Interest-free financing and community development

Following its mission to work towards the elimination of inadequate housing in Bulgaria, Habitat for Humanity Bulgaria has implemented the program “Social protection and alleviation from deprivation for at-risk children and adolescents in Bulgaria through improving living conditions and other community based support”. The program started in July 2014 and has been funded by the VELUX Foundations for the period July 2014 – December 2020.

This initiative of Habitat for Humanity Bulgaria is actually a continuation of a successfully implemented partnership model for community development support. The project allows low-income families, living in poor housing conditions, to improve their homes. Such support is provided through establishing partnerships with local non-governmental organizations, that are actively working with vulnerable groups and communities at risk of poverty. Habitat Bulgaria provides revolving home improvement funds to local partners, which then disburse small amounts as interest-free loans to families that meet the program criteria. These interest-free loans range from 200 to 1000 BGN and are re-paid in small monthly installments for up to a one year period. All monthly installments collected from the clients are diverted back to the local Home Improvement Fund and are disbursed to the next families in need. The eligible families are usually beneficiaries of the partnering NGOs and their various social services such as family counseling, adult education courses, training schemes, health care and many other services.

The applicants are selected by a joint selection committee, composed of representatives of Habitat Bulgaria and the local partner.

The selection criteria include the following requirements:

1. Evident need of home improvement;
2. To be identified as:
• “at risk” in terms of a child raising environment;
• poor living conditions
3. The family includes children under 18;
4. The family is unable to finance the necessary home repair by themselves, but they have sufficient and secure income;
5. The family income is sufficient to cover their everyday needs incl. the monthly home-improvement installment;
6. The family shows the desire to improve their living conditions and they are willing to contribute through volunteer labor;
7. Members of the applicant family participate in activities and social services, provided by the local partner;
8. The applicant family has been living for no less than 5 years in the village/neighborhood, where the local partner operates;
9. The school-age children in the family regularly attend school.

The local partner organizations manage the home-improvement funds and contribute to: identifying and selecting borrowers, assessing the housing situation and prioritizing the needs for repair, providing consultations and assistance for purchasing materials or undertaking the repairs, collection of the loan instalments, control and monitoring of the performed repairs. The program is currently active in 8 regions of the country: Dupnitsa – in partnership with Association “Amala-Priateli”, Targovishte – with “Club of NGOs”, Kyustendil – with CDC “Vasil Levski 1965″, Sofia – with the “Health and Social Development” Foundation, Sliven – with Foundation “The Health of Roma”, Rakitovo – with Foundation “Future”, Burgas – with Association “Business Center Bourgas” and Sungurlare – with Association “Informational Business Center Sungurlare”. This opportunity is open only to clients of our partner organizations, as Habitat does not provide direct individual loans.

The program “Social protection and alleviation from deprivation for at-risk children and adolescents in Bulgaria through improving living conditions and other community based support” provides an additional opportunity to support the local community and the work of the local partners. At the end of each project year, up to 25% of the amount collected in the Home Improvement Fund from the clients’ instalments is redirected to social and community services offered by each local organization. The services, subsidized by the program are focused on improving the lives and development of the children in the community and include: counseling and social support provided by social workers; advice and support for legalization of residential properties; training and advice on sexual health and family planning; mobile medical teams; activities to prevent school drop-out and support school attendance; trainings on basic life skills including vocational trainings for parents; assistance in the process of job search, etc. This sub-granting opportunity maximizes the overall impact of the program. Thanks to the joint efforts of Habitat Bulgaria and partners, the families receive a complex, holistic solution for at least some of their multiple problems. The partnership with Habitat Bulgaria complements and adds value to the social support provided by the local NGOs.

In addition to this microfinance opportunity, Habitat Bulgaria provides numerous trainings, designed to build capacity and improve the client’s abilities to deal with real life crisis situations, such as: Family Budgeting Training, Home Maintenance Training and Energy Efficiency Training.

In 2015 Habitat Bulgaria developed an innovative educational game. Through the “Neighborhood” game, school-age children gain a first glance at complex concepts such as: saving resources, energy efficiency, hygiene, saving money. The game is distributed to schools, centers for work with children and other organizations working with students aged 8 – 14. It can be used in various extracurricular activities, in thematic hours, as well as at home.

The partnerships implemented by Habitat Bulgaria are measures that complement and add value to the social support of local NGOs. The project extends the scope of Habitat Bulgaria’s activities to support housing improvements by providing access to financial resources for socially and financially excluded people.

More information on the results achieved under the program can be found here: Interim results (1st July 2014 – 31th March 2020)