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52. In the past 10 years, 84 a growing number of housing microfinance programmes
have been initiated, offering loans to homeowners ranging from $300 to $5,000, 85
frequently with repeat lending opportunities and repayment terms of 1-15 years. In
comparison with enterprise microfinance, housing microfinance loans are generally
larger and given for longer periods. Housing microfinance loans are also much
smaller than mortgage loans, typically granted for shorter terms, and their target
population is that not served by formal private or public financial institutions. 86
Owing to their limited scope, housing microfinance loans are used mainly to finance
progressive improvements to housing (e.g. building sanitary amenities) and
expansions to an existing dwelling, or for the incremental construction of a home. 87
53. Housing microfinance is offered by a wide variety of institutions including
microfinance agencies, such as Grameen Bank and affiliates of the Accion
organization; banks and commercial institutions, such as HDFC Bank in India and
the CEMEX company in Mexico (the Patrimonio Hoy programme); and
intergovernmental organizations and NGOs specializing in shelter provision, such as
the Rural Housing Loan Fund in South Africa and Habitat for Humanity. 88 A
distinction can be made between financial institutions offering micro enterprise
loans and institutions whose main purpose is improving the shelter situation of the
poor, which may or may not be financial institutions. 89
54. As is the case with microfinance agencies, most housing microfinance
initiatives originate in developing countries and emerging markets. Latin America
has the largest housing microfinance portfolio. 90 Housing microfinance is also
growing in Asia and, to a lesser extent, in Africa. 91 Examples of lenders include the
Kuyasa Fund (South Africa), the Jamii Bora Trust (Kenya), KixiCasa (Angola),
PRIDE (United Republic of Tanzania), BRI (Indonesia) and CARD (Philippines). 92
The size of some housing microfinance programmes may be considerable; Grameen
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85
86
87
88
89
90
91
92
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Although microfinance institutions such as Grameen Bank have had housing loan programmes
since the 1980s, housing microfinance began to attract significant attention only in the last
10 years.
Some housing microfinance institutions offer loans up to $8,000. UN-Habitat, Housing for All,
p. 18.
Center for Urban Development Studies, Harvard University Graduate School of Design,
Housing Microfinance Initiatives: Synthesis and Regional Summary: Asia, Latin America and
Sub-Saharan Africa with Selected Case Studies, May 2000.
World Bank, Housing Finance Policy in Emerging Markets, p. 399; Bruce Ferguson, “Housing
Microfinance: A Key to Improving Habitat and the Sustainability of Microfinance Institutions”,
Small Enterprise Development, vol. 14, No. 1 (March 2003), p. 21.
UN-Habitat, Financing Urban Shelter, pp. 106-112; Housing Finance in Emerging Markets:
Connecting Low-Income Groups to Markets, Doris Köhn and J.D. von Pischke, eds. (Berlin,
Springer, 2011), pp. 33-35.
UN-Habitat, Housing for All, pp. 12-13; UN-Habitat, Financing Urban Shelter, pp. 103-104.
Such as MiBanco in Peru, BancoSol in the Plurinational State of Bolivia, Banco Solidario in
Ecuador, Banco Ademi in the Dominican Republic, Calpia in Honduras and Genesis Empresariál
in Guatemala. UN-Habitat, Housing for All, p. 22; UN-Habitat, Financing Urban Shelter,
p. 106.
FinMark Trust, Scoping the Demand for Housing Microfinance in Africa: Status, Opportunities
and Challenges (2009).
Annika Nilsson, “Overview of Financial Systems for Slum Upgrading and Housing”, Housing
Finance International, vol. 23, No. 2 (December 2008), pp. 20-21; S. Merill and N. Mesarina,
“Expanding Microfinance for Housing”, Housing Finance International, vol. 21, No. 2
(December 2006), p. 21.
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