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Rural Housing Loan Program

for Low Income Families

Scattered Island wide

National Housing Development Authority

Sir Chittampalam A Gardiner Mawatha, Colombo 02
Tel:011- 2446180 /Fax: 011 - 2320058

Ministry of Housing and construction

2nd floor, “Sethsiripaya” Battaramulla
Tel: 011 – 2862225 / Fax: 011 – 2864765 / email: plan@houseconmin.gov.lk

1. Project Title : Rural Housing Loan Program for Low-Income Families Scattered
Island wide

2. Sector : Housing

3. Project Location : This Housing Development Program will be implemented in

all DS Divisions of the country.

3. 1.Specify the Project Location

Site Province District Division Location

1 09provinces 25 districts 331 DS Approximately 20,000
divisions locations

3.2. What is the total area of land required for the project? :

Scattered loan program for low income families will be implemented based on the
land availability of the beneficiaries. Therefore, land required is not relevant with the

3.3. Please state the cost of land if it is to be purchased? : Nil

As per 3.2 land cost in not relevant

4. Rationale of Project:

4.1–General sector information:

The housing survey conducted by the Ministry of Housing and Construction with the
support of local administration revealed that 166,527 homeless families who are having
possessed a plot of land and another 385,912 partly completed houses are awaiting for the
assistance to realize their dream of living in an own decent house. These identified
beneficiaries basically represents low income segment of the society and also scattered
island-wide. Since most of the homeless families, even though they have a plot of land,
are not having clear deeds or titles in order to ensure easy access to the available loan
schemes. Further they don't have certified income and unable to produce guarantees.
Therefore this project aims to support these two groups with a soft loan scheme to realize
their dream and make them comfortable in the socioeconomic environment of the country.

4.2. Project Objectives:

- To motivate and mobilize 20,000 low income families in order to build or upgrade their
homes. The loan amount for each family for new houses is Rs.500,000 and Rs.250,000
for upgrading houses.
- To increase the housing stock by 10,000 and contribute for upgrading another 10,000
housing units.
- Strengthening the assets base of the people through housing development process.
- To uplift the living standard of the low income families.

4.3 Specific problem to be addressed by the project:

- To help low income families financially and technically to build up their own house or
upgrade their existing house.

4.4 Mode of intervention in terms of this project

All district offices of the NHDA are fully mobilized to achieve main and specific
objectives of the project. District Managers, with the support of respective Divisional
Housing Committees, involve in the whole construction process; however, the beneficiaries
are mobilized to allocate their labor and maximum potential in order to complete the
project with having sense of ownership with them.
Financial Loan consists of a mobilization advance to be paid at the beginning and the
balance payment consist of installments to be released based on the need and the technical
recommendations provided on the physical progress.
The maximum period of construction for each house will be less than 6 months.
NHDA provides Rs.500,000/- as a loan in concessionary terms for a new house and
Rs.250,000/- for an upgrading house.
Participation and partnership methodology throughout the construction process and the
social empowerment of the people are fundamental.
Throughout the construction processes NHDA provides technical support with free of
charge. NHDA maintains an adequate number of technical officers for the purpose.

Selection of beneficiaries –
Both homeless families with having plot of land suitable for building a house and the
families with partly developed houses are selected for this project. Beneficiaries must be
entitled to the low-income segment of the society.
Selection process will be done by Divisional Housing Committees which comprises of
respective Divisional Secretary, District Manager of NHDA, Housing Officer and the Land
Officer will ensure the fair and transparent process of selection. Most importantly the
“Gemi Niwasa Kamitu” (Village level Housing Committees) has been already established
throughout the country to get the support for housing development. Especially selection of
beneficiaries and assisting to the construction work are the main tasks of Gemi Nivasa

However the priority will be given to the applicants who are readily available to construct
their own houses and preparation works have been done.

Steps to be followed:
 Compile the loan application.
 Entering to necessary agreement with beneficiaries.
 Officers of NHDA conduct awareness programs for beneficiaries and
guide them to mobilize the resources.
 Commence the house construction by beneficiaries.
 Provide technical assistance by technical officers of NHDA.
 While the construction is on progress financial assistance will be provided as

Financial support
Housing Option 1. New Houses

Beneficiary Loan amount Total Miles tone to be

New Houses Contribution completed

1st installment 50,000 100,000 150,000 Foundation

2nd installment 70,000 150,000 220,000 Wall plate level
3rd installment 40,000 150,000 190,000 Roof completed
4th installment 40,000 100,000 140,000 House
Total 200,000 500,000 700,000

Housing Option 2. Upgrading Houses

Upgrading Houses
1st installment 25,000 50,000 75,000 After the
completion of the
first step
2nd installment 40,000 75,000 115,000 Do second step
3rd installment 40,000 75,000 115,000 Do third step
4th installment 25,000 50,000 75,000 completion
Total 130,000 250,000 380,000

As per the housing policy approved by the cabinet, district housing committee is the engine of the
housing development. All the Divisional secretaries are members of the District housing
committee and they are the head of divisional housing committees. Technical officer attached to
division and all the Grama Niladharis are members of the committee. Housing programs
implement within the division is coming under this committee. Hence the housing programs are
monitored in grass root level.

Loan Recovery

Loan recovery will be started after six month from the date of release of the first installment. Loan
recovery period is 10-15 years in equal installment. Interest rate will be 5% per annum.
Loan recovery system has been decentralized to the district level. Accordingly district offices are
operated as recovery centers of the districts. Recovery agents have been appointed to collect the
loan installment at grassroots level. Therefore borrowers have been given three options. They can
pay to the agent, bank or district office. Loan recovery system will be monitored by head office.

Operation and progress control activities

This program will be implemented by the respective district offices of NHDA while the head
office of NHDA and the Ministry of Housing and Construction will provide the necessary support
for the construction process in the form of resource allocation, coordination, Policy formulation
and capacity building.
All District Managers are advised to conduct full progress review every week (Every Tuesday) at
the district level and to upload to the national progress review system monitored at the NHDA
head office. Hon. Minister in charge of Housing and Construction, as usual will conduct the
weekly progress review at the national level with the participation of Ministerial and NHDA
Obviously, the existing monitoring and evaluation process will assure 100% disbursement with
fully achieved physical targets while ensuring comfort for the all stakeholders of the project

4.5 Composition of target beneficiaries/stakeholders (indicate gender ratio):

During the project period, 20,000 families will be benefited under this program. Approximately
each family consists of 3.9 persons. Hence, approximately 78,000 persons will be covered under
these programs. The beneficiaries will consist of approximately52.4% female and 47.6%males of
the total beneficiary population.

4.6 Relationship of project to national priorities:

The government vision of the expansion of rural economy will be realized only upgrading the
living condition of rural poor. Hence the housing problem of the rural poor has to be address first.

5. Expected Project Outputs:

I. Hence the housing problem of rural poor by 10,000 new houses and 10,000 upgrading
II. Improved sanitary facilities for rural poor.
III. Job opportunity for local skilled and unskilled labors in the construction industry.
IV. Provision of standard housing units for 20,000families within a year.

6. Project Budget (Rs.Mln)
Activity Unit Scattered Scattered Total
(New) (Upgrading)
1st installments - Foundation Rs.Mn 1,000 500 1,500
2nd installments - Roof level Rs.Mn 1,500 750 2,250
3rd installments - Roof Rs.Mn 1,500 750 2,250
Final installments - unit completion Rs.Mn 1,000 500 1,500

Infrastructure (Rs.100,000 grand per Rs.Mn - -


Total Rs.Mn 5,000 2,500 7,500

No.of Houses No.of 10,000 10,000 20,000


6.1 Project Budget Cash flow

Cash Flow 1stQ 2ndQ 3rdQ 4thQ

Scattered / Re-awakening 1,00 1,500 1,500 1,000

Scattered / Re-awakening 500 750 750 500
Total 1,500 2,250 2,250 1,500
Each cost item (component/activity) should be properly explained and justified in relation to
achievement of the project objectives.

7. Financing Plan:

7. 1 Method of Financing

Financial Source Amount

( Rs. Mln)
External Source -
Consolidated Fund 7,500
Proponent Funding -
Beneficiary Contribution *

 Material Labour and savings

7. 2. Project Investment Period

Components Quarter1 Quarter 2 Quarter 3 Quarter 4
Consolidated fund 1,500 2,250 2,250 1,500 7,500

7. 3 Project Operations & Maintenance Costs

Components Source of Year1 Year 2 Year 3 Year 4 Year 5 Total

Financing (Rs. (Rs.Mln)
Project Own fund 400.00 400.00

7.4 Recurrent-expenditure co-efficient (r-Coefficient) - 3%

(Total Recurrent Cost/Total Estimated Cost)

8. Environmental Impacts on Physical, Biological, Socio-Cultural or Aesthetic


Enhancement of Social and cultural status of beneficiaries.

Release the land captured by people without authority and there by avoid the harmful impact to the
natural environment.

9. Gender Perspectives:

9.1Does the project identify any gender gaps? If so describe: No

9.2 Which project strategies will address the gender imbalance? : No

10. Implementation Arrangements:

This project is implemented through district network of NHDA. These offices have enough staff
with the knowledge and experience of participatory housing. Technical officer is the lower level
officer coordinate with the beneficiaries in this process. Those technical officers have been
attached to divisional secretariats to carry out the divisional housing program .In addition all the
related agencies including district administration have been tied to the housing program at district
level. District housing comities have been established in every district to coordinate and implement
the housing program.

11. Staff Availability for implementation of the proposed project:

Existing staff is used for this project and additional staff will not be required.
12. Applicant’s Information.

12.1 Project Proponent

12.1a) Name of the Agency - National Housing Development Authority

12.1b) Address - Sir Chittampalam A Gardiner Mawatha, Colombo 02
12.1c) Phone - 011- 2446180
12.1d) Fax - 011 - 2320058
12.1e) Contact Person 1

i.) Title : Mrs.

ii.) Name : M.S.Weerasinghe
iii.) Designation : General Manager
iv.) Phone : 011 - 2422394
v.) Fax : 011 - 2439982
vi.) E-mail : gm@nhda.lk

12.1f) Contact Person 2

i.) Title : Mr.
ii.) Name : K.A.Janaka
iii.) Designation : Deputy General Manager (Housing and Development)
iv.) Phone : 011 - 2438132
v.) Fax : 011 - 2438130
vi.) E-mail : dgmhd@nhda.lk

12.2) Forwarding Ministry / Provincial Council

12.2a) Name : Ministry of Housing and construction

12.2b) Address : “Sethsiripaya” Battaramulla
12.2c) Phone : 011 - 2862225
12.2d) Fax : 011 - 2864765

12.2e) Contact Person 1

i.) Title : Mrs.

ii.) Name : W.K.K.Athukorala
iii.) Designation : Secretary
iv.) Phone : 011 - 2862225
v.) Fax : 011 - 2864765
vi.) E-mail : secretary@houseconmin.gov.lk

12.2f) Contact Person 2

i.) Title : Mrs.
ii.) Name : R.A.Chulananda
iii.) Designation : Addl. Secretary (Housing)
iv.) Phone : 011 - 2862353
v.) Fax : 011 - 2864776
vi.) E-mail : addlhousing@houseconmin.gov.lk