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  • Center for Innovationin Shelter and Finance

    Housing Microfinance:Product Development Toolkit

    A toolkit for PractitionersMay, 2012

    Available at: www.habitat.org/CISF

    Financed by:

  • HFHI-CISF. Housing Microfinance: Product Development Toolkit, December 2011

    Habitat for Humanity International - Center for Innovation in Housing and Finance

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    2011 Habitat for Humanity International (HFHI). The content of this manual is owned by HFHI. To reproduce, transmit or distribute all or part of it you have to give credit to HFHI. Its commercial use is prohibited. If you need more information about this guide, write to Sandra Callison at scallison@habitat.org or daberra@habitat.org

    This toolkit is available in English and Spanish at www.habitat.org/cisf (English version) or www.habitat.org/lac/civf(Spanish version).

  • HFHI-CISF. Housing Microfinance: Product Development Toolkit, December 2011

    Habitat for Humanity International - Center for Innovation in Housing and Finance

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    Contents

    Acknowledgements.......................................................................................................Introduction to the Center for Innovation in Shelter and Finance (CISF).........Introduction to the Housing Microfinance Toolkit................................................Chapter 1. Housing microfinance...............................................................................Chapter 2. Objectives of market research and design of HMF products and

    services.........................................................................................................Chapter 3. A four-stage project...................................................................................Chapter 4. Detailed description covering the stages of the market research

    and HMF product and services development.......................................Stage A. Institutional evaluation and preparation for the MR&PD

    project.....................................................................................................Stage B. Market Research....................................................................................Stage C. Design of microfinance product and housing support services

    prototype...............................................................................................Stage D. pilot stage.................................................................................................

    Chapter 5. Housing support services..........................................................................A. Adequate housing............................................................................................B. Housing Support Services..............................................................................

    What are housing support services?.............................................................What types of housing support services are there?...................................Who offers housing support services?.........................................................What is needed to offer housing support services?...................................

    C. Construction technical assistance................................................................What is construction technical assistance (CTA)?....................................What is the CTA cycle?..................................................................................What are the steps to design and prepare CTA?.......................................What are the key points to offering CTA?................................................

    Chapter 6. Key lessons from the CISF.......................................................................References........................................................................................................................Glossary...........................................................................................................................

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  • HFHI-CISF. Housing Microfinance: Product Development Toolkit, December 2011

    Habitat for Humanity International - Center for Innovation in Housing and Finance

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  • HFHI-CISF. Housing Microfinance: Product Development Toolkit, December 2011

    Habitat for Humanity International - Center for Innovation in Housing and Finance

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    We are indebted to people from communities around the world for having shared their experiences and ideas on home improvement. We are especially thankful for the communities that participated during the market research and pilot projects, which we carried out in those countries.

    The following institutions have worked with us doing market research for the design of financial products and support services for home improvement:

    Chile: Habitat for Humanity Chile

    Costa Rica: Fundacin Unin y Desarrollo de las Comunidades Campesinas (FUNDECOCA)

    Dominican Republic: Banco de Ahorro y Crdito ADEMI, Banco de Ahorro y Crdito ADOPEM, Asociacin para Inversin y Empleo (ASPIRE), Fondo de Inversin para el Desarrollo de la Microempresa (FIME) and Mujeres en Desarrollo Dominicana (MUDE).

    El Salvador: Federacin de Cooperativas de Ahorro y Crdito de El Salvador (FEDECACES)

    Guatemala: Habitat for Humanity Guatemala

    Nicaragua: Fondo de Desarrollo Local (FDL)

    Peru: Credivisin S.A., Microfinanzas Prisma, Finca-Per, Financiera Edyficar and Caja Rural de Ahorro y Crdito-Promotora de Finanzas (Profinanzas)

    Uganda: Habitat for Humanity - Uganda and UGAFODE Microfinance Limited.

    Vietnam: Habitat for Humanity -Vietnam.

    Thank you for allowing us to learn with you and sharing your experiences.

    Acknowledgements

  • HFHI-CISF. Housing Microfinance: Product Development Toolkit, December 2011

    Habitat for Humanity International - Center for Innovation in Housing and Finance

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    We are particularly grateful for the contributions made to this guide by Habitat for Humanity staff at the national, regional and international office levels, and would also like to recognize the leadership of Maria Saenz, Belinda Florez and Mario Moran, from the Latin American and Caribbean Area office, in writing and compiling the majority of materials which were used for this toolkit.

    We are also grateful to external consultants who advised us and collaborated with us to make this toolkit possible. They include: Minor Rodrguez, Robert Lindenberg, Christine Little, Ed Bland, Sheila Bijoor, Lauren Clark, Delphoi Consulting, Joan C. Hall, Carter Garber, and Sandra Callison.

    Finally, we would like to thank MicroSave for the use of some of their tools and knowledge, which have greatly enhanced the quality and content of this Toolkit.

    This guide was created in part with financial support from the Citi Foundation, who contributed also to test the toolkit in the Dominican Republic. Funds were also contributed by the Multilateral Investment Fund/IADB to test the methodology in Peru and Bolivia. To them we are profoundly grateful.

  • HFHI-CISF. Housing Microfinance: Product Development Toolkit, December 2011

    Habitat for Humanity International - Center for Innovation in Housing and Finance

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    Introduction to the Center for Innovation in Shelter and Finance (CISF)

    Almost a quarter of the worlds population lives in substandard shelter, impacting family health, livelihood and education. Since 1976, Habitat for Humanity International (HFHI) has mobilized communities to build more than 300,000 homes for low-income families worldwide, resulting in improved security, health and education outcomes. Habitats for Humanitys 2,000 affiliates, in nearly 90 countries, continue this work using its original methodology, as well as innovating new ways to reach poorer families at greater scale. To address the growing quantitative and qualitative shelter deficit, new methodologies, actors, and approaches are desperately needed.

    HFHI has launched the Center for Innovation in Shelter and Finance (CISF or the Center) as an initiative to collaboratively work with a wide variety of actors in the public, private and third party sectors, many of whom have not yet applied their full strength to affordable housing. Only through the contributions of multi-disciplinary actors - such as financial service providers, urban planners, municipalities, grass-roots NGOs, water and sanitation experts, bi-lateral agencies, and advocacy groups - can innovative shelter and habitat solutions for the poor be sustained.

    The Centers goal is to serve as a place of knowledge, expertise, advice, and innovation, to enable key actors to serve millions of poor families to acquire adequate shelter. Although the housing microfinance sector is showing much promise, the supply of such services still lags far below the natural client demand (internal estimates show that less than 10% of servable demand is currently being met globally). A key objective of the Center is to accelerate the growth of this important sector. Under this objective, the Center offers institutional technical assistance to financial institutions and other organizations interested in designing housing microfinance (HMF) products aimed at low-income families, along with housing support services (HSS), that as well as being affordable for these families, are sustainable for the entities that offer them.

    The CISF offers the following services:

    Market Research and Product Design (MR&PD). Through this service, partner institutions are able to design housing microfinance products to allow their borrowers to build, repair, renovate, and extend housing progressively (in stages). This may also include pro

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