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Habitat for Humanity and Microfinance Centre to address housing need in Europe and Central Asia

May 20, 2011

Bratislava/Prague (May 20, 2011) – On Friday, Habitat for Humanity, an international organization working to eradicate poverty housing, 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.

Microfinance has been hailed 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.

“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.

Habitat for Humanity in Europe and Central Asia made its forays into housing microfinance because in many countries whole new houses are not an affordable solution. Small repairs, one at a time, are the most reasonable way to solve and improve existing living conditions.

This is not the first join initiative of Habitat for Humanity and Microfinance Centre. Previously, two organizations successfully cooperated on a financial literacy project that Habitat launched in 2007. It helped to integrate housing finance education into the standard financial literacy pack and train several thousand families and loan officers in the region.

About Habitat for Humanity International
Habitat for Humanity International is a nonprofit organization dedicated to the cause of eliminating poverty housing. Since its founding in 1976, Habitat has built and renovated more than 400,000 homes worldwide. In Europe and Central Asia, Habitat works in 22 countries with partners, donors and volunteers from the region. For more information, or to donate or volunteer, visit www.habitateurope.org

About Microfinance Centre
Microfinance Centre (MFC) is a regional network of 105 institutions implementing microfinance in Europe and Central Asia with its headquarters in Warsaw, Poland. Since 1997, it has organized over 500 capacity building events and delivered capacity building to more than 6000 microfinance practitioners. More about MFC at www.mfc.org.pl

About the MicroBuild Fund
The MicroBuild Fund was set up in September 2010. Habitat for Humanity International committed an initial $25 million to the MicroBuild Fund and an additional $10 million for technical assistance for microfinance institutions. The goal is to raise a total of $100 million for MicroBuild. Habitat for Humanity will leverage all donations to the fund, and participating microfinance organizations will match funding, making even more capital accessible to families in need of decent housing.