Values-based banks aim to build an inclusive financial system that responds to the needs of everyone and not just a few. This is reflected intangible activity, such as focusing on providing financial services for disadvantaged or excluded groups. It is also reflected in the way these banks engage and include others in their relationships with clients, shareholders and other stakeholders.
In 2010, Paraguay had a shortage of 1,000,000 homes. As a result, access to finance for housing and the ability to make home improvements was out of reach for many. That same year and in response to the housing deficit, Visión Banco, a values-based bank in Paraguay, launched a long-term financing product to improve the housing conditions of low-income micro-entrepreneurs. They partnered with Habitat for Humanity – an international non-profit that provides affordable, high-quality housing solutions for low-income people. Together, they created a product for long-term finance for low-income housing.
The initial stages were challenging, considering the segment of the population they were targeting already had difficulties gaining access to credit. It required Visión Banco not only to develop a product but also to complement it with financial education; therefore, an internally trained specialised team to market, promote and execute the sale and support of the product was essential.
Fundamental to the success of the initiative was Visión Banco’s experience in adjusting its products to meet the needs of the people and its alliance with key stakeholders. Habitat for Humanity helped to consolidate the process, and the Inter-American Development Bank (IDB) approved a partial-credit guarantee, an essential component in expanding the Bank’s loan offering. In doing so, Visión Banco broke a nationwide paradigm that the state was the only one responsible for housing.
Over 1,500 homes were built or improved using the “constructing dreams” product launched by Visión Banco. The product has been recognised as one of the best initiatives by the Latin American Green Awards of 2016 (Premios Latinoamérica Verde). Following the success of the product, the state has encouraged more access to housing by allocating more funds toward long-term financing.
