PRESS RELEASE: Lafarge launches ‘Housing Microfinance Academy’ in India

Wednesday, May 20, 2015

Lafarge, a world leader in building materials, launched the Indian chapter of ‘Housing Microfinance Academy’ in Mumbai earlier this week. Introduced in 2014, it will enhance availability of housing credits for the low-to-middle income segment and promote the exchange of information about potential product design, provide funding support and construction designs.

A McKinsey report on the global affordable housing challenge estimates that 330 million urban households around the world live in substandard housing or are struggling financially due to housing costs. Some 200 million households in the developing world live in slums; while more than 60 million households in the United States, the European Union, Japan, and Australia, are financially stretched by housing costs. Based on current trends in urban migration and income growth, the report estimates that by 2025, about 440 million urban families around the world – at least 1.6 billion people – would occupy crowded, inadequate, and unsafe housing, or will be financially stretched. Lafarge’s ambition is to support the urban metamorphosis by participating in the construction of towns and cities that offer decent and affordable housing for all by offering products and solutions. Helping build towns and cities that are more compact, more durable, more beautiful and better connected.

The ‘Housing Microfinance Academy’ initiative was launched in partnership with International Finance Corporation (IFC), a member of the World Bank Group, and the largest global development institution focused exclusively on the private sector. As part of this association, Lafarge and IFC are organizing workshop sessions of the Housing Microfinance Academy across the globe; which started with Kenya last year. There are plans to have these academies in more countries in the coming months. François Perrot, Director Affordable Housing, Lafarge, and Friedemann Roy, Global Product Lead Housing Finance-IFC inaugurated the Housing Microfinance Academy in Mumbai.

Speaking on the occasion, François Perrot, Director Affordable Housing, Lafarge, stated, “Microfinance has to be regarded as a business in order to be sustainable; while also creating a positive social impact. Lafarge’s Housing Microfinance model is tailored to local conditions and has been successfully implemented to date in more than 10 countries. As an involved actor, Lafarge plays two critical roles; namely, providing construction technical assistance to the low-income borrowers and connecting them to our network of reliable building materials retailers. Lafarge’s technical support and network with material supplying retailers help reduce the risk for microfinance organizations.”

While welcoming the delegates, Frederic Guimbal, Product Line General Manager – Ready-mix Concrete, Lafarge India Private Limited, shared, “Lafarge has developed affordable housing projects in eighteen countries across the world, and India is one of leading countries where we offer innovative affordable housing solutions. We are also pioneers in creating partnerships with banks and microfinance institutions to facilitate small loans for meeting housing requirements. This session is about sharing best practices from India and across the world to successfully scale up housing microfinance in India.”

The inauguration was followed by a workshop on how players in microfinance could increase the value for customers by diversifying existing lending activities. Attended by leading housing, mortgage and financial institutions, the day-long session covered the role and importance of microfinance for diversifying lending activities; the best practices in housing microfinance in India and abroad. Additionally, means for providing access to affordable designs and construction materials were discussed. A case study from Indonesia brought to light how a construction player like Lafarge could partner with micro-financing organizations in the housing sector and together make affordable housing accessible for the consumers; while also making it profitable for the organizations concerned.

Participants were excited to learn of this concept of creating an ecosystem, which nurtures an environment where all players stand to benefit in the long term. The workshop culminated with participants discussing the need to evolve new business models where housing finance companies, developers and construction companies could collaborate.

Source: La Farge (link opens in a new window)

Finance, Uncategorized
housing, microfinance