SEWA Grih Rin Limited (Sitara)

The challenge

More than 65 million people live in India’s slums due to migration, rapid urbanization and an ever-growing population. The government has estimated a shortage of 20 million homes in the country’s urban sprawls, which is expected to rise to 34 million by 2022. Owning a home is nearly impossible for individuals working in the informal section and making less than $3,000 a year. High costs and low incomes shut these individuals out of the formal financial markets and limit their access to loans and land tenure, making it hard for them to buy or build a home. Inadequate housing and financial exclusion contribute to a larger socioeconomic trap that often creates pockets of chronically poor populations unable to access basic services like electricity, clean water and sanitation or to participate in formal systems that can lead to better opportunities.

The innovation

SEWA Grih Rin recognizes that women working in the informal sector often hold the key to bringing families out of poverty. While these hard-working women want to improve their family’s living situation, they run in to trouble trying to access loans due to the nature of their employment and housing. SEWA Grih Rin is a unique housing finance company that aims to become that missing link in the financial chain by providing small loans to enable these women to improve their living situation. Although the government provides these women with security of tenure, they don’t possess a formal title, which they can mortgage, yet the security of tenure requires them to invest in the maintenance and improvement of their homes. With the help of SEWA Grih Rin, they will finally have the funds to do so. The company requires women to contribute capital to SEWA Grih Rin to access the loans, in turn leveraging the power of community.

The impact

SEWA Grih Rin marks India’s first housing company to provide this kind of financing, enabling individuals to build a credit history for the long-term. The company’s loans will enable women to invest in improvements for their homes, such as constructing toilets, building bedrooms or adding a storefront to generate more income, and for the first time plan for the future. In its first seven years of operation, SEWA Grih Rin hopes to reach at least 15,000 households with a majority earning monthly incomes ranging from $80 to $350.