07 November 2009

Small Housing Microfinance Loans: Week 20: 2nd - 6th November 2009



SMALLER LOAN AMOUNTS
This week the credit committee approved 17 new loans on Friday. The number of approved loans is still slightly below what we had hoped by week 20 of operations. We had hoped to reach over 150 loans with next week's disbursements, but we will not reach that many until the end of the month. One contributing factor was that the credit officer for Mbagala Kuu was on leave and therefore was not preparing files for submission and approval. Mbagala Kuu is the ward with the highest damand within our operating area, particularly the area of Mtoni Kijichi. It is an established settlement and tends to have people of slightly higher incomes than the other parts of the operating area. As a result, the loans from Mtoni Kijichi are often for the maximum loan amount and for activities such as connecting electricity or cosmetic activities such as putting in ceilings. Without clients from Mbagala Kuu appearing at this week's credit committee meeting, the average loan amount approved was much lower; an average of $594. Only two of the clients had loans for the maximum amount of 1,500,000 shillings.

We are extremely happy with some of the types of loans approved this week. There are several loans for people who are extending their homes to add extra rooms. These are cases in which people built a larger house, but were only abel to roof and occupy part of it.


MAKAZI BORA loan will make the entire house habitable

There were also several cases of people replacing old roofing sheets with new ones. In order to move into a house, it is not uncommon for people to utilize used roofing sheets to make the work more affordable. These are naturally more prone to leakage and several clients approved this are replacing old roofs with new ones.


A loan for re-roofing will stop leaks

One client who is re-roofing and adding and extra room to his house raises chickens. He originally roofed with a flat roof made with used corrugatd metal sheets, but has since built up gables to make a new and better roof. He has a chicken business about 320 chickens at the moment and he raises them in one room of his small house. This poses both a health threat to the family and he also says that the room is too small for that number of chickens, so he can't expand his business. He says that when he re-roofs we will use the old roof to build a chicken coop outside of the house. He will simultaneously gain extra living space, have a healthier living enviornment and be able to increase his business. This is the kind of housing microfinance that we are proud to offer, as it is clearly making a tangible different in the household's living conditions.

Last month another client applied to extend her house. We now have a policy that we don't give loans for constructing walls. We expect walls to be built before applying for the loan. This shows the commitment of the client to the home improvement project and prevents delays in completing the work after receiving a loan. (Block making and wall construction are some of the slowest aspects of construction.) The client had a foundation and some blocks, but was denied a loan because we required the walls to be built. She said she would come back to us  later and on Friday we reviewed her renewed application and approved it. She had built up the walls and is taking the loan for the roof, doors, windows and floor.


1st Loan Application - Rejected


2nd Loan Application - Approved
(The far left end of the extension was there previously and is an occupied part of the house.)

MAKANGARAWE EXPANSION
During the week promotional activities took place in the ward of Makangarawe. We have just expanded into Makangarawe, which is adjacent to Mbagala Ward. We hope that this will allow us to increase the number of loans approved per month by adding new potential clients. Because our MAKAZI BORA home improvement  loans a relatively small and the costs of assessing construction projects informally earned incomes is costly, a high volume of loans is needed to be sustainable.

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