We can learn something about a settlement in Africa just by what housing-related items or materials are being sold in or near it. In a place where there is very little cash investment in housing, (which still characterizes much of rural Africa), it may be hard to find any business supplying construction materials. In new settlements (or those showing rapid transformation from traditional construction methods), it is common to find a proliferation of businesses selling blocks, cement and roofing material. Settlements that are more established often have less cement, roofing sheets and blocks on the market, but more electrical supply, plumbing and paints. In settlements that are even more established, businesses sell a lot of Stuff.
In How Buildings Learn: What happens after they’re built, Stewart Brand implicitly considered Stuff as part of the housing process. Stuff is his term for the usually movable things such as furniture or appliances, that go into a house. N. J. Habraken also used Stuff as one of the basic elements in determining supportive housing design in Variations: The Systemic Design of Supports. Without a doubt, beds, sofas, tables and chairs, refrigerators, stoves, toasters, televisions, stereos and other household items are a critical part of one’s housing. Does stuff, however, have a place in housing microfinance?
Stuff is often sold with consumer credit by its vendors. I once visited a housing program in South Africa where clients prioritized payment for their sofas over their house payments. At first I found it strange that stuff had priority over shelter. It was, however, a logical response given that the local housing environment made it very difficult to foreclose on a housing loan, whereas providers of consumer credit would quickly to arrive and collect their sofas, chairs or other items if their customer fell into arrears. People valued their stuff and there is no reason why housing microfinance could not extend to “stuff” as well. No home is complete without it!
Even if stuff is not part of an institution’s housing microfinance product offering, it still often has a critical role in housing microfinance. One of the differences between housing microfinance and mortgage finance is that housing microfinance usually does not secure land or the house as collateral. Stuff (chattel) often serves as at least partial security on housing microfinance loans. Sofas, televisions, tables and chairs and even beds can be pledged as collateral. They are usually much easier for the lender to seize and sell in case of default in loan payments than an attempted foreclosure and sale of property, particularly in places where even mortgage law is not fully developed in a practical sense.
An interesting thing about stuff is that it is a rough proxy for the socio-economic status of its owner. In the MAKAZI BORA program (the housing microfinance program with which I currently work) we take photographs of stuff that is pledged as collateral. A look through a client’s collateral photos can give a quick indication as to whether the per capita household income is closer to $1.00 per day or $5.00 per day just by the types of items used. Not all radios, sofas and cupboards are alike, and by the second month of implementation we had determined that a section of our operating area had a lot more people of higher income simply by the collateral they were pledging compared to that of other areas. That particular section was the only one in the area where clients consistently had what were listed as “sub-woofers” (music/entertainment systems) on their collateral pledge forms, whereas much older and simpler radios were the rule in other sections of the operating area. One rule of the credit committee is not to make comments or judgments about people’s stuff when reviewing applications. Regardless of its condition, age or value, it is theirs and it represents part of the assets of the people we serve.
Housing microfinance is a housing intervention. Starting with site and ending with stuff, each of Stewart Brand’s Six S’s of a building [1] is a potential loan use for housing microfinance products or otherwise influences the practice of housing microfinance. Housing microfinance products that fit in with the housing realities of their intended users will be the most successful, both commercially and in terms of having a significant effect on the people’s housing process and the overall housing environment. This marks the end of my series on the "6 S's." Additional topics will be forthcoming shortly.
It would be interesting to study in each community which of the 6 "S"'s the community prioritises. I dont think it is a given that priorities move from the outside in (reference Brand's diagram). I wonder if the mix of products an MFI offers should reflect an intentional portfolio of the "S"'s (can you really just focus on one...people will undoubtedly find creative ways to use their loans on the S most important to them.
ReplyDeleteI definitely agree that people use their loans on the S that is most important to them. A flexible product (or perhaps a range of products) allows people to do so. A more restrictive product may ultimately decrease people's freedom to build and the ability to access affordable housing finance that aligns with their housing priorities.
ReplyDeleteIt would indeed be interesting to do a comparative study of the 6 S's across communities. Anecdotally, we currently see differences between some of the communities with which we work. The differences seem to be related to the age of the settlement (more time = people further along in their housing process) and prevailing income levels. Perhaps some day someone will do a more empircal study of it.
Thanks for the great comments.