micro Home Solutions: Safe & affordable home upgrading in low income urban India
This entry has been selected as a finalist in the
Sustainable Urban Housing: Collaborating for Liveable and Inclusive Cities competition.
A large segment of poor households in urban India live in unsafe and precarious structures, even in government facilitated legal settlements. micro Home Solutions conceptualized and launched Design Home Solutions (DHS), a service that combines customized technical design assistance with affordable finance for low-income households interested in home improvements. We partner with financial institutions to offer home improvement loan products that are bundled with access to professional technical design. At the community level, we partner with local NGOs to bring awareness & skill building on safe-construction practices. The services provided by DHS allow families to invest in building safe, well-ventilated & healthier spaces, and often provide added income from rental.
About You
About You
First Name
Rakhi
Last Name
Mehra
About Your Organization
Organization Name
micro Home Solutions
Organization Website
Organization Phone
011 41435165
Organization Address
C 35 Pamposh Enclave, New Delhi
Organization Country
India
Country where this project is creating social impact
India, DL
Is your organization a
For‐profit
How long has your organization been operating?
1‐5 years
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Innovation
Entry Form title
micro Home Solutions: Safe & affordable home upgrading in low income urban India
Describe your project
A large segment of poor households in urban India live in unsafe and precarious structures, even in government facilitated legal settlements. micro Home Solutions conceptualized and launched Design Home Solutions (DHS), a service that combines customized technical design assistance with affordable finance for low-income households interested in home improvements. We partner with financial institutions to offer home improvement loan products that are bundled with access to professional technical design. At the community level, we partner with local NGOs to bring awareness & skill building on safe-construction practices. The services provided by DHS allow families to invest in building safe, well-ventilated & healthier spaces, and often provide added income from rental.
What stage is your project in?
Operating for 1‐5 years
What makes your project unique as it relates to the theme of this competition?
In urban India, a new model of democratic decentralization is being favored, where housing & city level infrastructure is to be provided by local municipalities. In practice, mismatches between financial support, housing development & provision of basic services exist in almost all the government promoted low-income settlement, translating into a visible gap between the vision and successful implementation. Households are given a tiny piece of land (as small as 12.5sqm) with no access to finance for construction & technical know-how. This results in usurious rates of interest for finance and highly unsafe multi storey structures. At mHS, we're developing a portfolio of housing options ranging from homeless shelters, rentals, upgrades to home-ownership and provide the necessary technical, management and financial framework.
Our main pilot, Design Home Solutions, is representative of this vision. Operating in resettlement colonies where the land title is legal, we influence self-construction practices, with a sustainable model that can be replicated. In Delhi alone there is potential for 1 millon new units!
By partnering with formal & informal governing and finance agencies to reinvent a planning framework that is no longer wrought with barriers & controls for low-income areas, bringing in principles of mixed-use and mixed-income habitats. By influencing the urban poor to make efficient, sustainable improvements in their living environment, DHS not only benefits our clients, but also serves as a case of how such areas can respond to urban housing shortage of 24 mn units!
Share the story of the founder and what inspired the founder to start this project
mHS was created in 2009 by Rakhi Mehra and Marco Ferrario. Despite the buzz around urban housing in India, Rakhi and Marco were struck by how there were no debate or discussions about sustainable design and no focus on community engagement. Disciplines were not talking to each other. In order to build truly inclusive cities, they recognized the need to emphasize the interdisciplinary nature of the challenge. Thus, mHS was born as a social enterprise that interlinks community, affordability and design to offer a portfolio of housing solutions for the urban poor.
Social Impact
This Entry is about (Issues)
Who or what (i.e. youth, women, environment, etc.) benefits from your project, and why is your project critical?
With an urban housing deficit of roughly 30M, the poor are constructing vertically to meet the growing need for shelter. In such locations, we witnessed a negative correlation between the number of floors and quality of life. Increased density and overcrowding lead to rapid spread of diseases and unsustainable burdens on shared infrastructure. Despite the desire to invest in upgrading their living situation, the residents of these areas often lack access to affordable home loans (forcing them to go to informal money lending sources at rates as high as 10% per month) or technical inputs to ensure structural safety. The result is a circle of debt that causes many to lose possession of the house to the moneylender and unsafe building practices that result in precarious and unhealthy homes.
Please describe how your project has been successful and how that success is measured.
Over the last 6 months, we conducted the DHS pilot in partnership with BASIX, one of the largest microfinance institutions in India. BASIX provides the loan to the client, which includes a small percentage fee for customized technical and design assistance delivered by the architect & engineer partners. We successfully facilitated the financial institution to accept possession documents for home improvement loans up to USD 7,000 (Rs 300,000) and worked closely with them to design the financial product. This loan amount and loan tenure was previously unheard of in the MFI sector in India.
During the pilot phase, we constructed 19 homes that house approximately 250 people. BASIX sanctioned USD 70,000 in loans for these clients.
The DHS pilot is proving the viability and value-add of a product that combines affordable home improvement finance with architectural assistance. The need for home-improvement finance is huge & highly divers- ranging from Rs 50,000 for basic repairs/additions to Rs 4,00,000 for a 3-storey structure. In our current project, the average loan size has been Rs 2,50,000 (USD 5500) for a 2-storey home that will house 2 families and an average of 10-15 people.
We are confident that there is an opportunity to work with a variety of financial partners such as BASIX to provide affordable home improvement loans alongside customized technical and design assistance from DHS. The demand and need for such a bundled product extends far beyond Delhi, and we believe there is significant scope throughout urban India.
How many people have been impacted by your project?
101 - 1,000
How many people could be impacted by your project in the next three years?
More than 10,000
What barriers might hinder the success of your project and how do you plan to overcome them?
a) Mason's skills. Mitigation: Turn the mason into our ally! We developed mason-training workshops and are planing to partner with vocational training institutes to create a comprehensive training program to educate local builders on safer construction techniques. We will encourage our clients to work with masons from our prefered list.
b) Adoption of technical assistance: Households are resistant to new design, due to space and short-term cost trade-offs. We are increasing our knowledge of the cost and quantity of materials to be able to point out cost discrepancies to clients and be better equipped to defend costs to masons and contractors who may overstate them. In addition, we hold awareness workshops on basic structural safety for clients and masons to educate about the value.
How will your project evolve over the next three years?
The concept has the potential to reach over 1 million low-income households in Delhi alone that require affordable finance and technical assistance to upgrade their homes and improve their living conditions. Our aim is to incubate a technical services company dedicated to undertaking R&D and building the necessary social infrastructure to scale the program aross 6 new locations, in 3 different cities, reaching 1800 households or 27,000 people by 2014.
Sustainability
For each selection, please explain the financial and non-financial support from each
a) The Michael and Susan Dell Foundation(MSDF) is providing mHS with partial support for our DHS pilot phase. This will enable us to conduct a comprehensive action-research study of the home improvement market amongst the urban poor in 3 locations of Delhi.
b) The end customers pays a technical assistance fee that is bundled in with the home-improvement loan. The fee is a small percentage (~3.5%) of the overall loan amount and is affordable for the client. Even though the fee for each individual customer is not very large, the financial model is quite attractive because DHS is a zero capital-intensive business. Therefore, once the business is at a steady state (i.e. the R&D phase is over and technical and design solutions relatively standardized), breakeven happens quickly due entirely to the fee for service from the clients.
c) Our financing partner provided a strategic partnership fee during the pilot phase.
d) Yale School of Management team assisted is in designing the scale-up plans for the DHS service and understand our cost & operation structure. Their work helped demonstrate that DHS has an attractive financial model with a clear path to sustainability and increased our understanding our major cost-drivers.
e) NGO partnership with Baliga Trust for community mobilization
f) Joint study with SEWA Mahila Housing Trust on housing titles and finance issues for public policy & advocacy.
How do you plan to grow and/or diversify your base of support in the next three years?
DHS has the large scale impact opportunity and potential to enter a new location with minimal role of government agencies. Our aim over the next year is to continue to experiment in couple of different locations next year reaching 1500 people, before partnering with more financial and technical partners to scale-up & become a viable entity in 4-5 years based on partnership and customer revenue support. We also see immense scope in policy advocacy by trying to influence the future growth of similar resettlement colonies by encouraging coordination with municipalities in provision of basic services such as sewage, water etc. Our ongoing market research study in these areas will enable us to devise new products to extend our financing partnerships to make housing finance more affordable. We continue to seek R&D funding for the architectural & urban design and urban governance structures that can make these locations more inclusive and diverse- thus economically and environmentally sustainable.
Collaboration
Please select your areas of intervention in the home improvement market
Financing, Design, Technology, Technical assistance, Property rights, Sanitation, Water, Energy conservation, Renewable energy, Environment, Urban development, Citizen/community participation, Public policy.
Is your innovation addressing barriers in the home improvement/progressive housing market? If so, please describe in detail your mechanisms of intervention
Our innovation directly addresses the most significant barriers to high quality, safe, and affordable home improvement for the urban poor. Low-income households resettled by government after slum evictions are given tiny empty plots of land on the outskirts of the city with unclear titles. Over time, these government development resettlement colonies are haphazardly built into dense low income ghettos.
Unable to produce mortgage documents, the residents of resettlement communities lack access to basic home loans or technical inputs. Households are only able to finance construction through informal money lending sources due to a lack of traditional mortgage documents- at rates as high as 10% per month. The result is a circle of debt that causes many to lose possession of the house to the moneylender, and forces low-income families to build unsafe structures with poor living conditions. Additionally, these families rarely have access to professional technical assistance that allows them to build sound structures that are healthier, longer-lasting, and better designed.
DHS makes currently available housing documentation (i.e. “possession slips”) acceptable for bankable loans and provides the poor with professional input that middle and high-income households take for granted. This allows people to invest in home improvements and construct safer structures, bathrooms, roofs, kitchens & ventilated spaces.
In addition to partnering with MFIs and local NGOs to provide this product, mHS dialogues with policymakers on overall slum rehabilitation policy. We are advocating for security of shelter/tenure over providing home-ownership and for the support of a wider range of shelter options such as rental housing, lease-purchase, and homeless shelters at affordable user-fee rates. Therefore, the potential impact of our new framework on urban housing extends beyond our direct DHS clients to influence large-scale strategies in order to build more inclusive cities.
Are you currently collaborating with private companies, or have you partnered with private companies in the past? With which companies?
Yes. Thus far we have worked with financing institutions, with cement companies and seimisic engineering firms. Our aim is to influence self-construction practices and further collaborate with material suppliers once we have a better understanding of the supply-chain.
Please describe in detail the nature of the partnership(s)
The partnership are on technical, implementation, architectural R&D and financing. For our pilot, we collaborated with the microfinance entity (BASIX) for provision of finance and working with their sales team for implementation and attracting clients. We held a joint workshop on training of masons to upgrade their skill-sets with ACC Cement and intend to reach out to other cement and material suppliers for R&D and quality materials & preferred rates. In addition, we're partnering with highly specialized engineering firms to provide seismic advice on our R&D for upgradation in the highly earthquake prone zone of Delhi.
Select the unit(s) with which the partnership was formed
Foundation of the company, Corporate social responsibility department, Sales department, R&D department.
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 | 115 weeks ago Rakhi Mehra said: Thanks Swapna! If I understand your question correctly, you're talking about about our internal team capacity and approaches to hiring ... about this Competition Entry. - read more > |
| 115 weeks ago Swapna Mishra said: Hi Rakhi, Good work being done with a very high focus indeed. I wish all the best to the team. I was keen on knowing more on the ... about this Competition Entry. - read more > |
| 117 weeks ago micro Home Solutions: Safe & affordable home upgrading in low income urban India has been chosen as a finalist in Sustainable Urban Housing: Collaborating for Liveable and Inclusive Cities. |
| 122 weeks ago Rakhi Mehra said: Hi Stet, we're working in housing-units that enclosed by other units on 3 sides and can build upto 3.5 floors. Better ventilation can be ... about this Competition Entry. - read more > |
| 122 weeks ago Rakhi Mehra updated this Competition Entry. |
| 123 weeks ago Rakhi Mehra updated this Competition Entry. |
| 123 weeks ago Stet Sanborn said: It would be great to hear more about what improvement services you provide related to ventilation, heating/cooling upgrades, electrical ... about this Competition Entry. - read more > |
| 123 weeks ago Rakhi Mehra updated this Competition Entry. |
| 123 weeks ago Rakhi Mehra submitted this idea. |
