Affordable homes and stronger communities for 16,157 families in El Salvador

A place to lay one’s head, to return to, to find solace – all these correspond to the idea of home. At its most basic, however, a home provides stability and security for individuals or families and is recognised as such in the Universal Declaration of Human Rights.

At Oikocredit, we recognise the role of affordable housing in helping individuals and families to thrive and in fostering a resilient, cohesive, and robust community capable of withstanding economic, social, and environmental challenges.

Supporting housing security is a key plank in the focus on communities at the heart of our 2022-2026 strategy. As we have learnt, improving the quality of life for those with low incomes builds resilience across the board.

For more than 15 years, we have been working with Hábitat para la Humanidad El Salvador, supporting home improvement loans to families with low incomes.

Between 2011 and February 2024, we have provided the nonprofit organisation with loans of USD 17 million. The money has been used to provide financing to families across the Central American nation, helping them fund housing construction, expansion and improvement, including installing water and hygiene facilities.

“The financing has contributed [to providing] families with a dignified house with clean water, proper ventilation and secure enough to resist climate changes,” says José Humberto Ulloa, Oikocredit Senior Investment Officer for Central America and the Caribbean.

Patricia Hernandez: A place to dream

That’s something Patricia Hernandez, 32, a Hábitat para la Humanidad El Salvador client has experienced firsthand. Together with her husband and their three children, the supermarket worker now has her own home after years of living at different addresses, including rental properties.

She says her home creates stability for herself and her family and helps support their dreams.

“For me it is a huge satisfaction to be able to have my own little house, to have something for my children who are small [so] they are not going to be affected by frequent moves when we are evicted from a rental house,” she says.

She took financing of USD 17,000 from Habitat and also had help building her home in Cojutepeque city.

“Our house is in a pretty difficult location. The mountain is very steep here. Two Hábitat brigades came from other countries to help us with that,” she says. “When I was [first] talking with Hábitat, I was pregnant with my twins… The Habitat people reassured that when the girls would be born, they would be able to go to their own house. That was my dream and my dream came true, because they gave me my own house and a week later the twins were born.”

Five years later, she wants to build out a little more on the other half of her lot. “My dream is to make the house a little bigger and be able to let my children study. And maybe later I can also start studying together with them,” Patricia says.

Housing finance: Enabling family development

The UN describes homelessness as a global crisis. Worldwide, 1.6 billion people live in inadequate housing conditions worldwide, with about 15 million forcefully evicted every year according to UN-Habitat, the international agency for human settlements. It has noted an alarming rise in homelessness in the last 10 years.

Oikocredit’s partnership with Hábitat para la Humanidad El Salvador has supported more than 16,157 families with better housing and sanitation through financing. The majority of these (60%) are in rural areas. More than half (56%) the financing went to households headed by women, a total of 9,103.

Overall, the average income of each beneficiary family is USD 470.

The project has contributed to better socioeconomic outcomes for beneficiaries while improving health conditions across local communities and supporting the development of community infrastructure, says Ernesto Tobar, Executive Director, Hábitat para la Humanidad El Salvador.

“Housing financing is a trigger for family development, as it contributes to improving self-esteem, habitability, health, education, hygiene, and child development, among others,” he says.

Small home loans help families to build or renovate their houses over time without the need for large upfront investments, a method called progressive construction. The financing also indirectly stimulates local economies.

“Working with funders such as Oikocredit guarantees Hábitat para la Humanidad El Salvador access to loans and capital investments, which allows us to have more liquidity and increase our impact,” Ernesto says.

“Oikocredit is a partner that has trusted in the social impact through social housing in the country, demonstrated through various approved fund management and knowledge exchange sessions with the organisation,” he adds.

Both organisations are aligned around common values and interests, including sustainability, environmental stewardship and the impact of microfinance.

Technical assistance: Better outcomes at lower costs

Besides microfinance loans, our partner closes the loop through other kinds of support services, such as comprehensive training and technical assistance.

Families financed with supportive housing services receive training on financial education, construction basics, disaster risk management, and community development. All financed families receive Technical Construction Assistance (ATC), which includes specialised guidance on construction processes, materials, technical standards, and information on materials and labour costs.

This assistance reduces long-term costs and improves the quality of life for occupants, providing safer and more sustainable housing, Ernesto says.

Tangible outcomes include sturdy, good-quality homes built to resist the impact of climate change, water security by way of access to clean water, adequate waste disposal, and financial education.

In total, the partnership has trained more than 16,200 people trained in financial education.

“The community-centred approach is comprehensive as it includes local economic, social, educational, productive development, infrastructure, provision of basic services, social, sports and family integration,” Ernesto says.

Mobilising local actors and community resources is important to achieve greater scale and impact, in addition to enabling better access to financial, technical, technological, human, and other complementary resources.

Community focus: Holistic approach to resilience

Oikocredit’s partnership with Hábitat para la Humanidad El Salvador has improved the quality of local housing and helped increase community wellbeing by supporting projects that address local health, education, and infrastructure needs, Humberto says.

And because community members can directly oversee projects, there is better accountability, he adds.

“The community-focused approach enhances the community’s ability to withstand economic and environmental shocks by building local capacity and resources. Community members gain skills and experience, enhancing their ability to manage future projects, gives community members a sense of ownership and control over their own development,” he explains.

“Overall, a community-focused approach is a holistic approach that not only addresses immediate financial needs but also fosters long-term sustainable development and social cohesion,” Humberto says.

Be part of the Oikocredit community

• Read about our community focus in our 2022-2026 strategy: Strategy - Oikocredit International
• Read about how our other partners are making a difference around the world in our annual Impact Reports, published each September: Impact Reports