LOW INCOME HOUSING GUARANTY PROGRAM

Evaluation covers the period 4/79-6/80 and is based on site visits, interviews with participating agency personnel, and financial and sociocultural analyses. The project has been very successful in meeting its objectives. Electrical, water, and sewer connections and construction of core units have exceeded projected totals, reaching a total of 22,423 families. The Peruvian Housing Bank (BVP), the implementing agency, is clearly capable of providing basic infrastructure affordable by the urban poor. BVP has been much less successful, however, in providing home improvement loans, having made only 53 of a planned 540. This shortfall has been caused in part by inadequate financial/human resources and uncertainty about the program"s potential. Project implementation on the whole has been obstructed by Peru"s declining economy, which has led to an 80% inflation rate, delays in delivering construction supplies, and increased down payments and interest rates. A change in BVP management also delayed implementation. The project completion date has been extended to 2/81, during which time these problems will be addressed. BVP has appointed a high-level coordinator to oversee project implementation, and additional funds are being programmed for this and future housing guaranty projects (HG"s). It is recommended that BVP: (1) establish procedures for applying the median income test for beneficiaries; (2) recover costs more rapidly and provide better information on delinquencies; (3) avoid prolonging the construction phase in future HG"s; (4) shorten the internal project approval process; (5) establish an interagency coordinating committee to expedite implementation; (6) create a promotion and development department to help community groups obtain financing; and (7) institutionalize the evaluation process. The Government of Peru should create an interagency committee to lower construction costs. Finally, AID/W should establish a mechanism to share information with HG countries on low-income shelter programs.