Unlocking the pyramid: Social platforms for financial inclusion in low income suburbs of Greater Buenos Aires
- Citizen participation
- Community development
- Financial services and markets
- Housing
- Infrastructure
- Microfinance
- Transparency
Example: Walk us through a specific example(s) of how this solution makes a difference; include its primary activities.
Marketplace: Who else is addressing the problem outlined here? How does the proposed project differ from these approaches?
Founding Story
Alison
Smith
Fundación Pro Vivienda Social
More than 5 years
• Foundation Vidanta prize " Contributions to the Reduction of Poverty and Inequality in Latin America and the Caribbean", 2012
• Leveraging Business for Social Change Ashoka Changemakers, 2010
• Banking on Social Change: Seeking Financial Solutions, Ashoka Changemakers. 2008
• Microfinance, innovation & sustainability, Giordano dell Amore, 2009
• Development Marketplace, World Bank, 2002
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Operating for more than 5 years
We develop social platforms that connect low-income families with actors from various sectors (public sector, businesses, and banks) in order to provide access to financing and public works to improve their homes and neighborhoods.
We seek a solution to a lack of infrastructure and the housing crisis through a collective mechanism that includes everyone.
At the same time we promote connections between residents, the public sector, businesses, and commercial banks to create change over the long term in these neighborhoods.
7000 families are involved in the current initiative and 2000 more are expected to participate in the upcoming year.
Physical and other accessibility obstacles that prevent communities from reaching financial services, The lack of affordable financial products tailored to the needs of underserved and excluded communities,, Powerful incentives for financial service providers to move up-market.
The Neighborhood Trust Funds permit resources from neighbors, companies and public entities to be invested into projects that address infrastructure deficits (water, drainage, pavements, lighting and other collective services). The Gas Trust Funds show results that validate the performance of this mechanism.
It will allow banks to begin doing business with this population, to which they can offer financial services, having already carried out an experience with a reduced risk.
It will also allow neighbors to approach the banks that financed the Trust Fund and use their proven credit performance as a prerequisite to access other financial services
Yes! Our social platform is based on a formula that requires 3 simple elements: community organization, microfinancers & commercial banks & company/state involvement. With these components we believe our model is 100% replicable in other marginalised urban areas lacking in basic services.
In Argentina there are more than 5 million families with no access to infrastructure. They rely on the State action to gain access to services; public policy has failed to cater for their needs.
Urbanisation is a process impacting other emerging nations in similar ways, accessing infrastructure is therefore a universal problem.
The broader outlook of marginalized neighborhoods will have changed. These suburbs which have been built by neighbors will begin to benefit from a better quality of life; they will have paved roads, running water, drainage, guttering, street lighting and internet. These services will have been financed by the Neighbourhood Trust Fund using state, commercial and neighbour`s funding.
These projects redirect a part of neighbor’s savings which today are used to buy individual consumer goods (freezers, stoves, televisions, cell phones etc.) toward public goods and services. Quality of life will be notably enhanced and inequality will begin to diminish. Local employment will increase and local businesses will flourish.
In order for these changes to take place the relationship between companies, the State and neighbors will need to have changed. Currently there are no projects which use “mobilizing events” that involve diverse social actors to resolve the situation. Misinformation, distrust and the absence of a common objective result in neighbours constructing their own communities without credit.
Companies and the State do not invest together in poor neighborhoods. The possibility of working together to achieve common results transforms this reality dramatically. Public policies which favor this type of project are necessary. In Argentina there are examples of suitable solutions to collective problems when there is respect toward differences and willingness to work together.
We have set up 4 Neighborhood Trust Funds bringing together 10.000 families of which 4.500 already have natural gas.
We have promoted articulation between multinationals, federal, state and local governments, local suppliers, neighbors as well as with local and international banks.
Also more than $US5 million have been sourced from diverse investors (neighbor contributions, commercial credits and public subsidies)
Neighbors have increased their asset wealth by between 15% and 20% thanks to a rise in the value of their homes. On top of this households increased their incomes by an equivalent of 5% due to reduced energy costs.
Levels of distrust between all the actors involved have decreased
Via three gas Neighbourhood Trust Funds 10.000 families will be connected to the network, the same families will have the opportunity to access credits to improve their homes thereby having a positive impact on the livelihoods of 50.000 people.
200 neighbours will have been trained in our Community Education Centre. Another 100 local builders and gas installers will have been employed on the project.
40 businesses (construction companies, manufactures etc.) will enter new markets and carry out $US10 million in public works. 3
3 to 5 banks will finance the mentioned projects
Incorporate at least 2 banks to fund the United Future Neighborhoods Trust Fund and carry out 3 public tenders for the Neighbors
Adhere 1056 families, (the minimum required for the Project to be feasible) in the 6 neighbourhoods of the Neighbours in Acti
Strengthen teams of Community Developers, gas installers and Local Builders to carry out the works.
c. Carry out 800 internal gas connections and 300 home improvements
To have 3 commercial financers (banks or investment funds) backing for United Future Neighborhoods Trust Fund projected for 3.50
Consolidate alliances with local banks and investors to co-finance the United Future Neighborhoods Trust Fund
Consolidate alliances with businesses for the construction of works, internal gas installations and the supply of constructio
Train 100 Community Developers to promote and administer the Project
The Neighborhood Trust Fund model is based on the alliance between diverse actors, both public and private, who articulate together whilst carrying out a specific function.
The major task of the Foundation is to assist and connect the various actors involved in the Projects. Our strategic objective is to facilitate and enhance the interaction between the interlocutors, the idea being that they will begin to articulate with higher levels of fluency and eventually do so independently.
Yes, we are working in 2 areas now and in 2013 will start working in a third area in Greater Buenos Aires.
1- That the people who work with the residents are individuals employed by the foundation. This structure would create committed personnel who can communicate knowledge about the project.
2. That the mechanisms for credit evaluation and payment are consistent with those of the banks. This will ensure that the previously stated groups can finance the projects. Transparency will help in the auditing of project operations.
3. Coordination with the providing gas company will generate synergies that will reduce the risk for funders considering that the contributors and residents pay together for the gas bill. This mechanism will lower the credit and operating risks.
4. The mechanism for the participation for businesses will be based in open competitions. This will facilitate c
The task of bringing together diverse actors (company, public sector and neighbors) to provide infrastructure requires highly qualified staff that need training. Also organizing Trust Funds requires funding in its preoperative phase.