Construction Assistance in Housing Micro Finance : A case study of Génesis Empresarial in Guatemala

Sammanfattning: The use of construction assistance is discussed upon in the micro finance sector. Many MFIs and their donors argue that MFIs should only provide financial services and that the cost of providing the service is not justified compared to its impact . But since construction assistance is a fairly new service in housing micro finance is it also so, that many of the MFIs don’t know what constructions assistance involves and what the impact is on the MFI and the end client. Therefore it is important to investigate and describe what construction assistance actually involves, what is the impact of construction assistance on the delivered service and can it be done in a financially sustainable way from the MFIs point of view? According to my investigations construction assistance raises and assures the quality of the home improvement and therefore the home itself. It also contributes to economic impact by raising the general quality of housing in the target area, but also to socio-political and personal impact by increasing the families’ asset and raising their self esteem. Construction assistance can also raise financial sustainability through the employment of cost-reducing systems such as construction and design programs. But it can also reduce the transaction costs that result from information asymmetry and moral hazard for both financial intermediaries and clients through the socio economic study and the actual time that the credit assessor spends with the client. The outreach is improved through the MFIs ability to discover and monitor the clients changing need by the help of construction assistance and it also improves the MFIs targeting mechanism through different marketing and promoting actions.