Microcredit for building your house?

Source : Microcapital

Should microloans be granted for personal use? In South America the IDB regional bank, roughly the equivalent of the World Bank for countries south of the USA, believes so. It has released 10 million dollars in loan guarantees to Patrimonio Hoy, a microfinance institution (MFI) created by the leading Mexican cement company, specialising in loans for home building and renovation.

Since 2000, Patrimonio Hoy (literally “property today”) has given loans to 265,000 South American households. Loans from this MFI are aimed exclusively at purchasing cement, concrete, steel and other building materials, as well as paying for local workers. IDB’s goal is to help this business model to grow in importance and reach 750,000 low-income families within 5 years, on a “self-build” principle. In Mexico alone, a shortage of decent housing affects 35 million people, who are often the first victims of natural catastrophes.