Page 39 - Demo Faces

“ADB aims to break this vicious cycle of di culties for MFIs and their borrowers, a vast majority of whom are women. It’s not just a matter of providing nancing. The people in these vulnerable settlements need to design, budget, source materials and step- by-step plan their home-improvement construction work. We’re working with MFIs and with a technical partner, to help reach out to these micro-borrowers and help deliver a more climate- change-impact-resilient housing solution. To bring continuity and re-deploy the funds, we are also creating a catalytic fund. This is one of the innovations in the project, as we try to expand the coverage and scale incrementally.”
Taneja Anshukant
Principal Investment Specialist for Private Sector Operations
Climate change and natural disasters disproportionately a ect the poor, and when they try to rebuild, and strengthen their dwellings in the aftermath, the urban poor have limited options for nancing construction of disaster-resilient housing. The micro nance institutions (MFIs) that typically lend to the poor living in these settlements are unable to secure bank loans they need to o er the longer-term nancing that is necessary for an investment as big as strengthening or reinforcing a house. Moreover, these MFIs also lack the capacity to help their customers with the technical input they need to build better and stronger homes.
Use ADB’ technical assistance (TA) funding, to provide a rst-loss guarantee on longer-term loans that commercial banks will extend to selected MFIs. They can then on-lend to their customers for nancing home improvements, and water and sanitation projects. A part of the TA is also used to extend the training, capacity-building and execution capabilities of the MFIs, so that they can scale up their resources and be better placed to o er home construction loans and build resilience at the community-level.
Phase 1 of the project covers the Philippines, Myanmar, and Bangladesh, then phase 2 will cover Nepal and Pakistan.
Find out more: Regional: Building Community Resilience through Micro nance in Lagging Peri-Urban Settlements
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