Housing Microfinance and the 6 S's: Skin

When describing a sort of hierarchy of the 6 S’s, Stewart Brand wrote that “Site dominates the Structure, which dominates the Skin, which dominates the Services, which dominate the Space plan, which dominates the Stuff.” [1] Skin is the layer of the building that meets the eye and covers the structure. Brand calls skin mutable. In How Buildings Learn, he demonstrates its mutability with examples of how buildings’ facades change over time. In Sub-Saharan Africa, it is common for houses to be built and occupied with very little in the way of skin, which is then progressively added. This makes the addition or modification of skin a very popular loan use for housing microfinance in Africa.

Traditional houses in Africa usually have skin. When the structure is poles, builders weave bamboo, reeds or sticks through them and apply a mud or clay skin. Plaster of one type or another is the most common skin in Africa, both on traditional and "modern" houses. It is indeed dominated by the structure, because the plaster (skin) must be of compatible material to bind to the structure. In some of my previous work in the Democratic Republic of Congo and Ghana we built low cost houses using mud bricks as structure in communities where this seemed to be the most feasible option. The structure was then plastered with a mixture of cement and the same type of soil that made the bricks. Taking initiative in their self-help, clients would sometimes increase the cement component of the plaster ratio in the belief that it would make the skin stronger. The actual result was a plaster that could no longer bind to the structure and would soon start falling off. As the skin fell, so did repayments. Despite the fact that the clients’ actions directly caused the problem, the house design, selection of materials and technology and the overall process were ours and Turner's Third Law still seemed to apply.

In other communities where the soil was too sandy for mud bricks or where burnt bricks were an option, we built burnt brick or cement block structures. In an effort to reduce construction costs and keep clients’ income directed towards their loan repayments, we had a policy that houses could not be plastered until their loans were paid off. Complaints were seemingly endless when we (the providers) considered skin to be a luxury that a resilient structure made unnecessary. This was a constant source of conflict and we were ignoring a demand for skin as a loan product and as a key part of people’s housing wants and needs. Necessity and importance are not always the same thing when housing is viewed as a personal process as opposed to a shelter or commodity.

Skin is often a secondary or tertiary priority for households in Sub-Saharan Africa, after site and structure. It is extremely common for dwellers to move into a building before there is any skin except the roof covering. This is incremental building in action: An informal finance strategy that prioritizes available funds against housing as a livelihood component. Once the house is occupied, however, housing microfinance frequently assists dwellers to continue their housing process by adding interior and exterior skin. Plaster, paint, tiles, skirting, rough exterior finishing and embellishment on verandas are very common housing microfinance loan uses with demand even from very low income households. Skin brings a sense of pride to the dweller and adds a personal touch to their home that gives housing a deeper meaning than basic shelter. There is tremendous value in this as well as demand. Skin as a loan use is undoubtedly one key to housing microfinance reaching the scale needed to be sustainable and profitable.

My approach to skin has changed drastically over the years from the days when I was trying to enforce “no plastering” policies. Should we allow a household to use a housing microfinance loan to paint their house pink when there is some other item of apparent necessity still incomplete? Why not? They are probably more aware than we as to what is complete and incomplete on their own house. They probably have a reason why they want to paint it and we, as outsiders to their home, have little idea what painting their house pink means to them. Effective demand and a supportive, personalized housing process ultimately go hand in hand.

[1] Brand, S. (1994). How Buildings Learn: What happens after they’re built. New York: Penguin, p. 17.

Housing Microfinance and the 6 S's: Structure

“Structure is the building,” states Stewart Brand in How Buildings Learn: What happens after they’re built. [1] The structure is composed of the foundation and load-bearing walls. It is situated on the site and sets the parameters for skin, space and services. When low cost house construction is undertaken by the dwellers themselves, how structure is built depends upon what materials and skills are both readily available and affordable as well as cultural factors. Even a cursory survey of a settlement can determine what is readily available, affordable and acceptable to low incomes households simply by observing the materials in most frequent use in the structures and what is being sold where people with low incomes are building. How structure is most commonly built in a given locality and the lending institution’s position on it affects housing microfinance design.

My posting in September titled a product-environment mismatch  was essentially about structure. The prevailing structures in northern Malawi where a housing microfinance product was implemented were mud walls or waddle and daub (mud and pole) with no foundation, but the product required a burnt brick structure with a 60 cm foundation. This made for a slow and expensive start-up, because the effective demand was low based on the low number of households with eligible structures (which was much lower than the number of households in need of improved housing or interested in a home improvement loan). In such cases a decision must be made whether to design the product to work with houses having the prevailing type of structure, to require potential clients to build a different kind of structure prior to receiving a loan (as was done in the example) or to allow the loan to be used to build a structure to the desired standards. This is a decision that combines an institution’s housing ideology and its approach to lending.

The first option of working with the prevailing structures is perhaps the most market-oriented. In the northern Malawi example discussed in a product-environment mismatch, roofing was locally considered to be the biggest housing challenge and people wanted better roofs. Working with the prevailing structures might have meant allowing clients to use a home improvement loan to put a durable roof on a house with walls made of mud or mud and poles. From one housing perspective, putting better roofs on existing houses could be viewed as a significant improvement in living conditions. From another perspective, the houses may still be considered sub-standard, semi-permanent and undesirable to the lending institution. From the market perspective, effective demand for this type of product would be people who could afford a loan for a roof, wanted a better roof and desired to take a loan for roofing. Roofing sheets were locally available, so this may have captured the largest effective demand at lowest cost to both the client and the institution.

The second option of requiring potential clients to build a new structure to higher standards may also have some advantages for the lender. From a social perspective, the lender may have a role in improving the built environment by encouraging more durable building methods. When a household builds a new structure, it also shows a high level of commitment to putting resources into their housing. This can be an indicator of reduced risk for the lender. In the northern Malawi example, however, the demand (for roofing loans) moves to households who can afford a loan for a roof, want a better roof, desire to take a loan for a roof and are willing to rebuild their home using a different technology in order to be eligible. There may be a multitude of reasons that people are using the current methods of building structures. Changing this could be challenging and result in low effective demand with high costs and challenges to the lender in reaching sustainability.

The third option of supporting the structure with the loan could be in the form of cash disbursements for the purpose of building a foundation and walls or the institution actually overseeing the construction. This could result in quality structures, although in practice it is easier to assess the quality of an existing structure than to ensure the quality of a proposed one. The challenge of cash disbursements for structure is that it is difficult to gauge the household’s commitment to their housing process when looking at an empty space on a plot of land. There is a higher risk of loan diversion than when working with a household that has already put their own resources into a structure. When the institution oversees the construction, delivery becomes more expensive and complicated for the lender. It is a possible option, but it is perhaps the most challenging of the three from a lending perspective.

In my current work in Dar es Salaam, Tanzania, we have decided not to support structure with our loan and only work with pre-existing structures. Because of the sandy soil in the city, the prevailing material used for building structures is cement blocks. The advantage to this is that the material used is resistant to rain and can be collected on site and structures stand unroofed for long periods of time. When matched with a difficulty in financing roofing, this results in a market for roofing loans on existing structures. The quality of the structure can be viewed prior to approving a loan for its improvement. A household that has brought a structure to roofing level has both invested significant resources that show some level of commitment and it has learned a lot about building their own home as they have sourced materials and worked with builders. At least that is both our espoused theory and theory in use so far.

As Brand said, structure is the building. Lending institutions make decisions, at least implicitly, on their approach to structure through their housing microfinance product design. An understanding of the types of structures built locally, why they are built that way and what are the possible product design alternatives and their implications should be a prominent feature in housing microfinance product development.

[1] Brand, S. (1994) How Buildings Learn: What happens after they’re built. NY: Penguin. p. 13.