Why Housing Microfinance is Not a Base of the Pyramid Solution
Selvanayagam, R.

Despite recently received criticism, the international growth of microfinance can largely be deemed as an exemplary base of the pyramid business success story. On the back of the notable accomplishments achieved across the developing world, a branched out form of the finance mechanism has been increasingly proposed as a real time solution to deal with the wide and growing presence of slums, shanty towns and other forms of substandard housing. The initiative is focused on the provision of proportionately small-medium sized loans for the low income demographic to be used for incremental housing improvements as well as for the construction of very basic housing, often using locally supplied materials.

Whilst some of the advantages include community integration / cohesion; employment opportunities; the encouragement of personal financial management and seemingly improved housing conditions in comparison to what was often the case before – it is seems rarely questioned as to, in reality, whether such a strategy truly presents the answer to what one of the largest issues facing the BoP housing sector today.

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