MicroBuild Facilitates Dream Houses
A remarkable pilot has been started by the microfinance institution (MFI) Credicampo in El Salvador, with the support of the Triple Jump managed MicroBuild Fund and the Housing and Finance Innovation Centre of Habitat for Humanity International.
In the country’s poorest region, small entrepreneurs get to build their own house, with access to financial as well as technical support. A house they could otherwise only have dreamt of – their Dream Home!
Since this innovative programme started in January, more than 35 entrepreneurs have received a loan and technical assistance. It is expected that in the next 15 months, 300 more of Credicampo’s clients will be reached. And after this pilot, the MFI will begin offering its housing product throughout the rest of its branches in El Salvador.
Credicampo is an important investee of Triple Jump because of its social impact, its exclusive focus on rural areas, and its unique methodology that involves local development organisations in the credit process.
Seventy eight percent of Credicampo’s clients are rural and 34% of its portfolio is concentrated in agriculture and cattle, with housing loans representing 30% of the total portfolio, including acquisition, construction and improvements. Trade and services represent 25% and consumer and production, the rest.
Housing products began being offered six years ago in response to client demand. However, a specific product and lending methodology was not developed. It was only after Credicampo received a loan and technical assistance from the MicroBuild Fund, that real innovative housing finance could take place: a loan and technical assistance, with the support of the Housing and Finance Innovation Centre of Habitat for Humanity International. The technical assistance is focused on the product Vivienda Progresiva (progressive housing), which includes Construction Technical Assistance.
The MicroBuild Fund provides debt capital for housing solutions that financial intermediaries offer to their low-income end-clients. A unique feature of Habitat for Humanity International is that it provides funds and rolls out a complementary technical assistance programme to help financial intermediaries to develop and improve their housing products, so as to better serve their end-clients.