Housing Finance for the Poor: El Salvador
This case study explores the socio-economic, political and environmental factors that have contributed to the growth of housing finance in El Salvador. It describes how two large MFIs, namely, Apoyo Integral (Integral) and ACCOVI have responded to these opportunities. Integral and ACCOVI initiated housing lending and currently manage housing finance portfolios totaling over $26 million. The paper lists factors that contributed to El Salvadors success in providing housing finance for the poor. They include:
- Influx of international aid responding to the civil war in the 1980s and the earthquakes in 2001;
- Easy availability of credit;
- Liquidity and competitiveness of the financial services sector;
- Modern land registry system;
- Government support for housing for the poor;
- Private sector housing initiatives.
Consistent donor funding has helped to create strong financial institutions with professional staff, sophisticated management information systems and adequate liquidity. Strong competition has led to diversification of housing finance products. Housing-focused institutions have maintained strong commitments to their social missions to address the housing needs of the Salvadoran population.