Productive credit to solve housing problems

Social impact businesses can be the solution to housing-related problems in Brazil and the world. Good Finance is a social impact fintech that is also on that boat. Follow the text below to better understand.

The right to housing has been a fundamental human right since 1948 when the Universal Declaration of Human Rights was written. Having a home to live in is the basis for living a dignified life.

Through the Housingpact Program, developed by the Impact hub São Paulo, social impact businesses, linked to the housing sector for low-income populations, have joined together in a network. The objective is to develop the power of these solutions, together with companies in the civil construction sector. The group is united to solve problems related to homelessness, basic sanitation, and waste disposal.

The problems we’re dealing with

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About 33 million Brazilians have nowhere to live, according to a report by the United Nations Program for Human Settlements. Homelessness increases the number of invasions/occupations and the slum population – the index reached 11.4 million, according to the 2010 IBGE Census.

The country has 57 million households without access to the sewage network, 24 million without running water and 15 million without garbage collection, according to data from the National Household Sample Survey of 2018, from IBGE.

In addition, in 2018, Brazil produced an average of 79 million tons of waste per year, of which 72.7 million were collected. However, more than 40% of these residues did not receive an adequate destination. The selective collection is far from universal and we are the 4th largest producer of plastic waste in the world. The recycling rates are quite incipient and have little evolution.

For the social entrepreneur where there is a problem, there is an opportunity. That is why the connections between different social impact businesses are so important. One organization complements the other and complex problems have increasingly clear solutions.

What is Good Finance?

What is Good Finance?

Good Finance is a collective lending platform (P2P lending), focused exclusively on microcredit financing for low-income entrepreneurs. Through their own risk analysis process, entrepreneurs are selected and, on the other hand, individuals can invest values ​​starting at R $ 25 and have the money back with profitability above 200% of the CDI. Thus, Good Finance multiplies opportunities for those most in need of financial sustainability and also promotes access to conscious investments.

Good Finance was selected to join Housingpact with a clear objective: to facilitate access to credit for people and initiatives that solve housing problems and promote, at the same time, the increase in income and job creation of less favored populations.

From the improvement of the individual’s financial health, he will have better conditions to invest in improvements in his residence.

How does Good Finance help solve housing problems?

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An example that is already in practice is the partnership between Repagina.me and Good Finance. The first develops architectural projects and performs the renovation of commercial spaces at affordable prices. The second analyzes the profile of the entrepreneur, the financial health of his business and captures the investment necessary for the reform to happen. More healthy and pleasant places in the eyes of customers are created.

In addition to financing individual entrepreneurs, Good Finance is developing processes to serve customers of so-called microfranchises. These are business franchises that do not require an initial investment greater than R $ 25 thousand and may start from just R $ 5,000. The objective is to make a micro-franchise of ecopoints viable.

First, the entrepreneur raises the necessary funds for investment through the Good Finance platform. Then he is trained in the production chain for the disposal of recyclable waste and becomes a Collecting franchisee, with an ecopoint under his responsibility.

Neighborhood residents take their recyclable waste to the site and exchange it for cash, deposited on a prepaid card made available on the spot. Thus occurs the correct disposal of waste, the generation of income and bank inclusion. Then the franchisee resells the materials to cooperatives, thus contributing to the sustainability of the material’s life cycle, generating income and employment at the same time.

For Good Finance, the main key to unlocking the transformation in the world and reducing social inequality is the incentive to entrepreneurship. The incentive through the adaptation of financial products for populations that historically have fewer opportunities. Fair credit is the first tool to be adopted by the startup. The first of many.

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