After 5,000 families benefitted from its affordable housing scheme, LAPO Microfinance Bank seeks collaboration of other large organisations for expansion. Godwin Ehigiamusoe, CEO of LAPO, in this interview with HOPE MOSES-ASHIKE, explains more about the scheme. Excerpt:
A brief introduction of the initiative and partnership between LAPO Microfinance Bank and Lafarge on ensuring affordable housing for low-income earners
The Affordable Housing Project is implemented in partnership with Lafarge, a major cement solutions provider and the French Agency for Development. The project is designed to enable persons at the bottom end of the society to have access to decent shelter with attention to adequate sanitation. LAPO Microfinance Bank engages potential clients, carries out loan appraisal, disburses and ensures repayment with an adequate monitoring system. Lafarge, within the context of its international affordable housing initiative, provides technical support through active participation in the management of the project while the French Agency for Development provides an on-lending facility to LAPO Microfinance Bank. The project, which was piloted in Ogun, has been scaled up and now extends to Lagos, Oyo and Edo states. Implementation will begin in Cross River and Akwa Ibom states very soon.
Rating the impact of the Affordable Housing Scheme on those at the bottom of the pyramid since inception
The project has been enthusiastically embraced by Nigerians. The result is that over 5,000 families have so far benefitted from the scheme since inception. In this regards, operations are being expanded to more states and discussions are ongoing for collaboration with other large corporate entities to expand the frontiers of affordable housing. Our focus is not just helping clients complete their buildings but also ensuring adequate sanitation. The project therefore has economic, social as well as environmental impact angle.
We are also aware that houses for low-income earners are not just shelters, but are equally locations for their economic activities. We are putting in place a system that will enable impact assessment not only in terms of number of houses but with equal attention to social indicators. The success recorded so far is due to a number of factors, which include commitment of the partners in the project who have all delivered on their obligations. LAPO Microfinance Bank, particularly, brings its solid experience in low-income people engagement and micro-lending to bear on the implementation of the project; secondly, the project was preceded by proper preparations including an extensive survey; and adoption of ‘incremental approach’ to housing financing.
Plans to extend this scheme to other states in Nigeria
The pilot phase is coming to an end and we are in the process of scaling up the project. From LAPO Microfinance Bank’s perspective we seek to mainstream the Affordable Housing loans into our regular product mix. The implication is that the product will be offered in all our branches across the country.
Challenges encountered in the scheme since inception
There were the expected challenges of selling the new product considering the terrain; other challenges were training of staff, loan appraisal process for the new product. We have overcome these challenges through extensive marketing and also educating prospects on the benefits, credit staff of LAPO Microfinance Bank who have great skills in group lending approach were provided with adequate trainings to deal with individual loan appraisal and now we are set to expand nation wide.
Rating government’s support, presently towards bridging the housing deficiency gap in Nigeria
I believe there is a strong commitment to making affordable housing possible in Nigeria; a good initiative is the Mortgage Refinancing Company. One hopes that the advent of this initiative will begin to yield fruits. Efforts should be made to ensure that this has impact on low-income households.
Tackling the housing deficiency in Nigeria
Innovation and collaboration for me are key requirements. The low-income households are obviously more affected by the housing deficit in any nation. Unfortunately, the conventional mortgage practices do not take into account the peculiarities of this segment of the society. To meet their housing needs, it will require massive government involvement, innovations in building technologies and most importantly in the mortgage structuring. The approach must take into account the fact that these people are not only weak economically, but their income streams are also irregular.
