By Henriette Kolb et al, published by the International Finance Corporation (IFC), November 2019, 68 pages, available at https://www.ifc.org/wps/wcm/connect/industry_ext_content/ifc_external_corporate_site/financial+institutions/resources/her+home+-+housing+finance+for+women
The authors of this paper analysed the housing finance markets in Colombia, India and Kenya, identifying barriers that women face in accessing loans for purchases, construction and improvements of housing. The authors observed that the rate of female-headed households is 26 percent in Colombia, nine percent in India and 25 percent in Kenya.
Among women polled, a range of 20 percent (in India) to 65 percent (in Kenya) “are planning to purchase a home or make home improvements in the next five years.” To fund these expenditures, they plan to use personal savings primarily, with formal loans as a secondary source. The barriers to women accessing formal housing loans include: (1) lack of required income and documentation thereof; (2) lack of documents proving ownership of collateral; (3) lack of experience with formal borrowing; and (4) cultural, traditional and socioeconomic norms. The authors argue that by increasing access to housing finance for women, financial institutions can tap into a new client base, achieve social impact and increase their profitability, especially as lenders often regard female customers as “better savers as well as better payers than men.”
According to Friedemann Roy, former Housing Finance Product Lead at IFC’s Financial Institutions Group, this is the first study that assesses the relationship of women and real estate ownership in emerging markets. It not only outlines the barriers to increased access to homeownership and mortgage credit, but it also estimates the market size of gender-specific mortgage loans in Kenya, Colombia and India as well as proposes policies and financial products that address women’s needs in particular.
Sources and Additional Resources
IFC homepage
https://www.ifc.org/wps/wcm/connect/corp_ext_content/ifc_external_corporate_site/home
More on delivering financial services to women
https://www.microcapital.org/category/women/
More on financing low-income housing
https://www.microcapital.org/category/housing/
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