The Role of Financial Education in Improved Housing
This paper analyzes information needed by Habitat for Humanity to develop its housing finance strategy for the Asia-Pacific region. It draws on information from the region, noting where influenced by broader global trends.
The paper emphasizes the importance of offering financial education in association with housing finance partnerships to build the financial literacy of populations that are vulnerable to economic shocks and unequal power relationships. Study findings indicate that there is a lack of systematic evaluation of financial education programs for homeowners. Financial education, however, is expanding and is most successful when:
- Targeted clientele belong to a low income community;
- Financial or peer incentives accompany the training program;
- Financial education program has discrete objectives;
- Participants have the benefit of a longer time frame to plan their finances around their life cycle needs.
Financial education can be bundled with demand driven products such as housing. Practitioners will need to experiment with delivery mechanisms to achieve scale. Two priority areas for improving the delivery of financial education and housing finance in emerging economies are diversification of financial education delivery methods and more research on available delivery options in emerging economies.
