UN-HABITAT is providing loans to affordable, social housing and infrastructure projects through a Revolving Housing Finance Loan Fund Programme called ERSO (Experimental Reimbursable Seeding Operations). Working with local banks and microfinance institutions and non-governmental organizations in Palestine, Tanzania, Uganda, Nicaragua, Belize, Nepal and Lao PDR, ERSO finances land development planning, affordable and social housing construction and takeout micro mortgage and microfinance housing loans. We leverage our funds by working with international financial institutions and public-private partnerships. We can assist domestic banks and micro-finance institutions to access lower cost, longer term funds. And we bring local banks and community groups together to create bankable social lending and community development programmes.

This experimental programme is designed to become a self-sustaining revolving loan fund which will balance three types of lending to expand housing finance markets globally:

1. Construction of new affordable housing units (reaching low-income salaried workers such as teachers, nurses, police and government workers, industrial sector workers), particularly in regions where there is a severe shortage of affordable housing stock;
2. Lead investments in microfinance/infrastructure/microfinance housing loan institution initiatives to create secondary finance programmes and access capital markets, and;
3. Very low-cost loans to allow early stage microfinance housing programs to grow to sustainable size.

The revolving loan fund is a highly effective tool to reach underserved populations from the 30^th down to the 85^th income percentiles. It combines well with and is highly complementary to our Local Finance Facility approach, reaching populations from the 70^th income percentile to the bottom of the pyramid.