The World Bank Group’s “Expanding Housing Finance to the Underserved in South Asia” report aims to turn the spotlight on the lack of housing finance in South Asia and discusses the challenges of such finance in relation to microfinance. The report mentions that implementing a functioning property registration system would allow more potential borrowers to use their property as collateral on their loans. Some states, such as Pakistan and Sri Lanka, have already made efforts towards updating registration systems through computerization of land records. The author of the report point out that housing finance is in such high demand in Afghanistan that some microfinance clients apply for housing loans under the guise of a business loan. Some of the main obstacles for microfinance institutions (MFIs), however, are that many have minimal experience in housing microfinance and many do not have sufficient funds to support housing loans. Cultural constraints that prohibit women from any ownership or title to property also pose an issue to MFIs that aim to empower women through microloans. High land prices, especially in urban areas, are also a barrier. According to the report, Bangladesh remains the country with the most developed housing microfinance network in South Asia [1].
By Diana Baide, Research Assistant
[1] “Expanding Housing Finance to the Underserved in South Asia” by Tatiana Nenova, October 2010
MicroCapital. “MICROFINANCE PAPER WRAP-UP: Building Houses, Financing Homes; by Anamitra Deb, Ashish Karamchandani and Raina Singh; Published by Monitor Incluse Markets” by Matthew Fox, 21 September 2010
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