BEIJING -(Dow Jones)- The International Finance Corp., or IFC, the World Bank's private investment arm, said Wednesday it has taken a $2 million equity stake in Shanghai-based mortgage origination and servicing company AnJia Group Holdings.
The IFC's stake is the first stage in AnJia's current round of financing and coincides with an additional $1 million investment by current shareholder and venture capital firm Venture TDF China, an IFC statement said.

The statement didn't elaborate on the size of either the IFC stake or the expanded stake taken by Venture TDF.

The IFC investment aims to boost AnJia's performance standards, expand its operations and set a model for mortgage origination and servicing development and standardization in China.

"AnJia provides banks with critical mortgage sourcing capabilities that will help them better assess and control home loan transaction risk," the statement said.

IFC's interest in the development of an international-standard mortgage financing sector is designed to limit the creation of new nonperforming loans adding to the massive NPL burdens already clogging the balance sheets of China's state-owned commercial banks.

Around 90% of China's residential mortgages are originated by state-owned Industrial & Commercial Bank (ICBC.YY), Agricultural Bank of China (AGBC.YY), China Construction Bank (CCB.YY) and Bank of China (BCH.YY), which recorded a 20.3% average bad debt ratio at end-2003.

Mortgage origination and underwriting services help to reduce banks' mortgage lending risk as well as assist client banks in creating pools of quality mortgage loans that can be issued as mortgage-backed securities...

-By Phelim Kyne, Dow Jones Newswires; 8610 6588-5848; Phelim.kyne@dowjones.com

-Edited by Sharon Buan

Dow Jones Newswires
02-25-04 0542ET