Edyvivienda program to benefit 20,000 families at Base of the Pyramid over five years
The Inter-American Development Bank (IDB) approved a loan of $20 million to Edyficar, a Peruvian financial institution specialized in the microenterprise segment. The loan will allow Edyficar to expand and improve its program Edyvivienda, which provides access to finance for incremental housing construction for low-income individuals and their families, especially microentrepreneurs. The financing from the Bank’s Opportunities for the Majority Sector will help address Peru’s housing shortage, currently estimated at 72 percent, one of the largest gaps in the region.
“The loan from the Opportunities for the Majority Sector will enable Edyficar to scale up an innovative business model that brings the interests of a financial institution in line with those of other key actors in the incremental construction sector,” said IDB project team leader Manuel Fernandini. “Over 80 percent of the end beneficiaries earn less than $200 per month, and 42 percent of the heads of households served by the program are women.”
Resources for incremental housing improvements will alleviate deficiencies in quality and overcrowding and will improve access to basic services such as water sewage and electricity for 20,000 households. Faced with the inability to obtain financing, low-income families in Peru typically undertake home improvement projects lacking professional training in construction techniques, leading to costs up to 30 percent higher than necessary and taking an average of 15 to 18 years to complete. State-led financing programs aimed at reducing these gaps require a mortgage security, which makes access impossible for the roughly 50 percent of the property-owners at the base of the pyramid whose dwellings are untitled.
About Opportunities for the Majority
The IDB’s Opportunities for the Majority initiative promotes and finances market-based, sustainable business models that bring together companies, local governments, and communities in developing and supplying quality products and services to people at the base of the socio-economic pyramid in Latin America and the Caribbean.
Edyficar was established by CARE Peru in 1997 with the mission of providing access and financial services to low-income individuals, especially microenterprise and small business owners. In 2009 it was acquired by Banco de Crédito del Perú (BCP), the country’s largest financial institution. It has nationwide coverage, with a presence in 21 of Peru’s 24 departments.