Mexico’s FOMEPADE project provides public sector workers with a “core house” solution that links several strategic partners into a unique value chain, representing an effective model in the incremental building process. Established in 2006 as a non-bank financial institution (NFBI), FOMEPADE aimed to provide long-term, unsecured housing loan’s for the region’s low-income majority. The intended beneficiaries of this project are state and municipal employees who historically have not qualified for mortgages, leaving them to incrementally build their homes with savings and consumer credit.
By linking social housing developers, public sector employees, and government subsidy programs, FOMEPADE had disbursed 825 loans by 2013. The model is reliant upon being able to align the operations of the financing and construction partners, as well as securing long-term access to government subsidies. It’s two-pronged approach, in which credit is consolidated and refinanced to help clients in paying off their debts and cleaning up payment histories, and then they are extended housing loans to assist in building a core home, or in taking on a home improvement project.
Source:
Inter-American Development Bank. (2014) Many Paths to a Home: Emerging Business Models for Latin America and the Caribbean’s Base of the Pyramid. IDB: Opportunities for the Majority.