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Housing Microlending for Habitat Improvement

Enabling access to microfinance for habitat development in low-income communities is critical to improving the living and working conditions of low-income families. More than 80% of workers in India work in the unorganized sector and lack formal documents of identification, address, and income. The lack of clear land titles and property deeds keeps them out of the formal financial system—even when they are creditworthy—and prevents them from making significant improvements to housing.
Photo courtesy: Getty Images
Photo courtesy: Getty Images
Photo courtesy: Getty Images
Photo courtesy: Getty Images
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We build on our technical expertise in construction and social expertise in community mobilization to develop financial products specifically aimed at low-income housing finance. We play a crucial role as an incubator of solutions and an advisor on issues of housing and infrastructure finance for slum development. We also work with governments to ensure greater financial inclusion for workers in the informal sector, engaging with national-level task forces to implement the same.

Promoting women-Led Credit Cooperatives

MHT has promoted women-led credit cooperatives in urban districts of Gujarat, with head branches in Vadodara and Surat. The co-operatives specialize in individual loans as well as loans disbursed through Self-Help Groups (SHG) and Joint Liability Group (JLG) models.

Inclusive models of assessing credit worthiness

Families living in “informal” settlements are often unable to leverage the value of their land and housing assets and use them as collateral. And lending institutions are unable to assess the risk associated with such assets. Our model for assessing the credit worthiness of households with informal land arrangements and income sources is based on the borrowers’ financial capacity and willingness to repay. We also screen the underlying asset’s compliance with existing land management and urban planning systems to determine the property’s suitability for serving as collateral. This approach to collateralized housing loans for properties that are not “formal” but enjoy a high level of tenure security in the market can make market-based housing finance solutions accessible to more urban households.

Micro-Loan Products for Housing and infrastructure upgradation

MHT provides micro loans to women to improve access to housing and infrastructure. These Microlendings are used for constructing toilets, improving water and wastewater disposal facilities, making home improvements, and making resilience investments. We have also worked to devise unique microloan products to finance property tax backlogs. This has cleared the way for families to secure legal water and sanitation services in slums in MP, Bihar, and Jharkhand.

In the pandemic, my husband lost his job and we had no savings. We took up small jobs to cover our daily expenses. MHT members then introduced me to credit cooperatives to manage my finances better. They connected me with the right people who helped me open an account and save money. They also supported me in drawing out loans for my son’s college fees. We are working very hard to repay the money but I am glad that through MHT’s help I could secure my son’s future.
Naynaben Rajubhai Patil,
Nanavarachha, Surat
We had a tin roof in my house which considerably increased the inside temperature during the summer months. In the monsoon, rainwater would leak inside the house. Our living conditions were very poor. I reached out to MHT for help and they supported me with micro-loans to repair my house. We no longer face the same problems and can carry out daily functions in our home easily.
Rekhaben,
Prem Colony, Jaipur
The temporary tin roof of our house had made life difficult for us. We were unable to find suitable marriage prospects for my son as no girl wanted to live in a house with a temporary roof. Constructing a concrete roof became more important than ever. I approached banks for loans but I was denied as my housing documents were not considered appropriate. MHT helped me get the correct documents for my house and facilitated access to a home improvement loan for me.
Bhanuben Jadav,
Rajivnagar Slum, Ahmedabad
During the pandemic, the access route to our community toilet was closed. That’s when we realised the importance of having individual toilet facilities. We reached out to MHT to help us build a toilet for our home. MHT supported us financially by covering most of the cost of a new toilet. We only had to contribute INR 2,000. We were relieved to have our own toilet, which is safer and saves us a lot of time.
Janabai Baburao Dhalwale,
Gandhlipura, Amalner

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