Today, nearly one billion people live in precarious housing conditions, mostly in slums. This figure is expected to double by 2030. Due to the acceleration of brutal urbanization and the lack of affordable financing options, access to dignified and sustainable housing for vulnerable populations remains a major problem. The current financial system, based on high, very short-term returns, cannot help society overcome inequality and poverty, as well as meet the challenges of environmental change. urbaMonde and its local partners in Nicaragua and Senegal have set up revolving funds with very low redemption rates, among other things.
Communities for collective savings
In the suburban area of Dakar in Senegal, the Fédération sénégalaise des habitants (FSH), accompanied by urbaSEN, organizes the reconstruction of houses damaged or destroyed by floods. urbaSEN is a professional technical assistance structure that has been supported by urbaMonde for more than ten years. The FSH consists of over 400 communities, each with 15 to 35 members, usually women. These communities manage shared savings and can apply for loans from a local revolving fund. This is an alternative to the traditional financing system, to which the residents of Dakar's poverty-stricken neighborhoods generally have no access, or access only at prohibitively high rates.
There is a well-established procedure: Identification of needs, selection of beneficiaries, site visit, review of the local craftsman's estimate, contracting of the job, recording and monitoring of the loan and repayments through the online database. Experience shows that beneficiaries can rebuild a house with 1,000 Swiss francs repaid over a 20-month period. Within five years, more than 500 reconstructions could be realized in this way.
A revolving fund has also been set up in Nicaragua, in the department of Matagalpa. urbaMonde works there with Multipro, a cooperative of professionals that provides technical assistance to promote the development of housing cooperatives. The revolving fund established in 2016 enabled the purchase of four properties there, via loans of $20,000 to $35,000 to be repaid in three to four years. It is encouraging that by the end of 2022 all six cooperatives in the department of Matagalpa will have paid off their land.
Cooperatives in Europe
In Europe, urbaMonde accompanies the MOBA Housing Network, which brings together cooperative residents, housing professionals and alternative banks from five countries – Croatia, Hungary, Czech Republic, Slovenia and Serbia. Its goal: to support alternative, non-speculative housing initiatives, such as self-managed housing cooperatives. MOBA must address the challenge of creating viable legal and institutional frameworks and providing project sponsors with access to finance. A revolving fund was recently set up, endowed with 30,000 francs by the Allgemeine Baugenossenschaft Zürich (ABZ). ABZ distributes money from its solidarity fund to charitable projects every year with a competition.
The Verband Wohnbaugenossenschaften Schweiz is the largest association of non-profit housing developers in this country, with a total of over 152,000 apartments. For more than 50 years, it has helped nonprofit housing developers finance their construction and renovation projects and acquire land or real estate through three financial instruments: The Fonds de roulement (FdR), with the support of the federal government, makes it possible to grant loans at very low interest rates to. The Solidarity Fund, financed with donations from members, enables undercapitalized nonprofit housing developers to obtain additional loans for pilot projects worthy of support. Finally, the association relies on the issuance center for nonprofit housing developers (EGW). The latter raises capital directly on the market by issuing bonds with multi-year maturities. The capital providers subscribe bonds, which are secured by guarantees of the federal government. Financing from EGW is significantly cheaper than comparable fixed-rate mortgages of the same duration. In the Zurich region, for example, these instruments have enabled the rapid development of housing cooperatives.
Instruments of international solidarity
Looking at all these local dynamics, one thing stands out: Residents committed to housing are developing tools that, while adapted to their geographic, economic, social, and cultural context, function similarly. Unfortunately, these are proving to be insufficient to meet all current and future housing needs. So how to meet this need? How to promote dynamic resource sharing on an international scale?
CoHabitat, the international network for collaborative housing coordinated by urbaMonde, has developed an online database and fund for solidarity housing. The latter is intended to strengthen the impact of local revolving funds, but is also still insufficient. One of the challenges is to convince more people to support the fund. This is done through an active information and awareness-raising process about the initiatives of organized resident groups in Senegal and in Nicaragua, and by showing that solidarity-based citizen financing is an effective and promising lever for access to dignified and sustainable housing for all people.