Housing Microfinance is now slowly getting recognized as an effective way to finance housing for low-income population in the developing world. The UN projection underscores this fact and states that by 2050, cialis 70% of the world's population will be living in urban areas, treat many of them in sub standard conditions. Compounding the problem, half of the adult population worldwide does not have an account at a formal financial institution. This shows that access to funding that low-income families can afford is a crucial element for the success of housing microfinance. Incremental housing through housing microfinance is an answer to this challenge. Incremental housing is a process by which a family builds their housing in stages as their resources permit.
Swarna Pragati housing microfinance started in 2011 in Delhi, was a good initiative by a few former bankers and had received adequate funding. Micro Housing Finance Corporation, which recently raised funding from Ronnie Screwvala's Unilazer Ventures, Shubham Housing Development Finance Company (Helion Venture Partners) and India Shelter Finance (Sequoia, Nexus) were other major players who had proved their worth in the segment.
Their success shows that housing microfinance is an effective way to meet the urgent housing needs of low-income families across the developing world, especially in countries like India where population is always a matter of concern. This also proved that microloans could be a useful tool for helping millions of people living in the world's slums to incrementally improve their conditions. Yes, it's time for all responsible MFIs to focus more on housing microfinance as a social obligation. While there have been investments in the micro housing finance space, most of the firms in the segment have focused on urban areas with a loan size of ` 3 - 4 lakh and above. Recognizing the need, last year ESAF Microfinance also included housing microfinance into the bouquet of products with a ticket loan size of ` 5 lac. Moreover, we focus on both urban and rural areas for balanced development of the economy.
At the same time, Government support is also required in the form of recognizing housing microfinance as an effective way to finance housing for low-income populations in the developing world. National and local laws that create a framework for granting sufficient tenure security is also mandatory.
K. Paul Thomas
Founder, Chairman & Managing Director