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Latino Daily News

Sunday October 21, 2012

Ecuador Receives $100M Credit to Improve Housing in Poor Communities

A $100 million credit from the Inter-American Development Bank (IDB) will help more than 16,000 poor households build better and more secure houses in Ecuador.

The program, which was approved by the Board of Executive Directors of the IDB, will prioritize households of the lower two income quintiles, with a preference for those headed by women with three or more children, or with a handicapped person.

Over the past 15 years, the system set up to provide economic help to purchase a home for poor income households – known as the System of Incentives for a Home (SIV, according to its Spanish acronym) – helped bring down the housing deficit from 64 percent of the households to 45 percent today.

Nonetheless, among the poorest the housing deficit still impacts two out of every three households in the country. These Ecuadoreans struggle to save enough to purchase a home or to access a mortgage loan. The problem is especially difficult in rural areas and in households headed by a woman who has to care for many children or a handicapped person.

The idea is for the SIV to help beneficiary buy a better home with a $6,000 in direct economic support. The beneficiaries will need to contribute $300 in savings.

Around 80 percent of the resources will be earmarked for rural areas. The program will be carried out by the Ministry for Urban and Housing Development (MIDUVI, for its Spanish acronym).

The IDB loan will have a 25-year amortization and an interest rate based on LIBOR.