Housing Micro-Finance

Buying a house is difficult for poor people the world over. In Africa, most of the urban poor have irregular incomes, no social safety net and no credit options. Acquiring land and building a home requires incredible determination.

A family’s first home is often a shack, which they improve and expand over many years. People make do with their savings and high-interest loans from money-lenders. Any money for housing competes with pressing demands for school fees, for health care -- for basic survival.

Although micro-credit systems to support economic development are well established in many parts of the world, micro-finance for housing is in its infancy, especially in Africa.

Rooftops Canada and its African partners are developing micro-finance models to support housing in low-income communities. This usually starts with savings and group loans to secure land and install basic water supply. When the group loans are re-paid, individual households borrow to improve and add on to their houses. Rooftops Canada’s partners provide technical support to ensure the best possible housing.

In Kenya, the National Cooperative Housing Union (NACHU) makes loans to housing co-op members that first save 25% of the loan value as a deposit. Some of NACHU’s lending capital comes from Canadian housing cooperatives.

The emerging model in Tanzania makes use of housing project development services from WAT - Human Settlements Trust while a savings & credit cooperative handles the financial side.

The Kuyasa Fund in South Africa is a specialized housing micro-finance institution with over 6,000 clients. It has a cutting-edge digital wireless loan system linked to its in-house data base and management systems.

Micro-finance experiences have been shared through regional workshops and exchanges in Dar es Salaam (2004 and 2008), Cape Town (2006) and Nairobi (2007). The continuing challenge is to refine models and scale them up.

Rooftops Canada is active in the emerging global network of agencies, donors and financial institutions engaged in housing micro-finance. It takes part in the Consultative Group to Assist the Poor (CGAP) - Housing Micro-Finance (HMF) Working Group.

An exciting collaborative partnership with FinMark Trust in South Africa and Habitat for Humanity (Africa Region) led to a vibrant workshop in Dar es Salaam in May 2008. Over 120 participants from 20 countries shared experiences and helped develop new strategies for housing micro-finance in sub-Saharan Africa.

Rooftops Canada is working with Canadian investment, housing finance and legal experts to raise grants and capital for housing micro-finance in Africa. Elements of the strategy include guarantees, loans and grants from Canadian ethical or solidarity funds, cooperative and social housing institutions. The Rooftops Canada Africa Housing Fund will soon be launched with an initial capital target of at least one million dollars with a projected growth several times that amount. CHF Canada has championed the cause by offering $100,000 to back up the fund.

Micro-Financing Improves Housing in Dar es Salaam [March 2008]

Creating Economic Opportunities for the Improvement of Housing [February 2007]

Building Capital for Housing Micro-Finance [August 2007]

Rooftops Canada HMF Power Point presentation

Rooftops Partners: NACHU, WAT, Kuyasa Fund