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By 2020, the urban population in Ghana is expected to double. Already, almost five million Ghanaians live in urban slums, and nearly 40% live below the poverty line. Two CHF initiatives are providing targeted solutions to assist Ghanaians living in slums and informal settlements so that they can become empowered to markedly improve their lives.
Boafo Microfinance Services Ltd.
CHF International and HFC Bank Limited (Ghana) have established Boafo Microfinance Services Ltd., a microfinance service company which is providing much-needed housing and enterprise microfinance loans to households living and working in the informal settlements of Accra, Tema, and Kumasi.
Boafo, which means "helper" in the native Twi language, combines Ghana's largest mortgage lender with CHF, to provide a “helping hand” to low- and moderate-income Ghanaians in their pursuit of business, shelter and educational opportunities.Funding for Boafo will be provided by HFC Bank, CHF International, the Global Development Alliance (GDA) of the U.S. Agency for International Development (USAID) and the United Nations Slum Upgrading Facility (SUF).
It is estimated that in Ghana, 1.9 million urban poor face limited access to credit to improve or build their homes. In its role as a unique supplier of non-mortgage housing microfinance loans, Boafo:
> lends for the improvement or expansion of homes in informal settlements;
> lends for business expansion to improve household incomes;
> requires less collateral coverage for loans to informal sector entrepreneurs than that required by other lenders;
> offers access to savings services through the HFC Bank; and,
> offers minimal consumer education on managing credit and home improvement projects.
In the next five years, at least a quarter of the loans are expected to be for home improvements, strengthening the most important asset of low-income families. Flexible loan amounts, terms and payments will allow urban Ghanaians to make substantial changes in their homes, such as adding rooms, improving roofs, and adding utilities, while remaining affordable.HFC and CHF envision Boafo as a pilot that could be replicated in other West African countries over the next several years.
Boafo began making its first loans in April 2007 and now has an outstanding loan portfolio of US$1.1m with 450 borrowers.
Slum Communities Achieving Livable Environments with Urban Partners (SCALE-UP)
Through the SCALE-UP program, which is being funded by the Bill & Melinda Gates Foundation, CHF International and the People's Dialogue of Ghana (PDG) are working together to improve access to credit and improve housing conditions for residents of nine targeted slums in Accra and Sekondi-Takoradi. With growth levels in the double digits, municipal governments have become inundated and cannot respond to the various needs of the urban poor quickly enough -- affordable shelter, access to clean water and sanitation, and job opportunities in the formal sector.
By strengthening the capacity of PDG and other local non-governmental organizations to respond to the needs of residents, communities can guide their development from the bottom-up. In addition to access to affordable credit and construction assistance to improve their existing shelters, micro- and small-entrepreneurs will receive demand-driven vocational training so that they can tailor their businesses to the growing Ghanaian economy.
SCALE-UP is concurrently improving the lives of slum residents in Pune, Bangalore, and Nagpur, India.
Download the Ghana fact sheet above for more information, including personal stories of empowerment.