Microfinance for Housing: The Mexican Case

Journal of Microfinance / ESR Review, Vol 5, No 1

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Date Published 2003
Primary Author Michael Goldberg and Marialisa Motta
Other Authors
Country Mexico


Can Microfinance Institutions (MFIs) help address the needs of millions of low-income families in Mexico for housing improvement loans? The paper assesses whether MFIs are suited to providing housing improvement credits and evaluates whether diversified housing portfolios can improve performance and mitigate risks for these institutions. After showing that the microfinance industry is at a nascent stage in Mexico, and that the current supply of housing microfinance credits is a tiny fraction of the estimated demand for these loans, the paper provides suggestions for government and donors to serve as short-term catalysts for the expansion of MFIs in the housing field. Recommendations include support for market studies to assess the characteristics of demand and to develop attractive housing microfinance products, providing incentives to help MFIs develop new or scale up existing housing portfolios, offering innovative sources of funds for housing microfinance, and encouraging franchising and joint ventures between various institutions involved in this field.

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