IFC, a member of the World Bank Group, supported the home improvements through a 10-year-long partnership with Kyrgyz microfinance organizations. IFC helped the institutions develop an innovative lending product that combined a traditional micro-housing loan with construction-related support, including do-it-yourself home improvement videos, cost estimates for select home improvements, and discounts for quality construction materials.
The initiative, called the Housing Microfinance Project in the Kyrgyz Republic, helped channel $44.1 million of private funds to 41,505 families, allowing them to construct new homes or renovate existing ones. An additional $15.7 million was channeled to 15,434 families, helping them improve the energy efficiency of their houses, saving them a combined $7.5 million in heating costs. Those 57,000 households were home to 192,000 people.
The project was implemented in partnership with the Swiss Government.
“Improvement of the population’s well-being is what the Swiss development program aspires to achieve in the Kyrgyz Republic,” said Dr. Olivier Bangerter, Swiss Ambassador to the Kyrgyz Republic. “The housing microfinance project directly contributed to this aim as it reached low-income earners and helped them to fulfil their need of housing.”
Many low-income households struggle to secure loans in the Kyrgyz Republic, where banks are often hesitant to lend to people without substantial collateral. World Bank Group data shows that just 18 percent of people in the Kyrgyz Republic have access to credit while only a handful of lenders provide home improvement loans.
“Housing projects like this can deliver multiple benefits, such as encouraging home ownership, lifting consumption and investment, and, ultimately, helping drive economic growth and development,” said Cassandra Colbert, IFC's Senior Manager for Central Asia. “IFC’s collaboration with local financial institutions to promote housing micro-loans helped thousands of families build new homes or renovate existing ones while also bringing them security and a sense of ownership.”
The initiative is part of a broader IFC efforts to support private sector development in the Kyrgyz Republic and improve access to finance for low-income people.
