INTRODUCING MICROFINANCE HOUSING INTRODUCING MICROFINANCE HOUSING LOANS LOANS An initiatives Undertaken by An initiatives Undertaken by YOSEFO YOSEFO A presentation at the African Microfinance A presentation at the African Microfinance conference conference August 12-15, 2013 August 12-15, 2013 Durban, South Africa Durban, South Africa By Altemius Millinga Executive Director P.O.Box 75379 Dar es Salaam Tanzania Email: amillinga@yosefo.org
Profile of YOSEFO Profile of YOSEFO • YOSEFO is a Microfinance Institutions • YOSEFO is a Microfinance Institutions • Established in 1997 • Established in 1997 • To date Operate through network of five branches ( • To date Operate through network of five branches ( Mbagala and Mizizima in Dar es salaam , Ifakara Mbagala and Mizizima in Dar es salaam , Ifakara (Morogoro region), Zanzibar and Kilwa (Lindi region) (Morogoro region), Zanzibar and Kilwa (Lindi region) • 24,860 clients • 24,860 clients • 33 clients for rural housing (pilot): Portfolio Tzs • 33 clients for rural housing (pilot): Portfolio Tzs 22,500,000 22,500,000 • Outstanding loan balance as of June 30 th , 2013 ; Tzs • Outstanding loan balance as of June 30 th , 2013 ; Tzs 6.24 billion or US$ 3.9 million 6.24 billion or US$ 3.9 million • 52% of clients (rural) • 52% of clients (rural)
FACTS ABOUT RURAL HOUSING IN FACTS ABOUT RURAL HOUSING IN TANZANIA TANZANIA • The problem of rural housing is the improvement of its • The problem of rural housing is the improvement of its quality and durability. quality and durability. • All families own their own homes • All families own their own homes • Majority built on non durable materials- mud and pole • Majority built on non durable materials- mud and pole walls, earthen floor and grass thatched roof walls, earthen floor and grass thatched roof • Most rural houses require significant maintenance and • Most rural houses require significant maintenance and pose a serious health risk to the occupants pose a serious health risk to the occupants • A rural resident can have own as many as 500 cows but • A rural resident can have own as many as 500 cows but his housing is poor his housing is poor • Policy makers are pre-occupied by urban housing • Policy makers are pre-occupied by urban housing issues issues
A HOUSE OF ONE OF YOSEFO’S CLIENT A HOUSE OF ONE OF YOSEFO’S CLIENT • .
WHY IS HOUSING/SHELTER WHY IS HOUSING/SHELTER IMPORTANT FOR THE RURAL POOR IMPORTANT FOR THE RURAL POOR • Improves the quality of life • Improves the quality of life • Creates conditions for attainment of better • Creates conditions for attainment of better health, hygiene and education health, hygiene and education • Stimulates economic activities • Stimulates economic activities • Enhances productivity • Enhances productivity • Motivates savings • Motivates savings • It is basic need, a personal asset, and a • It is basic need, a personal asset, and a productive asset- produce goods, store inventory, productive asset- produce goods, store inventory, and conduct business. and conduct business.
Housing needs of the rural poor Housing needs of the rural poor 3 or 4 bed room 3 or 4 bed room 1 Bed room for parents 1 Bed room for parents house house 2 bed rooms for children 2 bed rooms for children – boys and girls – boys and girls Spare room for visitors Spare room for visitors Spare room for visitors Spare room for visitors Grain store Grain store small shop (Kiosk) small shop (Kiosk) Other buildin gs Other buildin gs Animal shed/building Animal shed/building Improvement of Improvement of Connecting to Connecting to electricity/solar electricity/solar services services Domestic Water system Domestic Water system Latrine Latrine
HOUSING MICROFINANCE MODEL HOUSING MICROFINANCE MODEL CORE PRINCIPLES CORE PRINCIPLES CORE PRINCIPLES CORE PRINCIPLES • Sequential financing approch • Sequential financing approch • Sequential financing approch • Sequential financing approch • User focus • User focus • User focus • User focus • Client control the building this increases the level • Client control the building this increases the level • Client control the building this increases the level • Client control the building this increases the level of ownership and satisfaction by the clients and of ownership and satisfaction by the clients and of ownership and satisfaction by the clients and of ownership and satisfaction by the clients and also helps ensure that the assistance offered is also helps ensure that the assistance offered is also helps ensure that the assistance offered is also helps ensure that the assistance offered is affordable and fits within a family’s livelihood affordable and fits within a family’s livelihood affordable and fits within a family’s livelihood affordable and fits within a family’s livelihood strategy. strategy. strategy. strategy. • Are priced to ensure long term financial viability • Are priced to ensure long term financial viability • Are priced to ensure long term financial viability • Are priced to ensure long term financial viability of the provider (YOSEFO) of the provider (YOSEFO) of the provider (YOSEFO) of the provider (YOSEFO)
Microfinance, Agricultural Microfinance, Agricultural Microfinance loans and rural housing Microfinance loans and rural housing Agricultural Agricultural Housing Housing Microfinance Microfinance microfinance microfinance Microfinance Microfinance loans loans
A rural microfinance client- Looking at the bigger A rural microfinance client- Looking at the bigger picture picture Low productivity of Low productivity of Low level of Poor markets agriculture agriculture education Shelter Shelter Shelter Shelter Education Education Education Education Use of Use of Surrounded by Poor Superstition Microfinance Microfinance infrastructure Loans Loans Extended Extended Health Health Family Family Contribution to Taxes- Money lenders development projects 9
Who are the clients Definition Definition Definition Definition Existing YOSEFO clients ( Micro enterprise loans) Existing YOSEFO clients ( Micro enterprise loans) Existing YOSEFO clients ( Micro enterprise loans) Existing YOSEFO clients ( Micro enterprise loans) Must have joined a the agricultural loans program Must have joined a the agricultural loans program Must have joined a the agricultural loans program Must have joined a the agricultural loans program Permanent resident in a village Permanent resident in a village Permanent resident in a village Permanent resident in a village In general, rural poor households that do not In general, rural poor households that do not In general, rural poor households that do not In general, rural poor households that do not enjoy access to traditional housing finance enjoy access to traditional housing finance enjoy access to traditional housing finance enjoy access to traditional housing finance
APPROACH: product linked to APPROACH: product linked to agricultural microfinance loan agricultural microfinance loan Existing YOSEFO clients ( Micro enterprise loans) Existing YOSEFO clients ( Micro enterprise loans) Existing YOSEFO clients ( Micro enterprise loans) Existing YOSEFO clients ( Micro enterprise loans) Must have joined a the agricultural loans program Must have joined a the agricultural loans program Must have joined a the agricultural loans program Must have joined a the agricultural loans program Permanent resident in a village Permanent resident in a village Permanent resident in a village Permanent resident in a village In general, rural poor households that do not enjoy access In general, rural poor households that do not enjoy access In general, rural poor households that do not enjoy access In general, rural poor households that do not enjoy access to traditional housing finance : focus on land with title deeds to traditional housing finance : focus on land with title deeds to traditional housing finance : focus on land with title deeds to traditional housing finance : focus on land with title deeds
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