FSUS stepped in to provide credit enhancement mechanism | Daily News

FSUS stepped in to provide credit enhancement mechanism

Low income housing for the under-served settlers of the society in Sri Lanka has had a beneficial effect on the lives of those living off a daily wage. A roof over their heads in a permanent house has proved to be the best they can get for what they can afford.

Supporting these under privilege segment is a national requirement of the day.Generally these people are innocent and trustworthy, but the main barrier is finding moneys to build their houses. The commercial banks would not look at their requirements as the loan is small, less profitable and on the other hand issue of getting collaterals. Most of them cannot submit acceptable securities to the banks for the housing loans as their lands are un-divided or no proper deeds to mortgage and many banks are not keen on lending for this type of housing loans due to the high risk probability no guarantee of any pay back method.

In most of the rural and urban areas, the inhabitants formed their own groups or community based organizations (CBOs) to help each other via numerous savings systems.These small segments are linked with large organizations such as Micro finance Institutions (MFIs) and NGOs. These organizations have a strong relationship with the members and knowledge about their savings habits and loan affordability.

LFSUS stepped in to provide credit enhancement mechanism to encourage the banks & MFIs and to bridge the aforementioned gap between the banks, MFIs and rural folkin order to finance this underserved people. The Origin of LFSUS

LFSUS was established as a Company limited by guarantee in 2007 in partnership with the United Nations Human Settlement Programme (UN-Habitat) and the Ministry of Urban Development.

The United Nations in its endeavor to address the issues of poverty, sanitation and housing for billions of marginalized communities across the world, set up The Slum Upgrading Facility (SUF) Pilot programme of UN-Habitat in 2004. The projects were initiated in Kenya, Tanzania, Ghana, Indonesia and Sri Lanka.

The success of this programme in Sri Lanka has opened new vistas for future development and expansion.

Accordingly main Project Partners of LFSUS are MFIs, Financial Institutions, Community, and the Government. LFSUS recently arranged three bulk loans of Rs.10 million each for MFIs in NCP for housing, upgrading, sanitation, access to clean water, lighting among other common amenities.Apart from that LFSUS has covered Western, Sabaragamuwa, Central and Southern Provinces already. 


 

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