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Case Study: Housing Loans


AKAM: Housing MicrofinanceFMFI Syria’s clients are operating a small concrete brick making factory in Syria. Such locally produced construction materials are needed to support local housing refurbishment and renovation projects.One of the key product development priorities for AKAM in 2010 was the development of a housing portfolio and methodology throughout six countries. Significant progress has been made on this front; many AKAM institutions are offering loans for the refurbishment and renovation of homes. By providing credit to poor families to restore and upgrade their homes, AKAM institutions are contributing to genuine improvements in the quality of life of its constituents.

In Afghanistan, FMFB-A piloted a habitat improvement product in 2008. With the support of IFC, a housing microfinance loan product was developed.

As of December 2010, FMFB-A had 5,003 outstanding housing improvement loans and an outstanding total housing loan portfolio of US$ 6,759,010. This product is available in 21 urban branches and now FMFB-A is looking at adapting the product for rural areas – conducting a rural demand and repayment capacity survey to develop the most suitable product for these areas.

In addition, in collaboration with the Aga Khan Planning and Building Services, Pakistan and the Aga Khan Foundation USA, along with a grant from the United States Agency for International Development, FMFB-A will be providing construction advisory services in 2011.

In 2010, the agencies took the first step and developed guidelines for the construction and retrofitting of non-engineered buildings. Based on those standards, FMFB-A will provide construction appraisal and advisory services and promote innovative housing upgrades.

Construction advisory services consider a number of factors. These include site and construction material selection and construction design with regards to disaster mitigation, particularly in earthquake prone areas; and material selection and construction design with regards to sustainability, energy efficiency, sanitation and other health aspects. If these factors are taken into consideration, the housing infrastructure that is insufficient in both quantity and quality can be improved.

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