This is an extension of the Itahari/Biratnagar Home Upgrading project, utilising repayments from existing clients to expand the loan offering to Kathmandu Valley.
Sewa has successfully worked with a local bank to finance this project through a bank guarantee initiative. As low-income individuals are often perceived as a financial risk, by Sewa providing a guarantee to the bank, confidence is therefore placed in the individual to repay the loan. This demonstrates a positive example to other banks of the ability of individuals on low incomes to successfully repay loans. Significant achievements have already been seen in this; previous Reall-funded projects of this type have tended to require a guarantee of 50% from the partner, but Sewa were able to negotiate a 20% guarantee.
Approximately 70% of the families use the funds to construct a new home, fully serviced with household sanitation, water and electricity. The remaining 30% will finance the extension or upgrading of their existing homes. All clients had their previous homes badly damaged or destroyed by the 2015 earthquakes.
|Description||Type||Number Expected||Number Completed||Monthly Cost |
|Loan Length (months)|
|Loan guarantee projects where Sewa provide a 20% guarantee to bank to provide a NPR 400,000 loan for construction. The rest of the cost is covered by the individual.||Self Build||100||18||6744||84|
|Finance Description||Finance Source||Interest Rate (%)|
|Loan guarantee projects where Sewa provide a 20% guarantee to bank to provide a NPR 400,000 loan for construction. The rest of the cost is covered by the individual.||Laxmi Bank||11.0|
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Data last updated on 10/03/2021