Microfinance of Housing: A Key to Housing the Low or Moderate-Income Majority?
Presents the work of a Bolivian NGO, PROA, as a successful case of microfinance and draws lessons about the possible expansion of microfinance.
Looks at why most households in Latin America and the Caribbean remain unserved by traditional housing finance systems and how microfinance potentially offers a key to help the low/moderate-income majority meet their shelter needs.
Concludes that microfinance of housing has the potential to support the incremental building process and connect the low/moderate-income majority in many low and middle-income countries with formal sources of capital. Microfinance of housing clearly offers scope far beyond the extent of its current practice. Reaching this potential depends largely on solving the key problems of:
- Cost and affordability;
- How to adequately compensate lenders;
- Maintaining affordability for households.