Microfinance & financial inclusion

Our micro-loans fund break the cycle of poverty through economic empowerment

We work with dozens of microfinance institutions worldwide through our micro-loans fund "MicroBuild" and the expertise we provide them to help as many people as possible. Thanks to micro-credit, we enable families and communities to fight housing poverty.

Why is micro-finance so important?

Micro-loans are a key tool in financial inclusion: giving socially excluded population access to financial services. With 800 million people living in urban slums and 40% of the population on less than $2.50/day – that’s a lot of people who often don’t have access to banks.

Two billion people lack access to regulated financial services (e.g. credit, savings and mortgages)
Less than 10% of households have access to mortgages in many countries where we work

Building homes step by step

In many developing countries, traditional homebuilding is simply not an affordable solution – even for the local middle class. Housing microfinance is a tool for families to improve their living conditions gradually. Microloans have relatively short repayment periods, small loan amounts and little or no collateral required.

Typically, families use them for roof reconstruction, adding toilets and running water, installing heating and better insulation. In developing countries, 70% of all housing investment happens through incremental building (gradually improving their home) rather than new builds.

How microfinance works

Microfinance is a great way to make very small loans (e.g. £5 or £50) accessible to the poorest people on the planet. Just the same way that we go to the bank to borrow, except this time it’s a nonprofit loan. The aim is only to serve more and more people.

We do not issue microfinance loans ourselves, but collaborate with partner microfinance institutions. While partners provide loans, we provide training to homeowners on financial responsibility and managing their loans. We also offer construction assistance and evaluation of the quality of work completed.

How incremental building works

how microfinance works graphic

A typical problem in many developing countries is not the lack of housing but decay and dilapidation of the current housing stock. Microcredit helps solve this situation by gradually improving homes.

Our micro-credit fund: Microbuild

Launched in 2012, our $100 million MicroBuild Fund is a vibrant private sector response to affordable housing, supplying the capital and the expertise needed for housing microfinance. The Fund…

Launched in 2012, our $100 million MicroBuild Fund is a vibrant private sector response to affordable housing, supplying the capital and the expertise needed for housing microfinance.

The Fund supplies capital and technical expertise to microfinance institutions, to increase the availability of microloans to their poorest customers and ensure the sustainability of the programme:

Families repay these small loans
Our partners are then able to provide more housing loans
More families can borrow money, repay and so on

Capital is circulated within communities, expanding access to housing improvements for even more families. MicroBuild works with institutions that demonstrate good financial standing and a strong commitment to financial inclusion for the most vulnerable communities.

The end goal? Economic empowerment.

Our ultimate goal is to create a vibrant marketplace within each community. One that offers plenty of choices for all families (including the poorest, so-called “bottom of the pyramid”) to access housebuilding material, improve their homes and build their own business.

Access to affordable finance is therefore a crucial way to give partner families the purchasing power needed to improve their lives. Entrepreneurs can then feel the demand for their products and services from this segment of society, thus encouraging and enabling the market to thrive.

Working through microfinance institutions (MFIs), we support the development and roll-out of microcredit, provide appropriate capital and supports families with technical skills to enable them to self-build.

Maximise your donation

Donations are leveraged by a ratio of 1:10 by the MicroBuild Fund and provide sustainability by supporting technical assistance to partner institutions and families. Every £50 we receive can support an entire family or an average of 5 people with improved shelter and technical assistance.

This means that on a bigger scale:

£50,000 would enable 1,000 families to get home improvement loans supporting over 5,000 people.
£10,000 would enable 200 families to get home improvement loans supporting over 1,000 people.