Interview in MicroCapital: Housing Finance and the 2017 European Microfinance Award
Read MicroCapital 's great nterview with Christoph Pausch, e-MFP Executive Secretary on Housing Finance and the 2017 European Microfinance Award:
MicroCapital: Why was housing selected as the theme of this year's European Microfinance Award?
Christoph Pausch: It's really a question of staying true to the underlying purpose of the Award: to highlight practices that are outside the microfinance mainstream, but are financially sustainable and deliver significant social value. The Award succeeds when it is able to gather best practices in the selected area and disseminate them widely, thus facilitating innovation that's valuable to the sector at large.
Housing perfectly fits this criterion. For most families, housing is one of their major investments, and the demand for related, effective financial products is tremendous. Study after study shows housing to be among the top three uses of microcredit, even when loans are designated for business investment. Despite this, the vast majority of microfinance institutions (MFIs) treat housing as a niche product. Though lending methodologies are well-developed, the need to spread the message is great.
MC: What partnerships are MFIs leveraging to implement housing microfinance?
CP: You see plenty! For example, specialized NGOs like Habitat for Humanity work with MFIs to develop products and train staff. Other partnerships focus on improved building techniques, for example to make homes more resilient to earthquakes or high winds. There are also partnerships with governments, which may range from a project targeting a specific community to broad subsidies aimed at housing affordability. On the micro-mortgage side, MFIs frequently partner with real estate developers to build housing that's affordable to the MFIs' clientele.
To read the full inteview click here