Habitat homeowner, Kenya

Microfinance

Europe, Middle East and Africa

About 97 to 99 percent of people in sub-Saharan Africa do not have access to formal financing –  credit, savings, mortgages – that will let them start building or improving a home. Traditionally, they build home gradually as their resources allow. These families cannot afford a long-term, traditional mortgage. They build in stages – creating a makeshift shelter and eventually replacing it with permanent materials and expanding it. 

 

How does housing microfinance work?

Housing microfinance loans have relatively short repayment periods, small amounts, and little or no collateral required. Typically, families use them for roof reconstruction, adding toilets and running water, installing heating and improving insulation.
Habitat does not issue microfinance loans itself but collaborates with partner microfinance institutions. While partners provide loans, Habitat helps partners to develop housing loans, provides trainings to homeowners on managing their loans, and offer construction assistance.

Where does housing microfinance work?

In partnership with the Mastercard Foundation, Habitat for Humanity through its Terwilliger Center for Innovation in Shelter is providing technical assistance to six leading financial institutions in Uganda and Kenya to develop housing microfinance products and services to serve people living on less than US$5 per day. 
The “Building Assets, Unlocking Access” project has helped more than 40,000 families in Uganda and Kenya access loans to secure adequate housing and improve their living conditions. Moreover, US$30 million in capital has been mobilized for the advancement of incremental housing microfinance loans across the two countries. 

Building Assets, Unlocking Access. Kenya & Uganda.

Additional resources:

Housing Microfinance Clients Profiles in Kenya and Uganda

This publication, produced for the Building Assets, Unlocking Access project, offers a snapshot of housing microfinance clients’ demographics, income, living conditions and typical home improvements done with housing microfinance loans. The project is reaching not only informal workers with unsteady incomes but also salaried employees, the income level of at least 76% falls under US$10 per day and at least 39% falls under US$5. Through client stories we see how housing microfinance helps the clients not only to improve their homes but their quality of life.

infographics - in Africa only 15% can afford a mortgage

Infographics on housing microfinance