Microcredit Housing Loans


Bosnia and Herzegovina was part of the former Yugoslavia and suffered much destruction and damage of homes in the civil wars of the 1990s.

Reconstruction of the existing housing stock is the pressing problem in the country.

According to official data, over 450,000 housing units were partially or completely destroyed from 1992 to 1995. Almost 80 percent of these homes were destroyed or heavily damaged to the extent of being unlivable.

Since the 1995 Dayton peace accords, the people have faced the dual problems of rebuilding a war-torn economy and introducing market reforms to a formerly centrally planned economy. Many refugees and internally displaced people are still waiting to return to their damaged or destroyed homes. In 2005, over 47,500 families registered with the state authorities for reconstruction and return aid.

Habitat for Humanity and Microcredit Foundation LOK, one of the leading microfinance organizations in the country, entered into a partnership in the fall of 2010. LOK approached Habitat with a request to help design small housing loans. LOK had been providing microcredit to support employment and entrepreneurship for several years, and had identified the need for housing microloans among their existing clients. Habitat initially helped the microfinance organization conduct a market research and develop a housing microloan project. Funds for a pilot program of housing microloans were obtained through the Dutch International Guarantees for Housing Foundation.

How Habitat addresses the need

Habitat for Humanity works in Bosnia and Herzegovina through the local partner organization LOK. It is one of the leading microcredit organizations in the country. It has received a number of awards for international transparency and high quality standards of work. It operates in both the Republica Srpska, mainly populated by ethnic Serbs, and in the Federation, mainly populated by Bosniaks and Croats.

  • Home improvement loans
    Through LOK, two types of housing finance loans are offered to low-income households in Bosnia and Herzegovina. One of them provides financing for people who need individual home improvements in their houses. The second will be available for energy efficiency improvements. Loan amounts, terms, and repayment conditions allow families to substantially improve their living conditions without shouldering unbearably heavy financial burdens.

    The €1 million pilot program aims to support 1,000 families in the first year.

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