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Global Urban
Development Magazine
GUD Magazine Home
Transforming Urban Markets for the Poor through Collective
Creating a World Without Poverty: Social Business and the Future
of Capitalism
Size of Low
Income Housing Markets
The Next 4 Billion – The Housing Market
A Value Chain Framework for Affordable Housing in Emerging
Communities to Transform Markets
WWB Gender Study: The Capacity of Poor Women to Grow Their
Businesses in the Dominican Republic
Social Market Development and Social Mobilization in the Value
Chain of the Construction Industry
Understanding Asian Cities: A Synthesis of the Findings from
Eight City Case Studies
Market-Based Models for Land
Development for the Low/Moderate-Income Majority
Putting the "Housing" Back into Housing Finance for the Poor:
The Case of Guatemala
Housing Microfinance: Is the Glass Half Empty or Half Full?
Capital-Market Funding of Affordable Housing Finance in Emerging
Countries: The Business Case
Finance for Low-Income Housing and Community Development
Business Models
Housing the Poor by Engaging the Private and Citizen Sectors:
Social Innovations and "Hybrid Value Chains"
Bringing Low-Income Consumers into the Market in Colombia: Home
Improvements that Make a Difference
Private Initiatives
Private Sector Involvement in Slum Upgrading
The Millennium Cities Initiative: A Comprehensive
Approach to Reducing Urban Poverty and Generating Sustainable
About the Authors
Editorial Guidelines
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August 2008
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Published by
Global Urban Development
Executive Editor:
Dr. Marc A. Weiss
Managing Editor:
Nancy Sedmak-Weiss
Issue 2
November 2008
Putting the "Housing" Back into
Housing Finance for the poor: The Case of Guatemala
Irene Vance
In housing microfinance (HMF) circles it was envisaged that
the unmet demand for housing would be met by a merging of the
finance gap. Banks and mortgage lenders would go down market by
making smaller loans to a lower-income clientele. Microfinance
institutions (MFIs) would expand the size of loans and target
clientele for their housing credits somewhat upwards.
Over the last decade, however, HMF appears to have grown
mostly through microfinance institutions creating a home
improvement product and, to a lesser extent, making modestly
larger loans for new home construction and purchase. However,
the supply of HMF by MFIs will most likely satisfy only a
miniscule fraction of market demand in most countries even if it
continues to increase at current rates for decades (see
Ferguson's paper on housing microfinance in this issue of
Global Urban Development Magazine). As the MFI industry has
found technical assistance an unnecessary expense for
microenterprise lending, MFIs have also tended to offer only
microcredit for affordable housing without other products and
services essential to expand this market.
HMF requires a much broader institutional platform than MFIs
offer in order to expand dramatically to a scale relevant to
demand in emerging countries. Regulated financial institutions
such as commercial banks, in particular, but also housing
cooperatives, and credit unions can help provide the broader
organizational base necessary for expanding HMF loan volumes to
massive size (see Magowan's paper on capital market funding of
housing microfinance in this issue of Global Urban
Development Magazine).
Banks have a number of comparative advantages in serving the
poor and reaching economies of scale. These include extensive
branch office networks, back-office support and I.T. platforms
for internal controls, as well as access to their own financial
resources from deposits.
Yet, while banks may recognize significant opportunities for
expanding their market, they have been wary of housing
microfinance because of the complexity of housing, and the
perceived risk of offering loans to low-income families where
land title is often absent. The experience of private
commercial banks in microfinance – let alone housing
microfinance – is still relatively limited (Baydas, et al
1997). According to a USAID study commercial banks globally has
been reluctant to develop the capacity to deliver housing
microfinance loans (Martin 2008). Exact figures are
unavailable, but estimates indicate that at most a dozen of the
200 commercial banks currently offering microfinance globally
extends housing microcredit.
Fortunately, the reluctance of banks to lend for affordable
housing for the low/moderate income majority appears to be
changing for a number of reasons. First, significant
discussions about unbanked customers and the market opportunity
to build new business models at the bottom of the income pyramid
have intensified over the last five years (Prahalad 2004).
Second, the sheer size of housing demand as well as the
strategic importance of housing credit in selling other products
has caught the attention of banks and corporations. The World
Resources Institute and IFC Corporation (2006) have quantified
the global bottom of the pyramid (BOP) market at 4 billion
people with an aggregate purchasing power of US$ 5 trillion,
including around $400 billion of unmet demand for housing
investment. More than half these families have no relationship
with commercial financial institutions – not even a checking
account. Banks have extended mortgage loans mainly for purchase
of new developer-built units to the top 20% to 30% of the income
pyramid, and left out even most moderate-income households, let
alone the estimated 1 billion slum dwellers worldwide. The
challenge is to bring a package of financial services that
includes housing credit to scale to the BOP.
Yet finance is only one part of organizing an affordable
housing value chain necessary to expand markets vastly.
Typically, credit, alone, fails to stimulate a supply of
high-quality, low-cost housing solutions. Finance must be
joined with other housing-related products and services
including land, title or other forms of secure tenure, quality
building materials, construction technical assistance, basic
services, and other ingredients to house the low/moderate income
majority. No one organization contains the elements adequate for
this task. However, business alliances among various
institutions can create the packages of products and services
necessary to produce a wide range of low-cost shelter solutions
suited to the many housing submarkets used by the bottom of the
income pyramid.
This paper profiles the experience of Guatemala's second
largest commercial bank, G and T Continental, in housing
microfinance and in assembling value chains in affordable
housing production through business alliances.
The first part of the paper will examine the Guatemalan
affordable housing context, the housing microfinance program of
G and T Continental and how this bank joined micro lending with
technical assistance in construction. This multiple services
approach by a commercial bank provides some fresh insights on
how and why to put the "housing" back into "housing
The second section of the paper will describe the alliances
that G and T Continental has established with the land
developers, construction companies, and Guatemala's largest
cement manufacturer to assemble value chains that offer a range
of low-cost, high-quality housing solutions for low-income
Context and
the Housing Microfinance Program of G and T Continental Bank
According to 2008 figures Guatemala has a population of 13
million. 56% of all Guatemalans live below the poverty line and
16% live in extreme poverty (World Bank). Housing is the second
major expenditure after food, by the BOP at US $1.6 billion per
annum, or US $911 per household (World Resources Institute, and
International Finance Corporation 2006). From the perspective
of building materials suppliers, this represents an immense
market. However, from the standpoint of individual low and
moderate-income households, this purchasing power falls far
short of the amount necessary to pay for a mortgage to purchase
a developer-built complete housing unit.
Hence, as in much of the rest of Latin America, few
affordable housing options exist for the low income population.
The majority must build their own homes "incrementally" or
"progressively" largely funded with family savings over a period
of 10-15 years (see Ferguson's policy introduction on the value
chain framework in this issue of Global Urban Development
Magazine for an analysis of progressive building).
In Guatemala the housing sector faces two critical
challenges, a high deficit and low quality of existing houses.
According to data from the Guatemalan Vice Ministry of Housing,
the total housing deficit is 1.2 million units, and of these
more that 700,000 make up the qualitative deficit.
Approximately 20% of households lack one or more basic services
and 25% of households suffer from overcrowding. Broken down by
income, 591,167 houses are required for the poor and the extreme
poor households and over 420,000 households for low-moderate
income families (Velasco and Solo, 2008).
A lack of access to financial services generally and housing
finance specifically exacerbates the shelter problems of the
poor. 74% of Guatemalans are unbanked (7.1 million homes) and
55% of these have never completed a bank transaction (WRI,
2006). Access to credit is highly concentrated geographically,
and by income segment. Areas near the capital city and main
economic centers to the southwest use the great bulk of
available home credit. According to UNDP report banks play a
fairly minor role in providing credit to Guatemalans, whatever
their income, most borrowers in all income groups obtain credit
through informal sources (UNDP, 2007). However, studies carried
out on behalf of DfID of the unbanked show that these households
have considerable interest in gaining access to financial
services (Velasco et al, 2005). This data illustrate the
opportunities to expand credit services to the under- serviced
regions and unbanked population.
Government funds are scarce, with an estimated 6% of national
government's budget invested in housing by FOGUAVI. In the last
decade, the number of MFIs has increased. Saving and loan
cooperatives working in the affordable housing at market
interest rates have also multiplied, although the supply of
housing credit is still modest. According to World Bank
estimates these financial institutions cover about one fifth of
the demand for home improvements and basic services provision
(Velasco and Solo, 2007).
Meeting this enormous unsatisfied demand for affordable
housing will require the entry of new lenders and service
providers appropriate for the many segments of the affordable
housing market. Although lack of long-term capital is one of
the most commonly-cited reasons for limited growth of housing
finance, building retail capacity is equally important for
achieving scale in housing microfinance. More distribution
channels are clearly needed.
Given this context, the Swedish International Development
Cooperation Agency (SIDA) has capitalized a second tier
institution to provide both financial and non financial services
to MFIs. SIDA has a long track record of working with low
income housing initiatives in various regions from Central and
South America to South Africa. In five Central America
countries between 1998-2005, over US$52 million have been
provided as catalyst start up funding to foster the development
of innovative and sustainable models of micro-lending for
housing with technical assistance in construction for
progressive improvements, land titling, and new construction of
housing, especially for families living in poverty. To date
110,000 families have accessed housing micro loans, representing
6.5% of the total urban poor population of the Central American
region (Stein and Vance, 2007).
In Guatemala, The Trust Fund for Local Development in
Guatemala (FDLG) a second-tier institution supported by SIDA,
set up in 2000, has focused on the expansion of housing
microfinance among a wide range of financial service providers.
FDLG offers lines of credit as well as technical assistance to
enhance in-house capacity of financial institutions and has
brought together actors to create packages of products and
services including housing microfinance to reduce the costs of
progressive housing and add value for families – that is,
complete the affordable housing value chain.
Currently FDLG works with 12 financial institutions; three
rural development associations, four MFIs, four cooperatives,
and most recently with G and T Continental Bank.
G and T
Continental Banks' Housing Microfinance Program
G&T Continental Bank (hereafter, called "the Bank") is a
member of the Financial Group G and T Continental. It is the
second largest commercial bank in Guatemala and fifth in Central
America with 44 years experience in the market. Traditionally,
it has been one of the major mortgage finance providers.
Currently it has 1.6 million clients, a portfolio of over
US$1,660 million, more than 4,000 employees, 222 branch offices
and services points throughout the country, as well as 26
branches in the United States, El Salvador, Costa Rica, and
Panama. In 2006, the top management of the Bank took the
strategic business decision to go down market to make smaller
loans to lower-income households than it had customarily
A microfinance unit has been established within the existing
institutional structure to take advantage of its extensive
resources and systems. It forms part of the new product
development division of the Bank, (as shown in the diagram
Creation of the microfinance unit within the Bank's structure
has required a fundamental change in the culture of the Bank at
all levels. A major part of the start-up phase of the
microfinance unit has focused on the transformation of
highly-centralized management systems to decentralized
operations in order to ensure closeness to the client; one of
the golden rules of success in microfinance. The General
Manager of the Microfinance Unit, who previously managed a
well-known Guatemalan MFI, has played an instrumental role in
this change. The commitment of the Bank's top management and
the resulting incorporation of microfinance into the
organization's core mission have proved fundamental to laying a
solid foundation that will lead to scale.
The general management for microfinance was in place by
February 2006, and by July of the same year a pilot began in
four branch offices. A specialized team to attend to the low
income segment has been trained, both by hiring new staff from
outside the Bank and re-training existing personnel. After the
initial pilot phase, a process of decentralization of
microfinance followed to 84 branches with 118 trained loan
officers. Housing microfinance is currently offered in eight
branch offices. Building an extensive new client base drawing
from the unbanked population is central to the Bank's short and
medium term strategy for expanding housing microfinance.
The Bank uses various "sub agents" for expanding its
financial services to underserved clients and areas. Small and
medium-sized registered business – gas stations, hardware
stores, pharmacies or general stores -- serve as outlet points
for a number of banking services, including loan repayments,
payment of utilities, and changing checks, among others. This
approach enhances banking services, especially in the interior
and rural areas of the country, without the Bank incurring
expenses in the expansion of its own infrastructure.
The Bank also offers credit lines to 12 MFIs for on-lending
to low-income families. Although these credit lines with MFIs
currently represent a small fraction of the operations of the
microfinance unit (0.7%), they have strategic value for the
Bank, the MFIs, and the underserved population. Through the
MFIs, the Bank can provide services to customers in income
segments beyond the Bank's normal reach; for example, through
communal banks in rural communities. The MFI acts as an outlet
for the Bank's products that the MFI cannot provide alone, such
as deposits, which, banking laws prohibit unregulated financial
institutions such as these MFIs from taking. As a result,
customers enjoy a greater range of financial services. The MFI
receives a commission. Hence, it is a win-win approach for the
Bank, the MFIs and the customer.
The Bank's target microfinance clients are families with a
monthly family income between US$200-US$1,000, salaried
employees or self-employed informal workers and families that
receive remittances. Products and services include loans for
micro and small enterprises, home improvement, expansion of
existing houses, new construction on an individual plot, sites
and services, and new home purchase. Additionally, the Bank
offers its microfinance clients a variety of financial services,
including current and long-term savings accounts, micro
insurance, and pensions. The following table shows the main
terms and conditions of the housing microfinance products.
Table 1.
Terms and Conditions of Micro Loans for
US$21,000 – or US$4,800 for BOP
years – Housing Improvements
years – Site and Services
Up to
15 years – Construction on Individual Plot and New Home
Interest Rate
Fiduciary – up to US$6,000
Mortgage – over US$6,000
guarantees are accepted
Source G&T Continental, August 2008
Growth rates have been impressive. According to the
Economist, G and T Continental now has the largest market
share in microfinance in Guatemala (Economic Intelligence Unit,
2008). In the first 26 months the total active microfinance
portfolio has reached US$102 million, and over 18,000 active
clients. Microfinance represents 5.6% of the total active
portfolio. The housing microfinance active portfolio is US$4.2
million, with over 1,700 active clients. The average housing
loan is US$2,900, 66 % of the portfolio carries a five-year loan
term, and 91% of loan guarantees are fiduciary. As shown in the
follow chart, housing improvements is the main product,
representing 54% of the loan portfolio, followed by construction
on individual plot.
As in the rest of Central America, a very high share of
households – 86% of Guatemalan families – have secure rights to
a home or plot (although many lack full title to the property).
In comparison, 61% of families in the EU countries and 69% in
the US are homeowners.
This high share of homeownership suggests that the Bank's two
main housing credit products – home-improvement and new
construction on individual lots – target a mass-market including
most low and moderate-income families.
Nevertheless, reaching the scale necessary for profitability
presents numerous challenges for these products. Clients are
dispersed rather than concentrated in new developer-built
subdivisions. Thus capturing and attending each client's needs
may add extra time to the loan application process. The extra
step in technical evaluation of each individual client's needs
can add to costs. Re-modeling existing units adds an extra
dimension of complexity given that each improvement process is
unique, thus solutions can be taken off-the-shelf less
In response to these realities, the Bank´s business model has
two strategies for reaching low-income families: developing its
own in-house capacity to provide micro loans that include
technical assistance in construction with a streamlined method
that offers personalized services to client needs; and through
business partnerships with land developers, construction
companies, and a large cement manufacture in a joint sales/loan
processing strategy.
To date, the Bank's own in-house capacity of nine technical
advisers has generated 50% of the HMF portfolio, almost
exclusively housing improvements; the other 50% of the portfolio
has come through its business partnerships. The next section
will examine both these strategies and some of the preliminary
Joining HMF with Technical Assistance in Construction
In microfinance circles, whether to include technical
assistance or not is one of the unresolved debates. According
to a recent review of Accion's International key MFI partners,
provision of formal construction advice is not common (Mesarina
and Stickney, 2007). The arguments for and against are
Many MFIs view technical assistance as inessential for
eligibility or repayment performance (see Tilock´s chapter on
technical assistance in Daphnis and Ferguson, 2004). From the
perspective of the MFI, construction technical assistance falls
outside the scope of their expertise. Further, some MFIs think
construction assistance may negatively affect payments if there
is poor customer satisfaction with the service or the quality of
A small study commissioned by Accion International, of two
MFI experiences in El Salvador has become the cited reference
among those that affirm that technical assistance is
superfluous, since it suggests little demonstrable difference in
housing quality between houses built with or without formal
technical assistance (Shumann, 2004). Interestingly, the same
MFIs studied have continued to innovate and refine their
technical assistance services. In summary, the minimalist
approach, or "credit-only" housing product, assumes that access
to a micro-loan is sufficient and that clients will rely on
their own builders, which proliferate in the informal
construction sector. Hence, in many cases, clients manage their
home construction.
Advocates for the inclusion of technical assistance, argue
that to ignore the technical challenges of low income housing
provision is to ignore half the problem. Hence they urge that
the "housing" be put into "housing finance." To do so
microfinance providers will need to seek new business models to
provide technical construction services directly, or indirectly,
through other distribution channels.
There is a mounting body of evidence to show that unguided,
self-help home construction constitutes one of the principal
challenges of informal shelter and settlement. Unplanned
construction, which characterizes progressive building of
additional spaces in a piecemeal fashion, typically costs more
due to waste of building materials, errors (e.g. crooked walls),
poor use of available space, and lack of proper ventilation and
illumination. It also often takes much longer – an average of
16 years to build a self built house in Mexico according to a
CEMEX study. Household surveys and focus groups in a recent
investigation sponsored by Cities Alliance and the municipality
of Sao Paulo (2007) found that most Brazilian low-income
families strongly want assistance in planning and construction
of their home improvement, and many are willing to borrow at
market rates to hire specialized labor for construction.
Technical assistance in construction becomes more important
as the complexity and size of the work increases and as
household incomes rise. Structural work such as pouring a
foundation, adding a second story, building a new house, or
altering a load bearing wall demands expertise. Particularly as
rising earnings joined with social programs increase real
household incomes for the BOP in many emerging countries (e.g.
much of Latin America and Asia), families want and can afford to
pay for technical assistance in construction and specialized
labor. A study carried out by FIDEG, for the Foundation for
Local Development, PRODEL in Nicaragua, which has over a decade
of experience in combining micro loans and technical
construction assistance, shows that not only are families
willing to pay, the service has additional add value,
particularly for women heads of households, in cost opportunity,
since they have neither sufficient knowledge of building or time
to supervise the work of the hired mason (FIDEG, 2006).
From a business perspective, joining technical assistance in
construction with other elements of the affordable housing value
chain (credit, a quality building materials, title, urban
services, remittance services etc.) increases the market size
for each of these components (see Ferguson's policy introduction
on the value chain framework in this issue of Global Urban
Development Magazine). In contrast, providing only one of
these essential products or services without integration into a
package holds much less value for households. For example,
CEMEX concluded that offering only cement -- its core product --
would generate much lower cement sales than a package of quality
building materials (including cement), construction technical
assistance, microcredit, and a savings program in order to
construct a major home addition more quickly at lower cost
(typically, building a bedroom). Not surprisingly, Mexican
families really value a bedroom and not the cement to build a
bedroom. This market study laid the basis for this company's
award-winning Patrimonio Hoy program (see Schmidt's paper
in this issue of Global Urban Development Magazine).
The decision to join HMF with technical assistance in
construction also depends on institutional perspective. An MFI
that extends mainly small home improvement loans and considers
HMF a secondary adjunct product to its central goal of
microenterprise finance (the norm for MFIs with HMF products)
may well have little incentive to add technical assistance in
construction. FDLG, in Guatemala and PRODEL in Nicaragua
encourage all the MFIs to provide the service either as part of
their own non financial services or through outsourcing,
especially since each recognize that there is a huge unmet
demand for specialized building construction services for the
poor, and these services generate employment in the construction
sector. A large commercial bank responsible for financing major
home improvements, construction of new units, urban
infrastructure and services, and other aspects of much of a
metropolitan area and that values housing finance as part of its
core mission has a compelling interest in the quality of the
How can technical assistance be packaged efficiently and
effectively for both the provider and the customer? Does
technical assistance have added value for all types of
progressive improvements? Is it viable for financial
institutions to provide this as an in-house service or is it
best outsourced to specialist NGOs in the private sector? These
are among some of the most pressing questions that are addressed
in the business model of G&T Continental, a bank that considers
that technical assistance is key in the housing value chain.
From the outset the housing loan product was designed to
include technical assistance in construction, provided by the
Bank's in-house capacity to families to whom they grant micro
loans for progressive housing improvements. The Bank considers
that technical construction assistance adds value both in the
pre-credit and post-credit process as well as providing a better
quality housing solution suited to the needs of the client.
Hence technical assistance is justified for several reasons:
clients often do not have sufficient knowledge of pricing,
quality or quantity of building materials required to prepare an
accurate budget. Frequently they rely on a local informal sector
builder, which greatly raises the risks of inaccuracy;
over-budgeting or under-budgeting are not uncommon.
The setting up of the technical assistance facility has been
supported by FDLG. In addition to the credit line for lending
to families in the US$200-US$600 income segment, a grant from
FDLG has assisted building capacity for construction technical
assistance within the Bank, covering a six month pilot and
start-up phase.
Financial institutions that offer in-house construction
assistance can do so in several ways: by adding technical
advisers as a separate service in addition to loan officers; or
by combining the two skills. The former can add to cost, since
the processes of loan application, and the review of technical
building aspects are carried out in parallel by two staff
members. The Bank has opted to combine the two skills. The
advisers have a background in technical drawing and
construction, and have been trained in microcredit analysis.
Other important qualities are knowledge of the local language,
and an understanding of cultural norms. The Bank has also
trained loan officers in the fundamentals of some of the key
aspects of technical assistance to the client, namely the review
of the budget and the building materials; which are verified
against the building plans proposed by the builder. In this way
the loan officers are part of the sales force and can provide
the core advisory services. Technical assistance is classified
according to the complexity of the progressive improvements, and
the type of product e.g. site and services or construction in an
existing plot and also be the type of guarantee. Technical
construction assistance is charged to the client, as part of the
interest rate, and represents one percentage of the loan amount.
All clients receive the following technical assistance:
pre credit site inspection: The site inspection is part of the
due diligence and loan assessment process, to ensure that the
proposed improvement, or land purchase (in the case of sites and
service) is both technically feasible and in function with the
capacity to pay. For progressive housing improvements and new
construction on an existing plot, a detailed plan, or a detailed
sketch of the proposed improvement is prepared. Client
preferences are taken into account, although often the value
added of the technical assistance at this early stage is to help
the client´s decision in giving priority to most urgently needed
improvements to safeguard structurally sound building, over
personal preferences, and, in the case of new construction on an
existing plot, guidance on how to position the unit to allow for
a logical sequence of subsequent additional rooms in the
future. A timetable is prepared, and verified.
a second visit takes places a week after the loan disbursement:
this follow up ensures that the loan has been invested in
housing, that building work is in progress, and/or provides
orientation to the mason, or family members.
a third visit is carried out to verify the building work is
executed according to plan, and provide orientation to the
mason, or family members.
final evaluation is made with the builder and the family.
Business Alliances for providing Housing Loans at Scale
One of the
challenges of housing microfinance is how to generate sufficient
growth to be profitable. Even though some repeat borrowings can
be expected, sustained growth depends on capturing new clients,
expanding to new areas of operation and providing new products.
Reaching scale with housing loans that carry construction
assistance adds an extra dimension of complexity to both scale
and financial sustainability. The Bank's in house capacity with
nine technical advisers can reach 30 new clients per month to
their portfolio, generating some 150 new clients per month, and
each adviser can manage a pool of 300 clients on a roll-on, roll
off basis as new and old clients enter and complete the building
work. The Bank's aims to attend to several, rather a few
thousand clients, annually; according to its business plan
housing micro-loans will represent 15% of the total portfolio in
the next five years.
Housing finance
providers can establish strategic business partnerships with a
variety of construction companies and building materials
suppliers to market housing microfinance. From the outset,
forming business partnerships has been central to G&T
Continental´s housing microfinance strategy. To date,
partnerships have been established with 14 firms; seven land
developers, five large and medium construction companies as well
as the largest cement manufacturer in Guatemala, Cementos
The partnerships have three objectives. First, alliances
with the land developers and construction companies seek to
enhance the ability to reach a larger number of customers
without expanding extensively the Bank´s human resource base.
Training and employing partners' sales force to prequalify
loans and construction projects can provide the Bank with a
steady supply of viable loan requests and cover a wider
geographic area, effectively. In the pilot phase, the
construction companies showed that they could double the number
of clients captured by the Bank, essentially because of their
large network of sales staff.
Second, diversification and new product development;
alliances facilitate offering a wider range of low-cost housing
solutions – land purchase, site and services, construction on
existing individual plot and progressive housing improvements –
than the traditionally limited offerings of completed units by
construction companies.
Third, the Bank's partnership with land developers, local
builders, and building material suppliers create economies of
scale in at least two HMF products – housing improvements and
construction of houses on individual plots. To tackle these two
products at scale will require new hybrid value chains.
Essentially, these partnerships recognize that assembling the
major components for the delivery of affordable housing – land,
infrastructure, services, finance and technologies – demand new
business models for families further down the income pyramid.
G and T Continental has been involved for many years in
mortgage finance so a number of the partner companies have
previously worked with the Bank. Nevertheless, the companies
involved in this new business model are vetted by the Technical
Unit in order to assess top management's commitment to working
with low-income families, and willingness to adopt a methodology
which includes training staff to carry out pre- and post-credit
technical services to customers. For larger companies that have
traditionally built completed units, this implies a significant
shift in working arrangements. The sales staff works within the
communities; their role is more akin to social promoters since
they work closely with the families assisting potential clients
prepare the loan application. As a result of the joint sales
strategy the construction contractors can double the number of
clients per adviser because they generate all the relevant
information from potential clients.
The partners companies' technical staff also offers the
clients the same technical assistance services that the Bank
offers its individual clients. This is possible because the
Bank has trained the construction companies' staff in the
application of a set of standardized formats, which cover:
assessment of housing needs, house layout (in the case of
improvements) and different design options (in the case of new
construction). These are part of the pre-credit process
undertaken irrespective of the housing solution: land purchase,
site and services, and housing improvements.
The Bank's Technical Unit carries out the following checks,
prior to loan approval, during the building work, and post
Assesses the technical and financial quality of the proposal.
Evaluates the adequacy and appropriateness of design, pricing,
quality and suitability of materials according to climatic
Reviews the budget
Assesses the appropriateness of the proposed solution against
low income household needs, checks the plans, building permits
Site inspections one week after loan disbursement and at the
conclusion of the building work.
Prepares technical reports from the site inspection, providing
feedback to the constructor.
The Bank's Technical Unit charges the developer/constructor
for its services including a one-time fee for each approved
design, which goes to cover costs of the Unit. At present, costs
are modest given its small size; by 2009 the number of
professional staff will increase, but to no more that
three-to-five staff, as well as additional technical advisers.
The General Manager expects to reach a breakeven point for
construction technical assistance by 2009.
What are the benefits of the joint sales strategy and the
technical assistance? From the Bank's perspective the technical
assistance in construction services and supervision enhances the
homeowner's satisfaction, increases the market for housing
microfinance by improving the efficiency of home construction,
and shortens the time of progressive building. Loan
applications can be processed more quickly and disbursements
made within three-to-five days of presentation of paperwork.
Hence, business alliances for technical assistance are time
effective. In addition to savings in time and resources and a
greater potential for scale, the General Manager notes that
technical assistance builds customer loyalty.
From the client's perspective, the household enjoys savings
in cost and quality of service. From the perspective of the
developer, the partnership of joint sales and technical
assistance produce a constant flow of clients.
The business alliances also enhance the understanding of
customers' values, and help to create a more tailored product.
Each company offers different housing solutions appropriate to
the various sub-segments of the low/moderate-income housing
market. A more detailed examination of three of the Bank's
partnerships will illustrate this added value.
has been in the land development/home construction business for
12 years and is the largest home builder in Guatemala. According
to the General Manager 1% of all developer constructed homes in
Guatemala have been built by ADPROSA. From its inception the
company has sought to provide options for low/moderate income
families; the first project were homes of US$5,000. It is one
of the key partners in the joint sales strategy with the Bank
for going down market. ADPROSA has taken the lead to date in
building on individual plots – one of the two main housing
credit products financed by the Bank.
This program,
called GUATECASA, is a new concept for ADPROSA because it
recognizes that low income families need flexible solutions that
fit with the different stages of household growth and income.
ADPROSA´s market studies indicated that, especially in the
interior of the country, plot owners have paid for their land
and gradually saved modest amounts for future construction, but
had scant knowledge or access to credit.
Working closely
with local land developers and community leaders ADPROSA´s sales
staff identifies a critical mass of potential clients,
sufficiently concentrated in one area. Clusters of 10 to 15
clients are needed to be viable. Local land developers know the
clients and their credit history. ADPROSA does the paperwork
for loan application, credit screening, technical appraisal and
design options, coordination with local building suppliers and
supervising the building work.
Cost saving
technologies and economies of scale are key factors in reducing
costs and maximizing the loan. Large companies are well placed
to develop products that can reduce the time of building
progressively by using modular prefabricated materials.
However, one of the major limitations of new technology is the
lack of acceptance by customers. In Guatemala, as the rest of
Central America, low-income families prefer reinforced cement
block. Typically a unit of 49 square meters, built in
traditional reinforced concrete block, would take two-to-three
months to construct. By adjusting the internal production
chain, ADPROSA has been able to complete the building work in 28
days. A range of seven house designs is available, from a home
starter module, apt for incremental progressive building to
units of 54, 70, and 116 square meters. Prices range from
US$12,000 to US$15,000 and up to US$20,000.
Sites and
services is a less expensive option for low income families to
obtain a first foothold in the housing market. Historically,
site and services projects throughout Latin America have
typically produced disappointing results, especially under
government programs. ADPROSA offered site and services between
1998-2000, producing more than 6,000 solutions, including land,
water, drainage and electricity, with three walls, in a "U",
leaving the fourth wall to be completed by the family – a basic
solution. ADPROSA has re-initiated its site and services
product within the Bank`s housing micro lending scheme; ADPROSA
has available land throughout the country. Joining a housing
plot with serial micro loans and construction technical
assistance shortens the time necessary to build a unit and
ensures that the home is built to technical specifications. A
revamped new generation of site and services is likely to
respond to low income households where overcrowded conditions
and weak purchasing power persist.
The traditional
core business of large construction companies is to produce
large scale projects. Addressing some of the key challenges
embodied in the housing needs faced in developing countries will
require an assembly line technique to lower cost and improve
quality, applying an approach that combines logistics,
management and technology. Large housing schemes, even when
costs have been reduced to fit the affordability criteria, have
failed on several counts to meet low income people's needs. In
particular, large housing schemes fail to include key amenities
and services that make the resulting projects habitable. Using
economies of scale, (production of 50-60 units per month),
ADPROSA has been able to produce homes that include all basic
utilities (water, drainage, electricity, paved streets) as well
as an impressive range of community services; fully equipped
schools, police station equipped with patrol units, day care
centers, bus stops, recreation space, marketplace with stalls
for small businesses and 24-hour security services. Homes in
these urbanizations are priced between US$12,000-15,000.
Low income
families require flexible solutions and in line with their
capacity to pay that can grow in size according to the different
stages of the household cycle. It is not uncommon for a family
to forgo investments in housing until first securing the
education of children. ADPROSA offers a range of house types
within the same neighborhood – small start up units, at 30
square meters, and two and three room units in which space has
been allocated for small business. The income from home based
business recognized that the home is a productive unit, and the
income generated goes toward the repayment of a housing loan. ADPROSA
also offers a buy-back policy, allowing families whose
purchasing power over time increases and thereby permits them to
move up the housing ladder by buying a new larger unit within
the same neighborhood. Staying in the same location is important
to low-moderate income families who tend to choose to live near
to the place of work, and maintain family and social networks
that are important social capital in times of economic shock
(Moser, 2007).
With rapid
urbanization, the availability of low cost land suitable for
residential use has become the major barrier to housing for the
low income population. According to ADPROSA, currently the cost
of urban land in Guatemala represents 15-20% of the cost of a
house. In 2007, ADPROSA began the first social-interest housing
built vertically; apartments of 49 square meters. ADPROSA aimed
for a technological solution that would reduce construction time
as well as land costs. Using modern construction technologies a
thousand solutions can be produced in six weeks. Each project
includes schools, market, commercial areas, parking, church,
security, and is priced at US$17,000. The goal is to create
communities, close to the city, strategically located near to
places of work.
The business alliance between the Bank and ADPROSA is mutually
beneficial for both partners and this hybrid chain responds to
the needs of various segments of the low income market. From
the Bank perspective, tapping the strong sales force that
ADPROSA can mobilize for marketing housing loans provides a
robust platform for taking housing micro finance and housing
finance products and services for low-moderate income
households to scale effectively and efficiently without
additional costs to the Bank.
ADPROSA`s diverse range of commercial housing solutions
(including land parcels) respond to the price demands of
different sub-markets, including the segment of households with
incomes high enough to jump the frontier between informality and
formality as well as new poor households that need a first
foothold in the housing market. They have been able to package
products for families that already have a plot but lack finance
and a readymade housing solution that is affordable and
expandable. Hence ADPROSA has broken the traditional mould of
limited options above the capacity and willingness of the poor
to pay.
There is mutual interest for both the Bank and ADPROSA to
produce high quality, solutions that with an inclusive technical
assistance approach for clients needs. It will enhance client's
willingness to pay and foster customer loyalty. For ADPROSA a
continual stream of financing of low income clients represents a
sustained volume of business and for the low-moderate households
a greater choice of options for meeting their housing needs.
Cementos Progreso
Cementos Progreso, CEMPRO, is a major family-run company with
over a century in production of cement and building materials
products in Guatemala. CEMPRO began to explore the
possibilities of servicing the BOP market in 2005, and launched
its pilot program, Su Hogar y Progreso program, in
November 2007 in alliance with the Bank. The CEMPRO business
model is based on the premise that this cement
manufacturer/retailer can add value in two areas of the housing
value chain: on the one side, the manufacture and supply of high
quality materials and on the other, by working with the local
informal sector labor force and families in the self build
progressive house construction process.
CEMPRO prospects and identifies clients, screens local
builders, supplies the building materials, provides design
options, and supervises the local builders. Unlike the CEMEX
Patrimonio Hoy program in Mexico, which provides credit in
the form of delivering building materials prior to payment,
CEMPRO does not offer or manage the loan. Rather, it has a team
of 24 promoter/advisers that work in client outreach,
principally facilitating the creditworthiness analysis and
preparation of the loan application for the Bank. According to
CEMPRO, their market studies show that clients are highly
interested in having a house built in less time. The Su
Hogar en Progreso program offers nine design options,
including a house-kit. Two of the designs are for incremental
construction or an initial starter home for extremely poor
CEMPRO has introduced a prefabricated block technology which
preserves the same appearance as traditional concrete block.
The prefabricated model achieves a cost savings of 25-30%,
chiefly as a result of the reduced amount of reinforced steel
required, and the speed of assembly. Construction of a 36 to 44
square-meter unit can be completed in less than two months
instead of three. To date CEMPRO has provided 800 solutions.
The target for 2009 is 3,000 solutions, the breakeven point.
The kit homes were assembled through family labor, with
supervision from CEMPRO staff. However, results from the pilot
phase indicate that more skilled labor is required, since the
process is too complicated for the do-it-yourself builder. CEMPRO
developed a user manual but results were less than expected. It
would seem that manuals are less effective methods for community
education in building skills. In Tamil Nadu, India, the Indian
Association of Savings and Credit offered a course on cost
effective construction methods to its clients. A survey
revealed that only 5% who attended the class incorporated the
course concepts of cost effective methods into their building
methods and thus the class was discontinued.
CEMPRO has concluded that prefabricated systems are
challenging from the construction standpoint in the short term
but promising for large projects in the long-term. For the Bank
the key lesson from the CEMPRO experience is micro loans to
support the formation of small builders companies together with
training and preferably with certification by the Chamber of
Construction would greatly improve the standards of building and
help to close the enormous gap between the informality of the
low income housing market and the formal commercial building
industry, as well as generate employment in the construction
SECORINSA is a small construction company set up in 2007 with
support from the Bank. The general manager has over 30 years of
experience in one of the largest commercial construction firms.
SECORINSA´s business goal is to specialize in progressive
improvements, which represents a massive proportion of the
bottom of the income market. The major challenge in packaging a
product for progressive housing improvements is the
heterogeneity of the types of improvements which limits the
possibilities to standardize solutions – in any one neighborhood
at a particular time, loan requests will cover a multiplicity of
construction activities, the addition of an extra room, a tiled
floor, replacement of a roof, as well as the building processes
of the poorest households that build a wall at a time. SECORINSA
keeps fixed costs to a minimum by maintaining a small core
staff, and works closely with community leaders to identify
clients in a concentrated area to achieve volume. They also uses
local supply chains to obtain favorable rates on building
materials. These suppliers are often small business firms that
are borrowers with the Bank. There are mutual benefits for all,
competitive prices for SECORINSA, which has added value for the
families and increased sales for the suppliers.
In the pilot trial SECORINSA has generated a housing
portfolio of over US $800,000 in new clients, and carried out
150 housing improvements. Although SECORINSA is in the initial
stages of product development (CEMEX reached 75,000 clients
after five years), the joint strategy with the Bank and
SECORINSA may shed light on two traditional problems, how to
manage risk and how to distribute low value, high volume
products for low income families.
The low-income housing products and services that G and T
Continental and its business alliances are bringing to the
market are innovating in several ways
Diversification of housing products that meet the needs of different
sub-segments of the bottom of the income pyramid.
G and T
Continental Bank and its partners show that commercial banks can
assemble packages for housing improvements, sites and services,
and new construction with various price tags ranging from
US$5,000 – US$25,000. As a larger number of financial
institutions and private sector construction companies recognize
the needs of different segments of the low income housing
market, and diversify products for different sub markets, this
would go a significant way in bridging the gap between housing
microfinance and housing finance in general for the poor. Over
time the two markets might merge. The expansion of housing
options at different prices, as a function of the capacity to
pay, is the flexibility that low income families require to
facilitate different entry points to the housing market. Hence
the break with the traditional "one size fits all" mentality for
addressing low income housing is one of the major breakthroughs
both for the construction sector and commercial banks
Joint sales provide a basis for rapid growth.
The joint sales and marketing methods appear to be a cost
effective strategy to reaching a greater number of clients. The
partnership approach recognizes that no one entity has the
ability to provide all the pieces that make up the housing value
chain given the complexity of housing finance outreach, where
closeness to the client is crucial. Marketing housing finance
requires more intensive promotion than traditional microfinance
and may be a factor in explaining why housing microfinance
portfolio size generally is small. Marketing capacities need to
be sufficiently robust to be able to extend to new geographic
areas since the frequency of repeat loans is also much lower
than in microfinance. G and T Continental´s strategy of
alliances with a number of companies is geared to managing scale
and future results will depend to some degree on the internal
capacity of the Bank, to receive and process the volume that
this platform could generate. Appropriate information systems
for managing large numbers of housing transactions including
technical assistance records, still need to be developed.
Provision of technical assistance in construction at scale is set to be
the next key innovation that would revolutionize the quality of
progressive housing improvements. When talking of scale in housing finance circles this almost always
refers to and is synonymous to scale lending. Much less
attention has been given to exploring mechanisms to scale
technical construction assistance services, a key non financial
service. Yet, this article has presented some compelling
evidence which suggests that technical assistance could be one
of the missing links in the housing value chain. Technical
assistance provision not only will impact on the quality of low
income housing, but for the Bank, in the absence of real
collateral it provides tracking for cost recovery and building
client loyalty. The incremental housing process raises a whole
host of technical challenges, and to date most MFIs have chosen
to avoid, yet, the SECORINSA experience suggests that the
formation of small building companies that can offer efficient
technical services for housing improvements and incremental
building has possibilities to help lenders make their way down
the income pyramid, by mitigating some of the perceived risk
inherent in microloans to the informal housing market.
Reaching scale: Likewise, the entry of the construction companies, material suppliers
and cement manufacturers to provide more holistic services shows
promise in both enhancing scale, and the quality of housing for
the poor should continue to improve. Good construction
practices decreases housing costs and increases the value of the
home, which is the key asset of the poor. As the ADPROSA
examples shows, large construction companies have the capacity
to innovate with new technologies which can deliver housing
sooner and cheaper to low income families, and which could go a
long way in expanding solutions for the vast numbers of
potential clients. New technologies at scale are also part of
the housing chain that potentially can tackle the affordability
barrier for moderate income families. In all three cases,
ADPROSA, CEMPRO, and SECORINSA there is evidence of what
Prahalad indicated were some of the principles of business
innovation for the bottom of the pyramid markets – focus on
hybrid solutions and blending old and new technology.
New distribution channels. The expanding number of firms entering the under banked
market with innovative products gives reason to be optimistic
that companies entering this market can meet the needs and
criteria of the low to moderate income families with innovation
and profitably. The financial services industry may be better
placed to reach scale in housing finance through partnerships
than a "stand alone" credit only product. Alliances between
banks and the construction sector, similar to G and T
Continental appear to be the growing trend to meet the market
opportunity of the BOP. CEMEX's Patrimonio Hoy program,
initially provided the loans in materials, but it is now seeking
to work with financial institutions to manage the lending
operations. Mi Banco, Peru works with building material
suppliers, and Holcim, a large international cement company has
partnerships with NGOs and local supplier networks. The growth
of new distribution channels for both loans and housing products
entering the under banked market with appropriate frameworks is
well positioned to provide low-moderate housing on the required
Irene Vance
is Human Settlements Adviser to the Swedish International
Development Cooperation Agency (SIDA) in Central America working
on housing microfinance and urban development programs, as well
as SIDA's Adviser to the CGAP Housing Finance for the Poor
Working Group. Previously she worked for UN Habitat in Bolivia
developing holistic livelihoods approaches through financial and
non financial services for housing in rural and peri-urban
Baydas Mayada
et al, Commercial Bank in Microfinance: New Actors in the
Microfinance World. USAID Monograph. August 1997
Cities Alliance
and Municipality of Sao Paulo.
Estudo de viabilidade de implantacao de um programa de
microcredito habitacional na cidade de Sao Paulo.
investigators: Frederico Celentano and Alex Abiko. October, 2007
Daphnis, Franck and Bruce Ferguson (eds).
Microfinanzas para vivienda, una guia para lo practico,
Habitat para la Humanidad: San Jose, Costa Rica. 2006.
FIDEG. "Reducción de la pobreza y mejora urbana en Nicaragua"Evaluation
Report, PRODEL, Managua, 2006
Martin, Carlos.
Going to Scale with Housing Microfinance: The Role of
Commercial Banks United States Agency for International
Development, USAID MicroReport Number 92. Washington, March
Mesarina, Nino
and Christy Stickney. "Getting Scale in Housing Microfinance: A
Study of ACCION partners in Latin America". Insight. No.
Twenty One ACCION.Boston. May 2007
Caroline. (ed) Chapter Five. "Asset Accumulation Policy and
Poverty Reduction" in Reducing Global Poverty, The Case for
Asset Accumulation. Brookings Institution Press, Washington
Prahalad, C.K.
The Fortune at the Bottom of the Pyramid: Eradicating Poverty
through Profits.
Wharton School.
Publishing Upper Saddle River, New Jersey 2004.
Richard. "Developing Housing Microfinance Products in Central
America" Insight No. Twelve. ACCION. Boston 2004.
Stein, Alfredo
and Irene Vance. "The Role of Housing Finance in addressing the
needs of the urban poor: lesson from Central America" in
Environment and Urbanization, Vol 20 No. One. International
Institute for Environment and Development: London April 2008
United Nations
Development Program, "Chapter One. -- Opportunities for Business
– And for Poor People"in Creating Value for All: Strategies
for Doing Business with the Poor. UNDP New York. July, 2007
Velasco, Osmar,
Marianne Avendaño, Sandra Drummond and Miguel Angel Zea.
Financial Exclusion: The informal Sector and Basic
Infrastructure, Financial Exclusion Informal Sector in
Guatemala, DfID report.
April, 2006
Velasco, Osmar and Tova Solo, La problemática Habitacional El
Desarrollo Comunitario y la Exclusión Financiera en Guatemala
World Bank
Guatemala Country Report:
World Resources
Institute and International Finance Corporation. Chapter 6. "The
Housing Market" in The Next 4 Billion: Market Size in
Business Strategy at the Base of the Pyramid, Washington,
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text:
Courage. The coward within us.
It means everything. Yet, it means nothing.
We fool ourselves into believing that we are brave. But in reality, we are afraid.
Afraid to let go. Afraid to take a step into the unknown.
Afraid to make a change. Afraid to accept it.
Afraid to accept another's point of view, for fear of losing our own.
Afraid of tomorrow… and what it may bring.
Afraid that today might not work out the way we planned.
We base our judgement of today and tomorrow, on happenings in the past.
We are afraid to take a decision… at the same time, we are afraid of the consequences of not taking one.
We claim to be above pettiness, yet we fight inconsequential battles in our minds every day.
We claim that we have planned our futures. Still, we have no clue what tomorrow may bring.
So we wallow, suffer, and stay undecided.
We run from challenges. We avoid decisions. We avoid doing what needs to be done… because we are afraid.
We are cowards.
Yet we claim to be full of courage.
The truly brave know that taking a leap of faith is the only way… for every time a door closes, another one opens.
It is only when destiny and fate push us into a corner, that we realize the many options available to us.
But till we cross that bridge, we live in the illusion of comfort, pacifying ourselves with the motifs and totems of the known and familiar.
Have the courage to break free. Take the leap. Make the change.
Tomorrow will be new, tomorrow will be happy, tomorrow will be an adventure.
Don't worry about whether you are deciding wisely.
For there is no such thing as a right decision, or a wrong decision.
To quote spiritual Guru Deepak Chopra,
"If you obsess over whether you are making the right decision, you are basically assuming that the universe will reward you for one thing and punish you for another.
The universe has no fixed agenda. Once you make any decision, it works around that decision. There is no right or wrong, only a series of possibilities that shift with each thought, feeling, and action that you experience."

subset: commoncrawl


text:
On Campus Interviewing and Presentations
We use Handshake for managing On-campus Recruiting and Presentations
Please review your recruiting information in Handshake (schedules, presentations, and events if applicable) and contact us if we need to make any changes or updates.
Directions, Parking and Hotel
Our Office is located on the main level of the Bausch and Lomb Center (BLC) – Visitors may park in Lot E. Campus Map
Parking: Obtain a Visitor Parking Pass from the Welcome Center booth (WEL) - next to Lot D on the campus map. Then proceed to Lot E.
Campus Directions and Transportation Info
Internet Access
Guest wireless access is available. Please ask when you arrive.
A Career Services Coordinator will be your host for the day and available to have lunch with you. Upon arrival to our office, please complete and return the lunch order by 9:00 am. For payment, please include cash payment of $13.00, or for online payments you may also log onto https://www.rit.edu/emcs/oce/nelnet, pick Employer Lunches-Recruiting. If you prefer to have lunch on your own, there are a number of restaurants available on-campus as well as near RIT.
Recruiting materials can be shipped to my address below:
Bridget Callari Recruiting Coordinator
Rochester Institute of Technology
Career Services & Cooperative Education
Bausch & Lomb Center
57 Lomb Memorial Drive
Rochester, NY 14623-5603
Information Sessions
If you choose to offer Refreshments for your event, the RIT Catering Department is available to provide and set up your refreshment order for your on campus recruiting presentation/visit. You may contact the Catering Department directly for additional assistance or if you have any questions.
RIT Catering
Office Hours: Monday - Friday 8:30 a.m. - 4:30 p.m.
Phone: (585) 475-2346
Email: firstname.lastname@example.com
You may also order from off-campus locations. Places that we have worked with successfully in the past include:
Salvatore's – www.salvatores.com - 585-527-0200
DiBella Subs - http://www.dibellas.com/ - 585-475-1831
Lovin' Cup Bistro - http://lovincup.com/ - 585-292-9940
Job Offer Guidelines and Principles for Ethical Professional Practice
Please Note: we adhere to National Association of Colleges and Employers (NACE) Job Offer Guidelines and Principles for Ethical Professional Practice


text:
For Singles, April Really Is the Cruelest Month
This opinion piece ran in the Washington Post on Sunday, April 11, 2004.
They're the buzzwords in Washington these days: "marriage" and "family values." Of course, we're having a little disagreement over how to define them, what with President Bush's marriage initiative and the proposal for a constitutional amendment to define the institution pitted against the fight for same-sex marriages. Still, underlying these divisions is the belief among all groups that family matters. And so Congress strives, in the tax laws, to promote family values.
Lost in the conversation, meanwhile, is any mention of "singles values." But the choice to be single, whether temporary or permanent, should be accorded the same dignity as the choice to marry, shouldn't it? Including under our tax laws. You'd think that Congress, above all, would be sensitive to the interests of singles, because there are so many of them -- every year, there are more single income tax returns filed than joint ones (58 million vs. 51 million in 2001). But if you viewed single people solely by the way Congress chooses to tax most of them, you might think they were, well, almost un-American. The way they're treated isn't fair, and it should change.
You've all heard about the tax system's so-called marriage penalty, which discourages a couple with good incomes from marrying because their combined income taxes would be greater than if they remained single. Congress heard so much about it that, through legislation in 2001 and 2003, it addressed that problem for most couples by increasing their standard deduction and broadening their tax brackets. But a great injustice remains in our tax system: the "singles penalty." The annual income tax deadline arrives this week, and there's no getting around it -- most of us who are married and also have young kids are going to fare a lot better than most of those who haven't tied the knot or had any children.
Don't know anything about this? Well, you should, especially if you are among those single taxpayers who don't itemize their deductions. That's roughly 80 percent of all singles -- a total of about 48 million individuals, if you're counting. While the singles penalty is harshest on lower- and moderate-income earners, it affects all 48 million. Here's why.
Consider first our nation's official poverty thresholds. The threshold for single people last year was about $9,600; but single people who claim a standard deduction on their 2003 returns are expected to begin to pay a tax if their income exceeds a mere $9,300 -- that is, before what they earn has, by the government's own definition, lifted them out of poverty. (The $9,300 tax threshold results from the sum of the personal exemption plus the standard deduction, and the benefit of a small earned income credit.)
So many singles, with modest incomes and modest expenses, depend on the standard deduction -- a measly $4,750 in 2003 -- because it is larger than the sum of what they might itemize. (By contrast, more than half of all joint returns claim itemized deductions.) These singles include many young people and many seniors, but also nearly all people who earn not a whole lot more than the minimum wage and may work two or even three jobs. Many are renters, but Congress prohibits them from deducting any of their rent, even though it often consumes a disproportionate share of their income.
By contrast, Congress views the $19,000 poverty threshold for a working married couple with two young children and typical child care costs as woefully inadequate for purposes of setting their tax threshold. Congress believes that this couple should not begin to pay a penny of income taxes until its income exceeds $47,700, or about 21/2 times its poverty threshold. (To calculate their tax, subtract $12,200 for four personal exemptions and $9,500 for their standard deduction, which leaves $26,000 of taxable income. Taxes tentatively owed: $3,200. Then subtract their tax credits: $2,000 in child credits ($1,000 for each child) and $1,200 in child care credits ($600 for each child), for a total of $3,200. Taxes finally owed: zero.)
That certainly seems reasonable, so single people shouldn't object. But they have every right to ask Congress: Where's your compassion for us?
To understand the harshness of the tax threshold imposed on most singles, let's consider one who earns $9,600 and see what it's like for her to try to live on that amount. Well, it isn't really $9,600, because 7.65 percent is withheld for Social Security and Medicare taxes, and, thanks to Congress, she has to pay a small income tax. That leaves $8,835, or about $740 a month.
Our taxpayer -- let's call her Meg -- lives by herself in an efficiency apartment, doesn't own a car and takes the bus to work and on personal trips. In a typical American city such as Baltimore or Cleveland, she might get that apartment for $350 to $600 a month. Say her rent is $440, which leaves her with $300 to pay for everything else -- food, clothing, furniture, household and personal supplies, telephone, utilities, laundry, sales taxes, public transportation, and much more. (Heaven forbid she should actually buy a magazine or go to a movie.) Health insurance alone -- she doesn't qualify for Medicaid because she doesn't have a dependent child -- would consume much of the $300, so she goes without it and crosses her fingers. It isn't really a choice anyway: Meg runs out of money before she finishes paying her other bills.
Now consider Fran and Bill, a hypothetical married couple with two preschool children. Both work full-time and earn a combined income of $47,700. We'll assume they pay $7,000 for child care ($30 a day, five days a week), and $3,650 in Social Security and Medicare taxes. This leaves about$37,000 (still nearly twice the poverty threshold), or about $3,100 a month, to pay all other expenses. We don't have to elaborate on the details to reach an obvious conclusion: It's a lot easier, given economies of scale, for Fran and Bill to meet their family's basic living expenses on $3,100 a month than it is for Meg to cover her basic living expenses on $740 a month.
Moreover, at their income level, Fran and Bill are more likely than Meg to receive benefits at work, such as paid health insurance premiums or contributions to a retirement plan, none of which count as income on their tax return. This means that their actual income may be greater than $47,700, yet they still don't owe any income tax. Meg probably has only her $9,600 because jobs at her salary level usually offer no benefits.
If the scandal here were limited to Meg's income tax of $30 on the difference between her $9,300 tax threshold and the $9,600 poverty threshold, our outrage would be limited. But if Congress is going to recognize, as it should, that a family of four needs income far in excess of its poverty threshold before it can afford to pay an income tax, simple tax justice requires that the same principle be extended to a single person. We may debate the income level at which the change should be made, but I believe the starting point of the discussion should be no less than $1,200 to $1,500 a month ($14,400 to $18,000 a year), from which the federal government will subtract 7.65 percent for Social Security and Medicare taxes. With these new thresholds, we're talking about roughly 8 million to 11 million additional single people who would be protected from being taxed; and in their cases, the tax savings would range from a few hundred dollars to more than $1,000 a year -- amounts vitally important to them.
But I would go further. The injustice is not limited to singles who should be spared paying any tax. The initial tax threshold for all singles, including those with higher incomes, should be set so that not one of them pays a tax until their income exceeds a level we regard as necessary to meet basic living expenses. This is what Congress does for that family of four; this is what voters should insist it do for the household of one. Until that time, the great majority of singles in this country can legitimately argue that, at least for tax purposes, they are treated like second-class citizens.
Singles know this is a big election year. They also should know that, in the past, they have had a poor voting record, which no doubt goes far toward explaining their treatment under the tax laws. If singles were to let their candidates for Congress and the White House know that they are going to vote in droves this year, and that they expect to vote for candidates who promise to fix these tax injustices, I'm betting plenty of those candidates would listen up.


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Design is a vital part of our everyday lives. It is found everywhere we look. The food which we eat, the clothes which we wear, the smartphones which we use, and the vehicles which we drive – each and every one of these products went through years and years of painstaking and immaculate design. In the world of publishing and advertising design, graphic design brings order and meaning to otherwise random combinations of text and photos. Advertisements, books, newspapers and …Read more
How to Develop Awe Inspiring Annual Reports
Calling all Corp Comms and PR professionals! The time has come for you to start thinking about your organisation's Annual Report. Considered by corporate chieftains to be the most significant report card in an organisation, an annual report is usually a necessity for most public listed companies and government agencies. Anatomy of an Annual Report Typically, most annual reports or ARs document key milestones in the organisation. They include the following sections: Chairman and CEO speeches highlighting the most important …Read more
How to Create an Eye-Catching Infographic
Source: blog.lab42.com Infographics are the go-to tool for the digital age. Combining facts, figures and visuals, they enliven any piece of online or offline content. Once you've decided to spice things up and create an infographic for your next board meeting – or a presentation, blog post, report, or anything else for that matter – approach it with a solitary aim of making it completely exquisite. Notice I didn't say beautiful. I have nothing against beauty. I do …Read more


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After thrashing Bangor City 6-0, last weekend, Craig Harrison refused to accept that the title race is over.
The Director of Football at The New Saints watched his side extend the gap at the top of the Corbett Sports Welsh Premier League to 13 points and admitted that 'The title is not won until it's won.'
The former Middlesbrough defender added, 'I am a winner. I want to win football games. I want to win at anything I get involved in and I am a very bad loser! I hope my mentality rubs off on the lads and it is important to remember that as soon as you take your foot off the accelerator, you will get your comeuppance!'
Harrison, who joined The Saints in December 2011, revealed that the best advice he was ever given was, 'Play the game and never the occasion! Nothing changes, there is still a pitch, still two goals, still 22 players and you still get three points for a win. In big games there are nerves but it is important to stay focused.'
The New Saints of Oswestry Town are on course for a domestic double again this season and the 35 year old admitted that he would be delighted, 'I would be over the moon to win the double but I would still be thinking it could have been a treble.'
Craig also reserved special praise for his captain, Paul Harrison, 'For me Paul is the best goalkeeper in the league! He spends long periods of time doing nothing and then he makes important saves. He has been wonderful all season. His concentration levels and his experience are fantastic.' He went on to say that, 'There are not many players out there that have nothing to do in a game, but when they are called upon, they are faultless!'


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Linda Emmons
Miami Palmetto High Class of 1975
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From my Closet to Yours.
28 comments
That's awesome, can't wait to check it out. x)ReplyDelete
I think that is great of you to not only offer your items online (finally LOL) but also offering to work w/people if they can't afford....you're the best!ReplyDelete
Also, I want you to check out my accessories boutique and let me know what you think. www.chiccravings.com.
yay for your new shop! love the shoes you added :)ReplyDelete
Awesome shop Delmy! xoxoReplyDelete
Am checking it out rite now... :PReplyDelete
Just found your blog and LOVE IT! Also you may wish to check out my 'Best 25 Blogs of 2009' here: http://www.cricketwife.com/2010/01/25-best-blogs-of-2009-part-1.htmlReplyDelete
GREAT SHOP DELMY...ReplyDelete
WOW! What a great news! :-)ReplyDelete
- GalaeciaJanuary 7, 2010 at 3:43 AM
Oye! Hablas español??ReplyDelete
Great shop! If only I was a US 8.ReplyDelete
Ur such a sweetheart! Luv ur shop!! Good Luck : ) xxReplyDelete
Leslee: Thanks!!ReplyDelete
Tracy: Will check it out! Thanks!
Jen: Thank you Jen!
Galaecia: Si, hablo Espanol!
Thank you all for the support! XO
Best shoes ever! Wow. Thanks for the link. :)ReplyDelete
Too bad our shoe sizes are different! :(ReplyDelete
Good for you though! Pray your business is very profitable... Blessings!
Oh I've always been in love with your shoes!And your outfits for spring are to die for!I read and loved your interview and I guess you're even sweeter and awesome that I thought before!ReplyDelete
woo! we are the same size perfect but i want your everyday aldo pumps i love i have been hunting for those hopefully soon i find them and all your jackets please. :)ReplyDelete
love ur fashion blog! please follow n read mines too!ReplyDelete
Darn, my feet are too little for your shoes! I'm sure you'll sell all of them, though, since they're gorgeous.ReplyDelete
Wish I could buy something but I'm from Polaaand and it would be too expansive to get it from USA:(ReplyDelete
- AnonymousJanuary 8, 2010 at 11:06 AM
Hi, I'm back. Hopefully third times the charm. It just came to me that I wrote wrong proof in my last comment. Over my head. Good late morning.ReplyDelete
wow, you have alot of shoes :)ReplyDelete
Goodluck delmy! I'm sure you will do well with your storeReplyDelete
oooo...i wanted those colin stuart booties when i saw them on you! and they are my size, but i put myself on a strict shopping diet after the holidays :-(ReplyDelete
check out my bigcartel site! http://simplychic.bigcartel.com/
i'm adding a few more items before i post it on my blog, but i figured it wouldn't hurt to share it here :)
OMG! I love the idea! :) Good for you darling!ReplyDelete
If you ever sell non leather shoes plz let me know. I quit wearing leather about a month ago, and it's so hard to find gorgeous non leather shoes here in TO. Oh, by the way I'm coming to New York next month, maybe we can meet up? :)
- AnonymousJanuary 11, 2010 at 2:23 AM
i love itReplyDelete
good ideia
hey...great stuff!ReplyDelete
i'd like to know, what shoe size r u?
Oh wht a nice blog...ReplyDelete
here is some nice and important information about Fly London Shoes that they are launching the new styles of fashionable shoes..
u can get the best style..
For more information visit the site
From my Closet to YoursReplyDelete
Love your closet, and thus I thank you for sharing it with others that are also totally captivated by your style. Thanks.
Cathy@blood pressure gauge


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Wealth management firms in Asia are not fully supporting the technology and service requirements of their advisors and high net worth clients.
This was the conclusion of a new research, 'Future Advisor Asia', undertaken by wealth industry expert Scorpio Partnership on behalf of SunGard.
According to the research, this potentially impacts service capability and client confidence.
The research examines how Asia's wealth management sector is meeting the changing needs of the region's growing high net worth clients.
The research, which surveyed* over 400 high net worth individuals and 96 wealth advisors and senior managers in mainland China, Hong Kong, Singapore, the Philippines and Indonesia, examined current wealth management industry challenges, the role of digital channels in high net worth client management and the future role of the advisor.
The research revealed that Asia's advisors are taking technology into their own hands: A significant percentage of advisors are using iPads and other tablets for presentations (51%), investment research (46%) and portfolio analysis (41%) to help meet client demands 'on the go'.
It also noted that Asia's millionaires are also increasingly empowering themselves through digital channels. On average, HNWI's spend 5.3 hours online per week regarding financial matters and the demand for financial apps is on the rise. When investors predict their usage patterns in five years' time, they expect the largest increase to be their online interaction directly with their financial institution on matters related to their wealth.
Client servicing is slipping as a priority: The average advisor is spending less than 40% of time on client-facing activities and just 12% on prospecting. Too much time spent on administrative tasks is interfering with focusing on customer relations.
Knowledge of the client is also lacking: Despite spending less than half their time on direct client servicing, 88% of advisors believe they have a good understanding of their clients' overall wealth and manage approximately 38% of their clients' portfolio. In contrast, the client responses indicated advisors have a very poor level of knowledge and often manage much less than the stated 38%.
Furhtermore, while investors consider their wealth managers to be relatively solid value for the money, the industry has a much higher opinion of its own value. 62% of advisors ranked their services as either good or excellent value against a lower number of investors on the service value of international (44%) and local (43%) wealth managers ranking their services as good or very good. This points to a perception gap between high net worth clients and wealth advisors.
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Hedwin Liner Business Sale Announcement
May 1, 2017
Dear valued customer,
Thank you for your ongoing partnership with the Hedwin Division of Zacros America.
Today we announce the pending sale of our liner business – including PAYLINER®, HEDLINER®, WINLINER® and TOPLINER® products and their related accessories to CDF Corporation.
CDF has been a premier manufacturer of drum and pail liners for several decades, and understands the market needs and applications for our products. We feel that the quality of the liner products and technologies invented, improved and/or sold by Hedwin Division of Zacros America will be well served by CDF Corporation, an established provider in the market.
After the closing of the transaction, CDF will be your ongoing source for the drum and pail liner products mentioned above. We anticipate that the transition to CDF will take place in early June.
We at the Hedwin Division of Zacros America are committed to ensuring a smooth transition to CDF, and will work diligently to meet your needs and requirements. Representatives from both the Hedwin Division of Zacros America and CDF Corporation will be contacting you to begin turnover activities in the near future.
Until the closing, the Hedwin Division of Zacros America will continue to service your account.
Following the closing of the pending sale of our liner business all order and service inquiries for liner products should be directed to the Customer Service team at CDF:
CDF Corporation
77 Industrial Park Rd
Plymouth, MA 02360
Drum & Pail Division
Customer Service Team
508.591.6700 • 888.593.2211
The Hedwin Division of Zacros America looks forward to shaping our future with a narrow focus on our patented CUBITAINER® flexible packaging products and processes, to improve upon the unparalleled value and durability of our flagship product while leveraging the power of the entire Fujimori Kogyo Ltd., and Zacros organization to perfect it.
If you have any questions or need any additional information, please feel free to contact our customer service department at [email protected] or 800.890.1183 option 4.
Very truly yours,
Yasuo Iwasa
President of Hedwin Division of Zacros America Inc.
Executive Vice-President of Zacros America Inc.
Joe Sullivan
CDF Corporation
*CUBITAINER®, HEDLINER®, WINLINER®, PAYLINER®, and TOPLINER® are registered trademarks of Zacros America Inc.


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With so much insanity in the world and the news highlighting TOO much of it, I encourage each of you to think about what you are grateful for every day. Here is my short list. My wife, family, my friends, Will Keim who has so far kept his cancer at bay-keep it up my friend, my cousins who I love and cherish deeply for the memories and for what lies ahead, my health as I continue to play hockey, backpack, kayak, fish, play guitar, and for my memories of my mom who I miss. There are many more. … [Read more...]
The 130 mile backpacking trip I am not on.
Sunday, July 12 My calendar pops up, "depart for Sacramento / PCT hike". Rees, Howard, and I have been picking away at the Pacific Crest Trail (2650 miles) since 1981 when we hike 400 miles of the stretch in Washington state. Since then, we've done mostly 110-130 mile hikes over the years. In 2012 we hiked 200 miles where the John Muir trail combines with PCT in California. I broke my ankle in March and had to cancel. … [Read more...]
Flat Kate visits Maine
My niece's daughter, Kate, who lives in Minnesota had a class project after reading Flat Stanley to draw herself on a piece of paper and mail herself to Maine. My job was to introduce her to the great state of Maine taking pictures, purchasing artifacts / memorabilia and generally showing her around. Well..... I got into it. Taking her to my Career Development Facilitator (CDF) class one day for presentations, showing her the State Capital, letting her ride some lobsters, and stopping by the … [Read more...]
Mt. St. Helens – a year after it erupted
A special "shout out" to the Wagar Middle School in Carleton Michigan learning about Mt. St. Helens. I had just moved to Seattle in January of 1980 and that summer Mt. St. Helens was in the news all the time. It was becoming active and the geologists were predicting it could blow anytime. I lived in Seattle about 90 north of the mountain. On a clear day I could see it from my apartment window.. I was hiking in the Cascade Mountains roughly 110-120 miles north of St. Helens when it … [Read more...]


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City Market Considers Expansion in Burlington's Old North End
Burlington, VT – Burlington's community-owned food cooperative is considering expansion into the city's Old North End. For many years, Members have asked the Co-op to open a City Market in this area of town that's part of the Co-op's over 43-year history.
The auto parts store located at 242-244 North Winooski Avenue (next to the Central Market and across from the McClure Multigenerational Center) closed several months back and the property is currently for lease. This spring, City Market worked with a consultant to forecast potential sales for a Co-op at this location and has been working closely with Redstone, who recently purchased the building.
City Market has tentatively signed a lease agreement with Redstone on this space. This agreement gives City Market's management team until October 24, 2016 to conduct some additional due diligence before committing to the full term of the lease. The space at 242-244 North Winooski Avenue includes 6,000 square feet upstairs with an additional 6,000 square feet in the basement and a 2,000 square foot outbuilding. If City Market were to move forward with this location, they anticipate opening as early as the fall of 2017, following the planned grand opening of the South End store.
City Market's General Manager, John Tashiro, shares his excitement for this potential next phase of expansion. "Our Members have been clear that they'd like us to have a presence in Burlington's Old North End and we're eager to complete our due diligence on this new location. Redstone has been a great partner in the process of exploring how this location could be beneficial to our Members. They've also been responsive to our need for a flexible timeline, given all the current work we're doing on our South End plans as well."


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Games are very interesting, earlier only children used to play many adventurous and amazing games, but in this technical era, from children to adults everyone is addicted to games, because these incredible games which are available in the app stores are entertaining, it can be relaxing, it drives you to a fantasy world where everything is possible, these games are so addictive. Before, the games which were, developed and released were so nonsensical, so people had this thought that games were only for children. But today, the entertaining interface of the games has hauled many people including adults. And these games are so addictive.
There are numerous numbers of games and apps available on app stores which are for free of cost, they very easily accessible, these amazing games are surreal the animations, the graphics, the game characters, the exciting game levels, and the attractive interface everything about these games is fantastic. They look so real, the games are very creative and it is developed in a manner that every game level of a particular game becomes harder; this increases the excitement level of the users with each level. Many such fantabulous games have become very popular; there are millions of users who download these games every day.
Jetpack Joyride Apk V5.0.1 For Android 2019
The most brilliant game
Many people love arcade games, this genre of game has been people's favorite, in the recent times these games have addicted many, and they are temple run, fruit ninja, mine craft, angry birds and even more mind-blowing games. Jetpack Joyride is one of the games which are loved by many, billions of users download this entertaining app. Jetpack Joyride has been very famous since its release.
One of the most excellent games which are in trend these days is, JetPack joy ride, the entire concept of this game is very interesting, the storyline of this game is very adventurous, it is a game about escaping from a lab after stealing a jetpack, you have many actions such as running, shooting, jumping, this game is very electrifying. You can download this game through apk file. Must read, Game hacking apps.
Amazing facts about jetpack joyride
- This app is available for free cost; you can download the APK file without any charges.
- The developer of this amazing app has already designed other fantastic games such as fruit ninja and many other famous games, the developer is known as Halfbrick studios.
- This incredible app is one of the most loved games and it is a top rated game, the ratings of this app are known to be 4.4 out of 5. Many games do not get these much ratings; jetpack joyride is a very reliable and trustworthy app.
- This jetpack joyride was developed and introduced on Nov 2016; the apk file of this app is available from the release of the game.
- More than 1 billion users download this amazing app, and many have rated this as the most excellent game. More than 5 billion users have accessed this app.
- The average rating of this app is 5 out of 5.
Superlative features of jetpack joyride
- One of the most superior features of this game is that this game supports many operating systems.
- This amazing game is compatible and supportive on many devices such as Android phones, Ios devices, tablets and pc.
- Jetpack Joyride is available for many Android device versions, the latest version of this apk file is v1.10.12, and this latest version has a lot of interesting new updates. This apk file can be downloaded by many Android devices.
- Jetpack joyride app only consumes less space on of your mobile memory, the exact memory consumption of this app 96.2 MB.
- The last update of this app was on July 2018, the maximum android version which is compatible with this game is 4.4 jelly bean android versions.
Some of the great feature of jetpack joyride
- The interface of this trending game is very attractive, the visual effects, graphics, animations, the clarity of the picture, the amazing levels, the celebrated game characters these all elements are very eye-catching.
- The apk file for this game is very easy to download, and you don't have to pay any extra charges for installation.
- The sound quality of this app is very brilliant, there are many action scenes available in the game like shooting, and jumping and flying, the amazing sound effects of this app makes the game even more adventurous.
How to install Jetpack joy ride APK file
- You can download the apk file of this app from its official website, in-app store this not available, the official website of this game is very consistent and trustworthy, so click on "download the apk" file from this link.
- In Android devices for the installation process, you may have to change from phone setting, go to security setting and by enabling download from "unknown sources" you can install this app on your device.
- Now you are ready to use this app.
By following these three simple steps you can download the most trending jetpack joyride game.


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About Us
The M56 Group is an independent operator specialised in managing tourist sites in France and internationally.
The Group manages 4 exceptional panoramic observatories: the 56th floor of the Montparnasse Tower and its panoramic terrace in the heart of Paris; the Berlin TV Tower, a monument recognised throughout Germany; 360 Chicago in Illinois; and One Liberty Observation Deck in Philadelphia, Pennsylvania, both of which are well known in the United States.
In addition, the group owns and manages La Ferme Aux Crocodiles, an animal park in the south of France.
M56's sites are designed to be key tourist destinations that fit into the cultural landscape of the cities in which they are located.
Each visit to one of our sites is an immersion in fun, discovery and learning.
"A must-see. Incredible views and an unforgettable experience!"
(TripAdvisor / Berlin TV Tower)
M56 Group's mission is to totally immerse these visitors, delighting them and teaching them more about the city and its culture and unique history.
"Best place I visited in Philadelphia. Incredible panoramas and very attentive staff. I was able to learn so much about the city."
(TripAdvisor / One liberty Observation Deck)
Throughout their tour, visitors are invited to enrich their experience through interactive exhibits and also to expand their knowledge through stories about the city, allowing them to appreciate its many facets.
"The most beautiful view of Paris. A memorable experience, a view that takes your breath away. My favourite memory from Paris."
(TripAdvisor / Montparnasse Tower Panoramic Observation Deck)
La Ferme aux Crocodiles is filled with more than 400 residents and 30 different species. It offers the entire family a unique immersion in the world of reptiles, along with entertaining and educational experiences. The site also has a support system for scientific research and animal species conservation and participates in protecting endangered species like the Ganges Gharial and the albino crocodile.
"A fantastic place for little ones and grown-ups. Incredible animals, very beautiful conservatories and tours full of information and panoramic viewpoints. An awesome place!"
(TripAdvisor / The Crocodile Farm)
Because of the places they embody and the emotions they inspire, M56's sites are must-see tourist destinations. Each year, we are proud to welcome more than 3 million visitors, giving them unforgettable memories.
"Incredible view and guaranteed thrills! The view is superb because you can see Lake Michigan so clearly. The view over the rest of the city is breathtaking. The Tilt is a great attraction for people who love excitement."
(TripAdvisor / 360 Chicago)