Tajikistan HMF

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Housing finance has so far been mainly available to the urban middle class, due to the high cost of property and building construction. The key change in the approach towards making housing finance also available for the poor builds upon two principles: a) renovating existing housing (rather than financing new construction), and b) breaking down house improvements into components, thereby focusing on the immediate needs, and thus bringing down the financing needs to what can be afforded. The project covers 3 components and has been designed to cover current gaps in achieving improved housing conditions of the low-income households in rural areas, complementing HMF project in Kyrgyz Republic that achieved great results. COMPONENT 1: Standardize and Develop Technical Construction Services Non-financial services are the key component of HMF product and are important to ensure sustainable promotion of this innovative product in the market. Under the project, non-financial services will be standardized and produced in the form of Technical Construction Services (TCS) tools that do not incur any costs in their usage. The services developed in Kyrgyz Republic need to be adapted to Tajikistan – language, type of buildings, available building materials, building code. COMPONENT 2: Support local financial institutions in the development of innovative HMF product. This component involves working with at least two partner financial institutions to develop and pilot the HMF loan product and improve their internal capability. Activities under this component covers adapting lending procedures and developing/conducting training modules for FI staff in basics of engineering for utilizing TCS tools and in sales techniques to provide combination of financial and non-financial services. COMPONENT 3: Awareness raising. The project will support partner FI to conduct on-site workshops to promote HMF lending innovative product to the beneficiaries. This component is closely aligned to Component 2 and will contribute to demand stimulation to HMF lending product from the potential customers.