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Micro-finance of housing : a key to housing the low or moderate-income majority ?


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Author(s) : Bruce Ferguson
_Source : Environment and Urbanization, Volume : 11 Number : 1 Page : 185 — 199


This paper considers why most households in Latin America and the Caribbean remain unserved by traditional housing finance systems and how micro-finance potentially offers a key to help the low/moderate-income majority meet their shelter needs. The characteristics of micro-finance include small loan size for incremental upgrading of an existing dwelling or a new core unit, short repayment period, small or no subsidy, creative underwriting adapted to the conditions and prospects faced by low/moderate-income, technical assistance in documentation and building, and - sometimes - alternate forms of title as collateral. The article presents the work of the Bolivian NGO PROA as a successful case of micro-finance and draws lessons about the possible expansion of micro-finance in Africa, Asia and Latin America.