Maximizing Choice: Diverse Approaches to the Challenge of Housing Microfinance

The demand for HMF has grown exponentially throughout the world as more and more clients of microfinance attribute a portion of their funds to improving their homes. Clients are demanding more flexible methods of financing their home improvements, and institutions are responding to this need. Housing microfinance has become a viable and growing product line for all kinds of MFIs. Historically, it has been the traditional MFIs that have led HMF (occasionally becoming HMF-specialized institutions), and upscaled microfinance banks that have led bank-channeled HMF. More recently, downscaling commercial banks with microfinance product lines have entered the market. This paper seeks to review some of the most recent innovations in housing finance, focusing more specifically on the role of housing microfinance. It draws from five studies conducted in 2007, which explored housing finance for the poor in Vietnam, Morocco, Kenya, and El Salvador, as well as the role of commercial banks in this market worldwide.