What is the challenge

As climate-related hazards become more frequent and severe, the demand for safe and resilient shelter continues to outpace available humanitarian financing. In disaster‑prone contexts such as the Philippines, communities are repeatedly exposed to typhoons and flooding, yet funding for shelter remains heavily weighted toward emergency response rather than preparedness and risk reduction.

Many low‑income households lack access to affordable financing to strengthen or retrofit their homes before disasters strike, leaving them vulnerable to recurring damage, displacement, and loss of livelihoods. This persistent gap in inclusive, resilience‑oriented shelter financing contributes to a cycle of preventable humanitarian need, placing growing strain on response systems while limiting opportunities for longer‑term recovery and stability.

What is innovative about the project

The project introduces a new approach to humanitarian financing by transforming diaspora contributions into a collective guarantee that unlocks affordable, preparedness‑focused shelter loans. Rather than supporting individual households through one‑off transfers, diaspora funds are pooled into a guarantee that absorbs part of the financial risk for local microfinance institutions. This allowes them to offer a competitive product that de-risks and increases access to low income borrowers that would otherwise be excluded from formal financing.

The mechanism is combined with technical assistance, including Build Better and Safer shelter guidance and construction monitoring, to ensure that loans result in safer, more resilient homes. By integrating diaspora engagement, private capital, borrower empowerment, and humanitarian shelter expertise into a single financing model, the project shifts shelter support from reactive reconstruction toward proactive risk reduction – while creating a scalable, sustainable pathway for preparedness financing in disaster‑prone contexts.

What are the expected outcomes

In the long term, the project seeks to contribute to a shift in how humanitarian shelter is financed, moving from reactive reconstruction toward preparedness‑focused, inclusive financing mechanisms. By demonstrating that diaspora engagement can unlock private capital for resilience, the model offers a scalable pathway to reduce recurring humanitarian needs, strengthen household and community resilience, and support more sustainable, locally anchored approaches to climate‑resilient solutions.

The project will ensure a robust foundation to scale based on the positive impacts and demand from previous iterations. This includes expanding investment and partnership opportunities, ramping up diaspora fundraising efforts, and assessing the model’s applicability in a new context, generating evidence and learning on how diaspora‑backed guarantees can be adapted and replicated in other disaster‑prone settings.

The project will also continue to grow the diaspora‑backed shelter financing model to reach additional vulnerable households in the Philippines, while strengthening the ecosystem of microfinance institutions, technical partners, and local authorities needed to deliver affordable, climate‑resilient shelter at scale. By expanding access to lower‑interest shelter loans and integrating Build Better and Safer construction guidance, the project aims to reduce disaster‑related damage, displacement, and recovery costs for participating communities.

Who are the project partners

The project is led by the International Organization for Migration (IOM), which provides overall coordination, technical shelter expertise, and guidance on diaspora engagement and innovative financing.

Local microfinance institutions in the Philippines are key implementation partners responsible for delivering the shelter loan product, managing loan portfolios, and engaging directly with beneficiary households. Technical partners, including government, training institutions, academia, private sector, banking institutions, and communities of borrowers themselves support the integration of Build Better and Safer construction practices through training, site assessments, construction monitoring, and adoption.

Diaspora organizations play a central role in mobilizing contributions to the guarantee fund, strengthening links between diaspora communities and local resilience efforts. Together, these partners form an ecosystem that combines humanitarian expertise, private capital, and community engagement to enable scalable, preparedness‑focused shelter financing that empowers borrowers and communities to build a safe future for generations to come.