The importance of housing around the world cannot be overstated. Housing is a critical necessity that in some countries is equated with a human right. Housing not only provides shelter, but is the cornerstone of community life, the center of family activities, and a reference point for societal esteem, as well as the most important financial asset most households will ever acquire. In South Asia, which is home to one in four people on the planet, every second person has an income below the poverty line, and housing shortages have become a pervasive problem that has defied resolution for decades. In India alone, more than 25 million families have no home. Compounding the housing shortages are high room-density figures (more than 3.5 people per room in India and Pakistan) and the pervasiveness of slum dwelling areas and squatter settlements, sometimes on footpaths or even in abandoned sewage pipes. Nearly half of the major metropolitan areas in the region are taken up by slum dwellings—Bangladesh alone has more than 2,100 slums, and India over 52,000. In Afghanistan, about 36 percent of people are not able to meet their basic needs, and in Kabul city alone, nearly two-thirds of the housing stock has been damaged or destroyed during the last three decades of war.

Indian and Sri Lankan mortgage markets, the biggest in the region, are still dwarfed by Chinese mortgage markets, at double the size relative to national income, and Malaysian markets, roughly four times larger. Several factors have contributed to the problem of inadequate housing. First, rapid population growth in the region has added a considerable number of families to the ranks of those in need of housing. Second, most population growth has occurred in urban areas, resulting in rapid urbanization. The developing world absorbs an average of 5 million new urban residents every month and is responsible for 95 percent of the world’s urban population growth.