Housing Microfinance

Novel Solutions for Low Income Seniors: Housing Microfinance

Most of shelter subsidies or grants from the rich governments are very useful sources of income for poor and helpless seniors; however, relying on the temporary help may not be sustainable especially when a government is trying to thinly spread its subsidies over many entities with great financial needs. To promote more sustainable solutions for low income seniors, microfinance can be a very effective solution to tackle senior poverty issues. Among senior poverty issues, the most pressing issue lies in the lack of reliable shelters available to protect seniors’ wellbeing in Vancouver. That is why housing microfinance become an important and reliable source that would ensure seniors’ financial security and that would respect seniors’ desire to lead independent lives. What is housing microfinance, then? Housing microfinance is the small amount of loans granted to low income people for renovation of an existing home, construction, or land acquisition, etc. This loan is offered by “financial institutions, government agencies, or NGOs” and so on.

For the primary characteristics of housing micro loans, please refer to the above table developed by CGAP.

SIZE	Varies, but generally 2–4 times larger than average working capital loans.
TERM	Usually 2–24 months for home improvements, and 2–5 years for land purchase or construction
TERM INTEREST	Same as standard working capital loans or slightly lower
DELIVERY METHOD	Almost always provided to individuals, rather than to groups
COLLATERAL	Mostly unsecured; co-signers often used; real guarantees may be used; formal ownership of dwelling or land may be required; savings sometimes used as a guarantee (may be compulsory)
TARGET CLIENTELE	Low-income salaried workers; microenterpreneurs primarily in urban areas; poor people
OTHER SERVICES	Sometimes accompanied by land acquisition, land registration, and construction (including self-help building techniques)

Based on the article, “Housing Microfinance Initiatives: Synthesis and Regional Summary,” by Harvard University Graduate School of Design, the concept of shelter can be interpreted in terms of “a basic human need,” “:a personal asset,” and “productive assets in generating income.” The most important and relevant concept to our discussion is the notion, a“housing as an investment.” According to the article’s findings, personal property could be utilized to generate profits by turning the personal place into a commercial place to “produce goods, store inventory, and conduct business.” In other words, low income seniors who would normally cannot afford to rent premise for small business could be benefited from “home-based micro-enterprise.” For instance, seniors may want to rent out additional space for the purposes of either “residential accommodations or commercial microenterprises.” Low income seniors could also be at advantageous positions when the land prices appreciate as time goes on. Low income seniors may continue to work as home-based micro enterprisers such as growing vegetables or fruits in the backyard, selling home cooked foods, or selling a knitted work. The list could go on under the condition that the health of low income seniors does not deteriorate.

I believe that by permitting housing microfinance to low income seniors not only in developing world, but also in developed world, seniors’ desires to be financially independent and to remain in the active work force could be respected in a meaning way.