Journal Issue
Finance & Development, March 1975

Self-help housing in El Salvador: A unique Bank project provides a model for other countries

International Monetary Fund. External Relations Dept.
Published Date:
March 1975
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About 60 per cent of El Salvador’s urban households have a monthly income of less than $100. Many people live in poor conditions similar to those shown on the photograph (left), taken in San Salvador, the Central American nation’s major urban center.

About three fourths of the population of San Salvador lives in squatter settlements on public or private land. The problem is compounded by a country-wide urban unemployment rate of almost 12 per cent, a national population growth rate of 3.3 per cent per annum, and an average annual migration rate of 5 to 6 per cent into the cities.

The photographs (right) depict the work of the Fundación Salvadorena de Desarrollo y Vivienda Mínima (Salvadorean Foundation for Development and Low-Cost Housing), a private nonprofit organization, at work in San Salvador. The FSVM is the executing agency in this self-help project involving a $6 million IDA credit and a $2.5 million loan from the World Bank to the Government of El Salvador.

The FSVM has already completed about 1,020 fully serviced lots for families with monthly incomes below $120. El Salvador’s current Five-Year Plan aims to produce 14,000 more with the Bank loan.

Projects like this one become community efforts in a very real sense. The families participate in road building, construction, digging trenches, and pipe-laying, under supervision. They are paid through labor credits which are then applied toward the down payment for their lots.

Once a project is completed, households have often continued the effort and provided task forces for further construction. But the problem of unemployment remains even when that of housing has been solved. Some of the newly housed families have formed cooperatives—the pipe-making shown opposite is one example, and there are others, such as carpentry and rug-making.

The innovative approaches being developed by this project could serve as guidelines for similar work not only in the rest of El Salvador, but also in other parts of the world where low-cost housing is needed.

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