Micro-loan program has been implemented by non-profit organization ETP Slovakia – Centre for Sustainable Development in partnership with Habitat for Humanity International and seventeen municipalities in eastern and central Slovakia since 2007.
This Project has been realized since 2007. The ETP microloans are not-for-profit and they are dedicated exclusively for the reconstruction of a house or a flat, or for the self-help construction of a house. They are provided to clients that successfully complete our Financial Education course, learn to save money within our Savings Program and are willing to work on the construction of their own house. Since the beginning of our Project, 546 disadvantaged citizens, our clients from 17 towns and villages in Eastern and Central Slovakia, have received small loans to improve the quality of their homes.
Microloans amounting to either 1 160 Euros for reconstruction, or up to 6 160 Euros for the construction of homes, have been provided to people who would otherwise have no chance to meet the criteria of commercial institutions providing loans for housing purposes. Their only chance to access money would be to turn to non-banking financial institutions or loan sharks. Our clients are mostly people living on social benefits or income from occasional jobs.
A crucial role in determining the Program´s success is played by Local Microloans Officers. In their towns or villages, they suggest suitable clients to be involved in the Program and they help us collect the monthly repayments. If a Local Microloans Officer, often the Mayor or a Field Social Worker, has been responsible in making the selection of clients, taking into account the client´s previous financial discipline and regularity of his income, it is reflected in the total sum repaid.
Since the beginning of the Program in 2007, we have lent a total of 732 589,29 EUR of which 521 270,35 EUR (71,15%) has already been repaid (as of June 2015). The repaid microloans constitute a revolving fund, which is used for lending to new applicants whose reliability is verified by their participation in the Savings Program and the Financial Education course.
The initial capital from Habitat for Humanity International has become a part of a ‟revolving fund″ – the money repaid has been lent again; however, it is no longer sufficient. The Project has become very popular among our clients and people from other towns and villages are now requesting more microloans. Especially popular among the inhabitants of marginalized Roma communities is the Program of self-help construction of family homes to become clients´ asset.
We are very happy to see the clients from Rankovce, who have taken up the microloans to build their family homes, making their regular monthly payments of 50 Euros.
To realize the Project, we have partnered with Človek v tísni (“People in Need Slovakia”) and Pre lepší život (“For a Better Life”) association. Together we now keep on searching for new partners to help us extend the Project.
We have every reason to believe that, in the new EU Programming Period for the years 2014 – 2020, microloans will find their way to clients from all marginalized communities in Slovakia, facing an urgent need for funds to build the new as well legalize the existing homes.