The Impact of Housing Microfinance: An Independent Institutional and Social Impact Evaluation of Two Housing Microfinance Products in South India
This qualitative assessment is intended to help Habitat, its partners and industry stakeholders to understand the impacts, both positive and negative, on low-income households that access housing microfinance loans and chart a future course of action. Additionally, the assessment evaluates the financial and operational performances of the housing microfinance products of ESAF Microfinance and Investments Pvt Ltd (EMFIL) and Growing Opportunity Finance (India) Private Ltd (GOF).
A Qualitative Impact Protocol (QuIP) evaluation methodology was used to measure the social impact of housing microfinance and an institutional assessment was conducted to understand the performance of the housing microfinance product. This document is an abridged version of the study findings.
The following recommendations are made based on the findings of this study:
- At the client level, continued emphasis on financial management, education and counselling will be important as low-income households increase access to more financial products and services and are dealing with multiple loans with multiple tenors;
- At the institutional level, strengthening of staff capacities, simplification of documentation, having a dedicated cadre for portfolio development will position the MFIs for growth of the housing microfinance portfolio;
- At the sector level, stakeholders such as Habitat for Humanity, financial institutions, regulators, etc. need to focus on innovation within housing microfinance that will respond to the needs and preferences of clients based on their region, location, type of housing activities and customer income flows. Households obtaining housing microfinance loans need to be supported by a thriving housing market with the availability of various support services such as design information, innovative products and services, linkages made between quality suppliers of construction materials and the low-income communities, and access and information to acquire a land title.