Catalytic Capital in Action: MicroBuild Fund
This case study was written by the Catalytic Capital Consortium (C3), an investment, learning, and market development initiative by the MacArthur Foundation, Rockefeller Foundation, and Omidyar Network, which brings together leading impact investors to encourage greater impact and use of catalytic capital.
Improving Housing for 685,000 People
Traditionally, microfinance institutions (MFIs) have not offered loans for housing finance in developing countries, where two-thirds of the population live in substandard housing without a formal title. Most MFIs lack the institutional expertise and strategic financing to expand beyond microenterprise loans and invest in housing. MicroBuild Fund was created by Habitat for Humanity in 2012 as the first housing-focused microfinance investment vehicle dedicated to helping low-income families improve their housing conditions and strengthen their tenure security.
Managed by Triple Jump, the $100 million revolving loan fund, which has a $10 million technical assistance sidecar, supplies capital to MFIs to enable families to build safe, decent, and durable homes. A $2 million PRI* provided early equity seed funding and first-loss capital, which helped unlock significant additional investment from public and private entities.
MicroBuild has grown rapidly and provided improved housing for more than 685,000 people, of which 73 percent are women, and 68 percent are rural borrowers. The fund has approved more than $124.6 million in financing for 54 MFIs in 30 countries, with a leverage multiplier of 3.71 times invested capital. The number of MFIs offering housing microfinance has also increased dramatically, realizing MicroBuild’s proof-of-concept mission.
Catalytic Capital Investment
$2 million Omidyar Network PRI*; $8 million of additional equity from Habitat for Humanity, Triple Jump, and MetLife; $90 million of debt from OPIC. $10 million of equity was leveraged 10 times to create a $100 million fund.
Ongoing investment activity; fund is profitable seven years into its 10-year closed-end fund period.