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Habitat for Humanity International’s 2014 Shelter Report highlights the importance of housing microfinance in addressing the need for affordable shelter around the world

Worldwide, half of the adult population does not have an account at a formal financial institution. Far fewer can get financing to purchase a home or an apartment.

ATLANTA (Oct. 7, 2013) — Habitat for Humanity International today released its “Shelter Report 2014 - Step by Step: Supporting Incremental Building Though Housing Microfinance.” The report highlights housing microfinance as an effective way to meet the urgent housing needs of low-income families across the developing world.

Habitat for Humanity’s 2014 Shelter Report focuses on incremental building— a method of improving housing one step at a time.

“Up to 90 percent of home construction in developing countries happens incrementally,” said Jonathan Reckford, CEO of Habitat for Humanity International. “People build their houses and communities as their resources and circumstances allow. Housing microfinance can support what is already happening naturally, allowing individuals to adapt and build as their needs change. Small loans make a big impact.”

The Shelter Report outlines the growing need for affordable shelter across the world, citing the 1.6 billion people currently living in substandard housing and the U.N. projection that by 2050, 70 percent of the world’s population will be living in urban areas, many of them in substandard conditions.

Compounding the problem, half of the adult population worldwide does not have an account at a formal financial institution. On average, only 3 percent of the population in developing economies has an outstanding mortgage. In many countries, that number drops to 1 percent, according to the World Bank. Yet access to funding that low-income families can afford is a crucial element for the success of incremental building.

As the need for housing swells and urban migration accelerates, the lessons of microfinance are relevant. As the Shelter Report describes, housing microfinance emerged out of the realization that microloans – small loans made available to people who cannot access the formal financial sector – could be a useful tool for helping the millions of people living in the world’s slums to incrementally improve their conditions. 

In the report, Habitat lays out several recommendations for increasing access to housing microfinance and supporting low-income families in their process of building and improving their homes in stages. These recommendations include recognizing housing microfinance as an effective way to finance housing for low-income populations in the developing world; national and local laws that create a framework for granting sufficient tenure security; government agencies that catalyze, facilitate and regulate housing microfinance; and capital and capacity building from multilateral development institutions to spur innovation and expansion of housing finance products.

Copies of the 2014 Shelter Report are available online now at www.habitat.org/gov.

About Habitat for Humanity International
Habitat for Humanity International’s vision is a world where everyone has a decent place to live. Anchored by the conviction that safe and affordable housing provides a critical foundation for breaking the cycle of poverty, Habitat has helped more than 3 million people construct, rehabilitate or preserve homes since 1976. Habitat also advocates for fair and just housing policies and provides training and access to resources to help more families improve their shelter conditions. As a nonprofit Christian housing organization, Habitat works in more than 70 countries and welcomes people of all races, religions and nationalities to partner in its mission. To get more information, to donate or to volunteer, please visit habitat.org.