Our housing microfinance projects are premised on the very strong belief that anyone with some level of earning is able to own a house and that it is lack of the initial capital that hinders most people from moving building their own homes or improving the homes they are living in.
Habitat for Humanity® Kenya (HFH Kenya) enables low income earners access that initial capital in two ways. As an organization, HFH Kenya solicits funding from individuals, corporations, governments and foundations that strongly believe that people should not live in substandard accommodation and are ready and willing to donate towards elimination of poverty housing. Secondly, we organize individuals, within communities, to come together and mobilize savings from their earnings as farmers, or low income earners towards construction of their own homes.
Once individuals with a desire to improve their housing conditions have been formed into groups, HFH Kenya staff train them on financial management and how to generate savings. The group members meet regularly, get to know one another and establish trust among themselves. Once this is done, they are ready and willing to take on the risk of guaranteeing one another for the loans they will take for housing construction or home improvement.
At this point, HFH Kenya helps individual members within the group to come up with housing design, which are then quantified in terms of how much it will cost to construct the house.
The cost is then divided into three and the homeowner provided with two to three incremental loans to enable them start and complete the construction of their homes.
The first loan is provided to enable the homeowner put up the foundation slab. His/her group of five members undertake to pay the loan for him in case s/he defaults. S/he is expected to pay this loan in between 6 to 24 months.
On successful repayment of the first loan, a second loan is provided to the homeowner to enable him/her wall and roof the house and put doors. At this point s/he can move into the house. S/he will be expected to repay this loan within 36 months.If the homeowner so desires, s/he can take a final loan for final finishes to the house.
The incremental loaning enables a homeowner construct a decent, durable house within a 48 months period while repaying the loan and does not, therefore, place an excessive debt burden on the owner and repayment rates using this methodology average 95%.