Bridging the Finance Gap in Housing and Infrastructure

This book provides development and donor agencies, governments, academics and students and non-governmental organizations with a valuable opportunity to learn from the work of the UK charity, Homeless International, over the last 20 years. This work is unusual in that it has concentrated on financing community-driven projects among the urban poor in low- and middle-income countries. This has been mostly through long-standing relationships with federations of the urban poor, seeking where possible partnerships with private-sector banks, bilateral and multilateral donor agencies and governments. This book also seeks to encourage other development organizations “…to recognize the growing challenges of urbanization, urban poverty and slums, and to work with [Homeless International] to scale up solutions to complement the energy and determination of the urban poor themselves.”

The book describes the experience of Homeless International and its partners in designing an international guarantee fund and the Community-Led Infrastructure Finance Facility (CLIFF) to finance community-driven slum upgrading. In so doing, the intention is to motivate other agencies to develop a broader collaborative capacity to bridge the financial gaps that they identify. The authors note that few international agencies focus on urban poverty reduction – and within this on housing and infrastructure, exploring the potential linkages between community or informal finance systems and formal finance markets to support community-driven slum-upgrading projects.

Chapter 1 outlines the aims and content of the book. Chapter 2 discusses the work of Homeless International and how it developed, and the key principles that emerged from its work with partner organizations in Africa and Asia. Chapter 3 defines the concept of small-scale capacity building and examines why it is crucial for community-led slum upgrading and sustainable urban development, illustrated with examples from work in India, Cambodia, Namibia and Kenya. Chapter 4 highlights how different understandings of risk impinge on the negotiation and implementation of financial agreements between organizations of the urban poor, local NGOs, public sector agencies, commercial businesses and both governmental and non-governmental donors. Chapter 5 examines how principles identified in Chapter 2 are reflected in the mechanisms for accumulating and accessing financial capital.

Learning from Homeless International’s experience in working with the Indian Alliance of the National Slum Dwellers Federation Mahila Milan, and the Indian NGO SPARC, Chapter 6 explores the conception, implementation and further development of a guarantee fund, its limitations and the challenges of establishing such a fund. Chapter 7 describes the Community-Led Infrastructure Finance Facility that Homeless International and the Indian Alliance developed with support from the British and Swedish bilateral aid programmes, and discusses its role (and future role) and implementation in India, and also in Kenya, working with the Kenyan Homeless People’s Federation and the Kenyan NGO, Pamoja Trust.

Chapter 8 describes how and why urban poor communities need to engage with the formal private sector to finance investment in urban infrastructure and housing. It identifies lessons that have been learnt through working with the private sector and suggests a possible way forward. Chapter 9 discusses the need to engage with government to achieve policy changes and to scale-up community-led projects. This is supported by a reflection on the “critical engagement” of Homeless International and their partners with government. Chapter 10 summarizes the lessons learnt through the experiences of Homeless International and its partners over the past 20 years and identifies the key features that underlie effectiveness in addressing urban poverty, specifically related to housing and infrastructure.