Discussion about entry: Incremental housing development providing affordable housing for low-income groups.

The basic strength of our revenue model is affordability and ease of entry. Our scheme targets low-income families (through a filtering process known as reception area) earning around Rs. 8000 (US $ 90) a month. Saiban's model ensures that a piece of land with legal title is provided to them at prices they can easily pay and raise construction themselves with their own resources.

Suppose the total cost of a 80 sq. yard plot comes to Rs. 80, 000. This includes four things: a) cost of land, b) cost of outer development i.e. access road, a water source, sewage disposal and electricity, c) cost of internal development which includes internal roads, indoor water/ sewage connection and electricity, and d) cost of administration. Because of their low-paying capacity, most families cannot pay it in two or four installments.

In order to make it affordable, we sell 80 sq. yard plots with a small down payment of Rs. 20, 000, which covers cost of land and basic development, and is equal to two months' income for target families. The remaining amount of Rs. 60, 000 is recovered in easy monthly installments of Rs. 500 (US $ 6), which are staggered over a period of 8-10 years. This money is used to incrementally develop the remaining infrastructure. This allows residents to have a secure plot and physical services at an affordable price.

Commercial plots are later on disposed off at market price which brings additional revenue. The whole idea is based on the notion that the low-income people have the capacity and willingness to pay, provided that they get something in return.

Difficulties in acquiring appropriate land at affordable prices is the main barrier for our social business model to thrive. Private land closer to the city centre is very expensive, whereas estate land is neither not available or is difficult to acquire because of cumbersome procedures and inefficiency.

Regards,

Tasneem.