Research Reports and Evaluations - Page 10

2 Extending principles of microfinance to private rental support The WCC Housing Brokerage model brings together elements from microfinance and Private Rental Support Programs with flexible brokerage funds matched with support to assist with access to the private rental market and to help sustain tenancies. This section briefly reviews the emerging evidence base on both combined elements. There is limited peer reviewed literature on the effectiveness of microfinance and private rental support programs, with much of the evidence base confined to practice reports. 2.1 Microfinance as a pathway to financial inclusion continue to access pay day lenders as they provide a quick solution to urgent financial needs (Lee 2014). Microfinance is an alternative source of credit for low income households to assist with the purchase of essential household items and with the transition out of poverty through the funding of self-enterprise. While various models of microfinance have evolved to reflect local needs and conditions, the main distinction of microfinance from mainstream and fringe finance is the provision of loans for small sums of money with very low to zero interest. Although the evidence base on microfinance is still emerging, there is some indication of its effectiveness as a viable alternative to pay day and other high risk loans. The broader microfinance literature reviewed suggest that, for the most part, households are able to manage their repayments provided the loan is flexible, well governed, and that they are based on no to low interest. The positive impact of microfinance is greatest when it is combined with other forms of assistance and education that aim to build financial literacy, provides practical and emotional support (Mouy 2010; Brackertz, 2012; Becchettia & Conzoa 2013; Centre Social impact 2014). Microfinance loans are typically less tha