Microfinance is a general term to describe financial services to low-income individuals or to those who do not have access to typical banking services. Microfinance is also the idea that low-income individuals are capable of lifting themselves out of poverty if given access to financial services.
Habitat for Humanity Australia (an Accredited NGO) is supporting vulnerable female headed households into adequate housing through the Eastern Nepal Community Development project (an ANCP funded project). It has been working with poor families, including female-headed households to support them to build houses through low cost micro-finance loans. The project has been working to develop local Microfinance Institutions (MFI) capacity to manage a housing loan program, providing technical training to enable MFIs to support construction of low cost durable housing. The MFIs' poor clients are not able to access formal financing, and these affordable housing solutions with financing enable working poor families to achieve adequate housing for their families.
Urmila is a widow, whose husband died 5 years ago, leaving her to raise two children alone. Her son is 10 years old, and her daughter is 15. They moved into their new house in November 2014. The former house was very basic and small. It had straw walls and roof and was not weather proof. Urmila took a loan several years ago to buy land, and now she has been able to build a house. She borrowed 80,000 ($1,000), contributed 10,000 of her own savings, and received some subsidy from HFH to build her new house. In return she provided voluntary labour. She plans to pay her loan off in less than 2 years. She earns her living working in the nearby jute factory, as well as from animal rearing and making rice wine.
Living in a new house with a new toilet has changed her family's life. She feels safer and more secure and is not so worried for her teenage daughter. Before they didn't have a toilet, and were defecating in the forest. Now they don't need to go out in the dark at night to go to the toilet.
In 2014-15 through the ANCP, Australian aid supported 9 NGOs to deliver 19 projects in 12 countries focusing on Microfinance.
