The Story of Trano Mirary

It could be said that Trano Mirary has been 5 years in the making. It all started when a 19-year-old young man embarked on the adventure of a lifetime, destination Madagascar. That young man was Michael O'Day, and his adventure was living in Madagascar for two years as a Christian missionary.

Anyone who has ever traveled to a third world country for the first time can relate to Michael's experience. Michael was shocked by the deplorable housing conditions he witnessed. Families with four, six, or even eight children all living in one bedroom makeshift huts without toilets, running water, or even electricity.

For the majority of his stay Michael assumed that these individuals must live in such horrible conditions simply because they couldn't afford to spend much of their income on rent. He was surprised when he learned that many Malagasy families spend 30-50% of their income each month to live in these horrible conditions. Michael wanted to do something about this, but he didn't know what could be done.

Michael was even more appalled when he learned that many of these individuals were actually paying rent to live in homes that they had built themselves. Lacking the money to buy land, and unable to find a place to rent, due to the housing shortage, many families are forced to build makeshift homes on plots that they rent from landlords. Each year landlords raise rent by 10-20% as mandated by Madagascar law. Eventually individuals can no longer afford to pay the rent on the home they built with their own money and they are evicted. The landlord then turns around and rents these makeshift huts to new families and the cycle continues.

One day Michael came across a family that lived in some of the worst conditions he had ever seen.

Most homes in Madagascar are at least made out of fired mud bricks, these homes were made up entirely of caked mud, the type of structures that collapse during rainy season, killing entire families while they sleep. Despite the fact that Michael had only two weeks left in Madagascar before his flight home, he decided to raise the money to build these families a suitable home, whatever the cost.

He was surprised to learn that construction in Madagascar is actually very affordable. He was able to construct a two-story, four bedroom home in two weeks for only $1,800.

A few months after returning to the States, he came across an interesting article while reading the Madagascar newspaper. The paper featured a government report on the housing situation in Madagascar. According to the report 87% of houses in the Capital City were unfit for human habitation. On top of this there was a housing shortage of 2 million units and there was a need for an additional 100-150,000 units to be built each year. The government was making a plea for international organizations to come to Madagascar and assist them in solving this massive problem. 

A few weeks later while reflecting on this Michael had an idea. What if individual's rent payments were mortgage payments, would they be able to afford a typical 30-year mortgage? After running some numbers he realized that these individuals didn't even need a 30-year mortgage. They were paying enough in rent to pay off the type of homes they were living in just a few short years even while paying a modest interest rate. So the question was why wasn't this option available to the Malagasy people? 

It turns out, that the answer is in the greed of the current landlords in Madagascar. There is so much money to be made in rent, that no one is ever interested in selling. Another part of the problem is the current banking system in Madagascar. The average interest rate charged on a loan is 45%, and the longest term most banks offer is just 3 years! So in order for this problem to be solved you need people who are willing to build houses to sell, not just to rent, and you need banks who are willing to offer longer term loans at more affordable rates.

While returning to Madagascar to do humanitarian work in the summer of 2011, Michael also spent time doing market research and putting together a business plan to tackle these problems. Michael knew he would need to involve experts in the housing market in Madagascar if he was to be successful. 

Finding partners proved much easier than expected. It was as if God was at the helm and directed Michael to the talented individuals needed to make Trano Mirary a reality. He was able to partner with a realtor, a businessman, an architect, a local banker, and a rezoning specialist; all natives of Madagascar passionate about providing affordable housing for the poor. 

But the issues of affordable financing still remained. Unable to hurdle this obstacle Trano Mirary hit the brakes.  It wasn't until months later when Michael returned to BYU that things again were set in motion. 

In December of 2011, Michael was working with his parents on their start-up business in Delaware, and he had no intention of returning for classes in the winter. But a week before classes started he just had a really strong feeling that BYU was the place he needed to be. So he registered for classes, booked a flight, and a week later was in Provo, UT looking for a job.

At first, Michael wasn't really sure why he needed to come back out to Provo. Nothing grand or remarkable happened his first week back. A month into the semester Michael was walking home when he noticed signs for the finals of the Business Model Competition. They were giving away some really great prizes so he decided to go check it out. It was while sitting through the finalist's presentations that he realized that his plan for Trano Mirary was good enough to compete. He resolved to enter the competition the following year.

The next day, while talking on the phone with one of his friends, he mentioned his experience. His friend told him of a few competitions, that were still open for submission, and encouraged him not to wait. It was upon this suggestion that Michael googled BYU's Social Venture Competition. It turned out that the submission deadline was just one week away. 

Michael spent the week scrounging together his submission and made the first cut. The weeks leading up to the semi-final round were spent toiling over research trying to learn the best strategies being used around the world to provide affordable housing. 

When the time came to pitch Trano Mirary in front of a panel of 5 judges he was ready. It was Michael's luck that one of the judges was Troy Holmberg, who works with Amani Village, a company that provides affordable housing in Kenya. Michael was able to get his contact information and connect up with their team on the ground to get some really invaluable advice. 

Michael was ecstatic when he heard the news that Trano Mirary was advancing to the finals and so were his business partners in Madagascar. With the new impetus this news brought, Trano Mirary was able to forge a new partnership with the Bank of Africa. As a result of this partnership, the Bank of Africa would now be providing 10 to 15-year housing loans at 19.5% APR, much less than the standard 45%. This removed the last major obstacle in Trano Mirary's path. 

The days leading up to the final event were spent in preparation, but this time Michael would be joined by his partner Lacee Curtis. Together they spent countless hours on their presentation and all the work paid off. Trano Mirary not only took 1st place in the competition, but they also won the Audience Choice Award, taking home $25,000 in total. 

But even better than the money were the connections Michael and Lacee made with the judges who volunteered their time for the competition. Individuals with connections to key players in the affordable housing market in Africa, and individuals with connections to potential investors. 

There is still much of Trano Mirary's story that is left untold, but only time can write the remaining chapters in this exciting tale. Stay tuned to our blog for many exciting updates to follow!