December 17, 2008
LATIN AMERICA—The Multilateral Investment Fund (MIF), a branch of the Inter-American Development Bank, has approved funding to Habitat Latin America/Caribbean for the initiative “Strengthening housing microfinance systems in Honduras and Peru.” The project aims to improve access to housing microfinance and construction services for low-income residents in Honduras and Peru, benefiting a total of 7,100 families: 2,100 during the pilot stage and 5,000 additional families thereafter.
Over the past three years, Habitat LAC has explored ways to develop sustainable lending models that serve the lowest income sectors of the region. Here, non-commercial housing alternatives such as government subsidy programs and private loans both fall short of meeting the construction needs of the majority of the region’s poor, who are slowly expanding and improving their homes as time and funds allow.
Housing microfinance, in contrast, offers low income families affordable loans for each step in the progressive housing process: acquisition of a lot, building, expanding and improving the home. The majority of low income families across Latin America and the Caribbean can afford a series of small, short-term loans.
The intent of the project is to develop competitive markets for housing microfinance, and create sustainable opportunities for low-income families. It will be the first project financed by the MIF that addresses this particular subsector, providing opportunities for new knowledge and capital. The total cost of the project is US$1.2 million, with roughly 70% of the funding provided by MIF technical cooperation, and 30% by Habitat LAC.
For more information, contact Maria Teresa Morales at MMorales@habitat.org .