * DEVELOPER * PROGRAM * NB UNITS * AMOUNT A AMOUNT B * NB UNITS * * 0122 * 0001 * I * 50,000 * 45,000 * 1 * b 0122 * 0004 2 * 96,300 * 40,000 * 1 * * 0122 * 0006 * 5 176,000 * 176,000 * 5 * * 0122 * 0007 6 * 493,000 * 393,000 * 5 * * 0122 * 0010 28 * 1,852,500 * 11,881,000 * 199 * * 0122 * 0011 * 75 5,327,157 * 6,289,000 * 88 * * 0124 * 0001 * 25 * 1,234,225 * 1,287,000 * 25 ' 0124 * 0003 15 * 1