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Urban poverty, social exclusion and social housing finance. The case of PRODEL in Nicaragua

Stein, Alfredo LU (2010) In Thesis 7.
Abstract (Swedish)
Popular Abstract in Swedish

Avsikten med denna avhandling är att förstå de viktiga begreppsmässiga och operativa utmaningar som internationella biståndsgivare, liksom offentliga och privata institutioner, möter när man utformar och genomför alternativa former av sociala bostadsfinansiering som skall vara inkluderande för den fattiga urbana befolkningen. Avhandllingen försöker besvara tre frågor, baserat på en studie av verksamheten vid stiftelsen PRODEL i tre städer i Nicaragua:

- Vilka är begränsningarna som den fattiga urbana befolkningen möter i finansieringen av det stegvisa byggandet av sin privata bostad och kollektiva tillgångar?

- Hur kommer det sig att mikrofinansiering av bostäder inte alltid... (More)
Popular Abstract in Swedish

Avsikten med denna avhandling är att förstå de viktiga begreppsmässiga och operativa utmaningar som internationella biståndsgivare, liksom offentliga och privata institutioner, möter när man utformar och genomför alternativa former av sociala bostadsfinansiering som skall vara inkluderande för den fattiga urbana befolkningen. Avhandllingen försöker besvara tre frågor, baserat på en studie av verksamheten vid stiftelsen PRODEL i tre städer i Nicaragua:

- Vilka är begränsningarna som den fattiga urbana befolkningen möter i finansieringen av det stegvisa byggandet av sin privata bostad och kollektiva tillgångar?

- Hur kommer det sig att mikrofinansiering av bostäder inte alltid når de fattigaste urbana grupperna?

- Hur påverkas internationella biståndsgivare och regeringar i sin politik, och lokala finansieringsinstitutioner, av motsatsförhållandet i målen att uppnå finansiell hållbarhet och ökad finansiell inkludering?

För att besvara dessa frågor använder författaren ett realistiskt tillvägagångssätt liksom även en kritisk fallstudiemetodik lånad från disciplinerna statsvetenskap och historia, för att förklara trender och komplexiteter i ämnet. Ett argument framförs: om finansiell exkludering sker vid en stiftelse som PRODEL så kan det ske var som helst. Uppfattningarna hos huvudaktörerna som deltog i PRODELs verksamhet med bostadsfinansiering och subventioner till infrastruktur undersöktes med hjälp av kvalitativa och kvantitativa tekniker.



Avhandlingen visar att PRODELs verksamhet har resulterat i signifikanta förbättringar i levnadsvillkoren för den fattiga urbana befolkningen. Förståelsen av de olika tillgångar som de fattiga äger, har en kritisk påverkan på hur enskilda hushåll inkluderas i mikrolånprogram, även om inkomstnivåer och externa politiska och makroekonomiska begränsningar också är viktiga faktorer. Intervjuade personer ansåg att deras fattigdom mera relaterade till tillståndet i grannskapet än till hushållets inkomstnivå. Intervjuade personer uttryckte att det inte var bristen på inkomst som hindrade deras deltagande i olika bostadslåneprogram, utan bristen på pålitlig information, rädsla för det okända samt bristen på kunskap om hur mikrofinansiering fungerar. Avhandlingen visar att finansiell inkludering ökar när förbättringen av infrastrukturen bygger på tydliga och transparenta samverkansprocesser mellan den fattiga urbana befolkningen och de kommunala förvaltningarna. Slutligen ger avhandlingen nya insikter i hur konceptet finansiell hållbarhet begränsar internationella biståndsgivares och regeringars politik, liksom lokala finansieringsinstitutioner, i strävan efter finansiell inkludering. De teoretiska och praktiska gränserna för bostadsförbättringar i större skala som del av fattigdomsreduktion för låginkomstländer som Nicaragua belyses i avhandlingen. (Less)
Abstract
The purpose of the thesis is to further understand key conceptual and operational challenges that international aid donors, and public and private institutions, face while designing and implementing alternative forms of social housing finance which aim to be inclusive for the urban poor. Based on an in-depth study of the work of the Foundation for the Promotion of Local Development (PRODEL) in three cities in Nicaragua during a period of 15 years, the thesis tries to answer three research questions: What are the constraints the urban poor face in financing the incremental way they build their individual housing and collective assets? Why does housing microfinance not always enhance inclusion of the urban poor? How does the tension between... (More)
The purpose of the thesis is to further understand key conceptual and operational challenges that international aid donors, and public and private institutions, face while designing and implementing alternative forms of social housing finance which aim to be inclusive for the urban poor. Based on an in-depth study of the work of the Foundation for the Promotion of Local Development (PRODEL) in three cities in Nicaragua during a period of 15 years, the thesis tries to answer three research questions: What are the constraints the urban poor face in financing the incremental way they build their individual housing and collective assets? Why does housing microfinance not always enhance inclusion of the urban poor? How does the tension between the goal of achieving financial sustainability and increasing financial inclusion affect the policy of international donors and governments, and the practice of local financial institutions?

To answer these questions, the thesis adopts a realist approach as well as a critical case study method as used in disciplines such as political science and history to explain the trends and complexities of the phenomena investigated, and formulates an argument in the form of a proposition: if financial exclusion occurs in PRODEL it might also occur elsewhere. Qualitative and quantitative research techniques helped to assess the perceptions of stakeholders that participated in PRODEL’s small and repetitive housing improvement loans and in the co-financing mechanism for basic infrastructure components.

The thesis shows significant improvements in the living conditions of the urban poor as result of PRODEL’s investments. Although income levels and external political and macroeconomic constraints are significant factors, understanding the different assets that the urban poor possess, has a critical effect on the ways individual households are included in micro-lending schemes. Interviewees considered that their poverty situation related more to the conditions prevailing in their neighbourhood and city than to their household income levels. Family breakdown; lack of education; insecurity; the lack of opportunities in the city; or a permanent sense of helplessness given the recurrent political and economic crises were more important than their monetary consumption levels. Increased self-esteem from being included in financial schemes that improved their homes and neighbourhood was equally important. Interviewees expressed that it was not the lack of income that pre-empted their participation in housing loan schemes, but the lack of reliable information; their fear of the unknown; and the lack of knowledge on how microfinance institutions operated. Additionally, the thesis shows that financial inclusion increases when accountable and transparent participatory methods of negotiation and co-financing mechanisms between urban poor communities and local governments to improve the provision of infrastructure and basic services are in place. Finally, the thesis offers new insights on how the concept of financial sustainability narrowed the approach and policy of international aid donors and governments, and the practice of financial institutions, when seeking financial inclusion. These findings shed light on the theoretical and practical limits of up-scaling housing improvement schemes as part of wider urban poverty reduction strategies in low-income countries such as Nicaragua. (Less)
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author
supervisor
opponent
  • Professor Mathey, Kosta, Darmstadt Technical University, Darmstadt, Germany
organization
publishing date
type
Thesis
publication status
published
subject
keywords
Urban poverty, Microfinance, Social exclusion, Social housing finance, Central America, Asset accumulation, Infrastructure, Financial inclusion, Nicaragua, International donors
in
Thesis
volume
7
pages
260 pages
publisher
Lund University, Housing Development & Management
defense location
Room E:1406, E-building, John Ericssons väg 2, Lund University Faculty of Engineering
defense date
2010-06-16 10:15
ISBN
91-87866-36-6
language
English
LU publication?
yes
id
a99132df-8d58-4196-a1b3-7153a2695998 (old id 1604831)
date added to LUP
2010-05-20 11:09:16
date last changed
2016-09-19 08:45:07
@misc{a99132df-8d58-4196-a1b3-7153a2695998,
  abstract     = {The purpose of the thesis is to further understand key conceptual and operational challenges that international aid donors, and public and private institutions, face while designing and implementing alternative forms of social housing finance which aim to be inclusive for the urban poor. Based on an in-depth study of the work of the Foundation for the Promotion of Local Development (PRODEL) in three cities in Nicaragua during a period of 15 years, the thesis tries to answer three research questions: What are the constraints the urban poor face in financing the incremental way they build their individual housing and collective assets? Why does housing microfinance not always enhance inclusion of the urban poor? How does the tension between the goal of achieving financial sustainability and increasing financial inclusion affect the policy of international donors and governments, and the practice of local financial institutions?<br/><br>
 To answer these questions, the thesis adopts a realist approach as well as a critical case study method as used in disciplines such as political science and history to explain the trends and complexities of the phenomena investigated, and formulates an argument in the form of a proposition: if financial exclusion occurs in PRODEL it might also occur elsewhere. Qualitative and quantitative research techniques helped to assess the perceptions of stakeholders that participated in PRODEL’s small and repetitive housing improvement loans and in the co-financing mechanism for basic infrastructure components.<br/><br>
 The thesis shows significant improvements in the living conditions of the urban poor as result of PRODEL’s investments. Although income levels and external political and macroeconomic constraints are significant factors, understanding the different assets that the urban poor possess, has a critical effect on the ways individual households are included in micro-lending schemes. Interviewees considered that their poverty situation related more to the conditions prevailing in their neighbourhood and city than to their household income levels. Family breakdown; lack of education; insecurity; the lack of opportunities in the city; or a permanent sense of helplessness given the recurrent political and economic crises were more important than their monetary consumption levels. Increased self-esteem from being included in financial schemes that improved their homes and neighbourhood was equally important. Interviewees expressed that it was not the lack of income that pre-empted their participation in housing loan schemes, but the lack of reliable information; their fear of the unknown; and the lack of knowledge on how microfinance institutions operated. Additionally, the thesis shows that financial inclusion increases when accountable and transparent participatory methods of negotiation and co-financing mechanisms between urban poor communities and local governments to improve the provision of infrastructure and basic services are in place. Finally, the thesis offers new insights on how the concept of financial sustainability narrowed the approach and policy of international aid donors and governments, and the practice of financial institutions, when seeking financial inclusion. These findings shed light on the theoretical and practical limits of up-scaling housing improvement schemes as part of wider urban poverty reduction strategies in low-income countries such as Nicaragua.},
  author       = {Stein, Alfredo},
  isbn         = {91-87866-36-6},
  keyword      = {Urban poverty,Microfinance,Social exclusion,Social housing finance,Central America,Asset accumulation,Infrastructure,Financial inclusion,Nicaragua,International donors},
  language     = {eng},
  pages        = {260},
  publisher    = {ARRAY(0xb4d7c88)},
  series       = {Thesis},
  title        = {Urban poverty, social exclusion and social housing finance. The case of PRODEL in Nicaragua},
  volume       = {7},
  year         = {2010},
}