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.

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.