You are here

Housing microfinance to address the housing need in Europe and Central Asia

 

scription: MOU-4
Loucine Hayes from Habitat and Grzegorz Galusek from MFC.

   
 

scription: hfh_mfi

Microfinance has been praised for offering real possibilities to fight poverty in the developing world where a stable financial system is absent. Affordable housing loans for basic repairs coupled with housing support services can solve the existing housing need.

However, the supply of such housing loans and services is still well below the demand. Generally, housing support services include specialist assistance in construction, training, delivery of printed material, direct construction and negotiation with suppliers and municipalities.

At the end of May, Habitat for Humanity and the Microfinance Centre, a regional microfinance network working towards increased financial inclusion, signed a memorandum of understanding to establish a Regional Center for Innovation for Shelter and Finance.

This Regional Center is part of Habitat’s global initiative to set up a Center for Innovation for Shelter and Finance, aligned with its $100-million MicroBuild Fund and $10-million Technical Assistance Facility, to enable to mainstream housing services into the microfinance industry and improve living conditions for low-income families.

“The importance of adequate housing tends to be overlooked among the development objectives. However, it is the basis to break the cycle of poverty for a family. To achieve this, we need affordable housing. Widespread housing microfinance can be seen as one of the solutions to the problem,” said Loucine Hayes, regional housing finance manager at Habitat for Humanity Europe and Central Asia.

“This initiative will help empower microfinance institutions in the region. It will allow them to broaden their lending portfolios to offer a range of housing finance products for new house construction and home improvement projects. Experience so far has shown that housing microfinance not only works for poor families, but it is also an attractive product for microfinance institutions,” says Katarzyna Pawlak, deputy director at Microfinance Centre.

The Regional Center will work with microfinance institutions in Europe and Central Asia and a range of actors in the public, private and NGO sector interested in designing housing finance products for families on low incomes. Along with that, it will offer reliable specialist assistance for implementing construction work and identifying available funds.

The center will draw on the existing global expertise and act as a pool of knowledge, innovation and best practices in the field, eventually leading to the expansion of housing loans. In its first five years, the center plans to help improve 20,000 homes for low-income families. It will also equip and strengthen expertise of 40 microfinance institutions through the training of 800 employees in more than 10 countries across the region.

What is next?
Habitat wants people not only to read about poverty housing but do something to fight it. You can support Habitat’s work in Europe and Central Asia in a number of ways. Here are some examples:

• Visit our donations page to support projects in Europe and Central Asia.
• Go to country profile pages to learn about other programs in Europe and Central Asia.

If you wish to receive monthly news updates, please subscribe to our E-newsletters