I’m Aysha and over the next six months I will be sharing my adventures and experiences with you. I’m from Toronto, Canada on an internship here in South Africa on behalf of Rooftops Canada, a non-profit organization that provides technical expertise and leadership in low-cost housing and human settlements development around the world. Before joining Rooftops Canada I was doing my masters in Local Economic Development, and worked at TWC as a planning consultant – developing, researching and advocating for affordable housing. I’ll be using this blog to express my thoughts (and confusion!) with you, and hope that it can become a mutual learning space to help better understand opportunities on how to provide and finance affordable housing in Africa and the rest of the world.
My key role here at CAHF is to conduct a research study entitled “Evidence of housing microfinance in Southern Africa”. I’ve been told that the purpose of the study is to “build a methodology for understanding and tracking the practice of housing microfinance, both formal and informal”. Given that my background has been mostly on the development and research side of affordable housing, I had assumed that the task would be pretty straight forward. But is it ever really that way?
Through some preliminary research and getting a better understanding of housing microfinance, I didn’t understand the purpose of the research. I’m fairly technical in my practice and have difficulty with theoretical tasks where I can’t see the motive. I always ask myself, ‘so what?’.
Well just over a week ago I attended a conference hosted by MFSA (Micro Finance South Africa), and to my knowledge there was very little representation of lenders who work with lower income households. Since I’m new to the micro-finance world, I took this opportunity to ask the delegates about what they did and how there might be a connection between micro-finance and housing. Many of the attendees were debt collectors, and even though personally I’m not in any financial debt (yet, travelling may change that!), I was intimidated by them! Turned out that they weren’t so scary, and one of them actually told me that if the borrower had lost their job, they would leave them be. And if they did have a job, the collectors would work with their employers to help them pay back the debt. Debt collectors are less scary now! Debt collectors aside, the conference focused a lot on the ‘business’ side of running a micro-finance agency, and less on new lending opportunities. I introduced the idea of housing microfinance to those I spoke with and their initial response was that the loans would be too large for them to carry and the repayment time may be too long. This made me realize that there is disconnect between housing and microfinance, and there is a need to better understand and distribute information on how they may be united.
After the conference and having read a bit more on the topic, I have established a better understanding of the ‘gap’ in general knowledge of HMF. It is clearer for me to understand how to approach the topic and who the audience should be, that is, government and lenders. While there is an element of financial literacy and community development that evolves from HMF on the borrowing side, I think that there is plenty of literature around those subjects already and those of us in the affordable housing field and the borrowers, are well aware of the many, and often vital, impacts HMF and adequate housing have on households and communities. So this research will go out to the lenders and government agencies. The research will aim to find evidence to demonstrate that: 1) there is a largely untapped market for housing microfinance; 2) While there are risks in HMF there are many more opportunities; and 3) HMF will have multiplier effects that will benefit the borrowers, lenders and the public sector.
When I look back to the task I’ve been asked to do, I’m not certain if the research I’m proposing is suitable, but I hope that the thought process is a step in the right direction.