As one of the largest expenses for families, housing represents a challenge and an opportunity for creating new financial tools and reshaping investments. Housing microfinance makes up only a small fraction of current microfinance practices in developing countries, even though it is clear small loans could be helpful for families building incremental housing. To provide an alternative to borrowing money for housing, which often presents more risk in natural disaster-prone areas like the Philippines, Habitat for Humanity and Citi Foundation partnered to start the Home Improvement Microsavings Program.
The pilot program provided financial education, a commitment savings product for fixed, regular payments, and technical assistance for construction. Working with both urban and rural banks in the Philippines, the program showed some promise toward being helpful for families to improve their savings, but a major concern was the amount of monthly savings required. Due to the high cost of housing improvements, however, from this pilot alone it seems that commitment savings aren’t a full nor effective solution to meeting the home improvement needs of low-income families.
Source:
Habitat for Humanity. (2015) Saving Up: Lessons from the Citi-Habitat Home Improvement Microsavings Pilot Program. Habitat for Humanity: Center for Innovation in Shelter and Finance.
Link: https://www.habitat.org/our-work/terwilliger-center-innovation-in-shelter/publications-videos