The Roles of Microcredit in Informal Housing in the Future—A Case Study in Hong Kong

Microcredit is usually used to support employment, poverty reduction, women empowerment, etc. It is rare to have studies on using microcredit to help residents in informal housing to improve their residential mobility. This study is a novel attempt to explore the roles of microcredit in informal housing in the future by taking Hong Kong as a case study. This study aims to investigate whether microcredit affects the relocation decisions of low-income tenants in informal housing markets by using a quasi-experimental approach. A microcredit scheme for this purpose was first proposed, pitched for funding, and then implemented by a non-governmental organization (NGO) in Hong Kong to provide interest-free loans for households living in sub-divided units (SDUs) to pay for rental deposits. Interviews were conducted with SDU households. The results show that the microcredit scheme is conducive to the relocation decisions of low-income households, especially in emergency cases. This study shows the key role of microcredit in empowering low-income households in their relocation decisions, and it can make a difference to the future informal housing markets in the world.