Rob Gailey_Rebecca Harver_How can Microfinance Contribute to Restoring Dignity and Transforming Lives in Urban Slums?

8/3/2019 Rob Gailey_Rebecca Harver_How can Microfinance Contribute to Restoring Dignity and Transforming Lives in Urban

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2011 Global Microcredit SummitCommissioned Workshop Paper

November 14-17, 2011 Valladolid, Spain

How Can Microfinance

Contribute to RestoringDignity and Transforming

Lives in Urban Slums?Written by:

Rob Gailey,Director, Center for International Development, &AssociateProfessor of Business, Point Loma Nazarene University,

San Diego, CA, USA

Rebecca Harver, Spanish Major, Point Loma Nazarene University,San Diego, CA, USA


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TABLE OF CONTENTS

Introduction.3

Slums Defined.............4

The United Nations Five Primary Aspects of Slums....10

Big Picture Issues (Positive and Negative)....12

The Role of Microfinance......15

Conclusion.29

Appendix ...36


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How Can Microfinance Contribute to Restoring Dignity and

Transforming Lives in Urban Slums?

Introduction

Improving the lives of slum dwellers is the best way to achieve all the Millennium

Development Goals. Improved housing conditions and provision of water and sanitation

will not only save lives among the very poor, but also support progress in education and

health. (UN-HABITAT State of World Cities 2010/2011, as quoted in CLIFF, p. 6, 2010)

The worlds population will soon surpass 7 billion people. In 2008, for the first time in humanhistory, the ratio of urban to rural dwellers passed the 50% mark. As the worlds cities absorb

this tremendous growth in human population, housing and public services in these areas have not

kept pace, particularly in less developed countries where overall population growth is more

pronounced and urban crowding is most severe. The resulting challenge of the rise in informal

urban settlements is becoming a central concern for governments and for those interested in

poverty alleviation (Davis, 2004; Neuwirth, 2005; Mitlin & Satterthwaite, 2004).

This paper seeks to investigate the role that microfinance services may have in offering dignity

and hope to people living in informal urban settlements (slums) around the world.1

The paper

begins by describing categories of slums used in the literature and what scholars view as primary

drivers of slum growth and the impact slum settlements have on poor people. The paper then

explores the five major concerns regarding slums that have been highlighted by the United

Nations (UN) in relation to the Millennium Development Goals. This section concludes with a

few important caveats to any big picture view of slums and how best to fix them.

1 For space and ease of reading purposes, this paper will use the term slums throughout the document. However,the word slum is first used in quotation marks to signify the authors preference for the term informal urbansettlements to describe these communities. As one source suggests, [T]oday, the catch-all term slum is loose anddeprecatory . . . it has many connotations and meanings and is banned from many of the more sensitive, politicallycorrect and academically rigorous lexicons. However, this source goes on to state, [I]n developing countries, theterm slum, if it is used, mostly lacks the pejorative and divisive original connotation, and simply refers to lower-quality or informal housing (United Nations Human Settlements Programme, 2003, p. 9).


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The papers next section considers possibilities within the microfinance sector, particularly

microfinance institutions, related to what is happening or could happen in addressing the United

Nations five major slum issues.2

This section of the paper considers each one of the five

primary UN concerns. Every concern is further broken down into a) hopeful operations within

microfinance, b) challenges that remain, c) possibilities/opportunities and recommendations, and

d) research/analysis questions to explore. The paper concludes with a summary of the challenges

and opportunities that exist in the microfinance sector to provide dignity and hope for people

living in these growing informal urban settlements.

Slums Defined

Before one can adequately explore the role of microfinance in restoring dignity or transforming

lives in slum areas, it is important to define and categorize the meaning of these informal urban

settlements. In 2002, a group of slum experts in Nairobi defined a slum as a contiguous

settlement where the inhabitants are characterized as having inadequate housing and basic

services, and representing an area that is often not recognized and addressed by the public

authorities as an integral or equal part of the city (UN-Habitat, 2003, p. 6). While slum areas

highlight the significant physical and political inequalities that exist within cities, the UN-Habitat

authors remind their readers that not all urban poor people live in slums and not all people who

live in slums are poor (p. 4).

While urban slums are a growing concern and visual eyesore for cities in less developed

countries, it is important to remember that slum-type areas have existed in urban settlements

since the dawn of cities. Indeed, less than a hundred years ago, during the height of the industrial

revolution, most of the major urban areas in Europe and North America had significant and

blighted slums. Now, at the turn of the new century, more than three-fourths of urban dwellers in

the least developed nations in the world reside in urban slums (United Nations Human

Settlements Programme, 2003, p. 14).

2 For an excellent additional resource on this topic, please see the paper by Kelley and Baumann (2011), which alsowas commissioned for the Global Microcredit Summit in Valladolid, Spain.


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Kinds of Slums

The UN has further categorized slums into slums of hope and slums of despair. Slums of

hope are progressing settlements, characterized by new and mainly self-built structures. The

dwellers are usually illegally present (e.g. squatters), and are in, or have recently been through,

the process of development, consolidation, and improvement. In contrast, slums of despair are

known for their declining neighborhoods, where environmental conditions and domestic

services are undergoing a process of inevitable decay and degeneration (UN-Habitat, 2003, p. 5;

UN-Habitat, 2007, p. 1).

The two broad slum categories of hope and despair are further delineated into narrower sub-

categories. According to the United Nations Human Settlements Programmes The Challenge of

Slums (2003), declining slums of despair are further divided into old city centre slums and

new slum estates. Similarly, progressing slums of hope can be delineated into semi-legal

subdivisions and squatter settlements (p. 80). There are also urban settlements that reflect or

include aspects of urban poverty and are similar to slums but are not always defined as such.

Davis (2006) suggests that at the Metro-Core, formal settlements are composed of tenements,

public housing, and hostels or flophouses, while informal settlements include squatters

authorized and unauthorizedand pavement-dwellers. In the peripheral areas, formal

settlements are composed of private rentals and public housing, while informal housing is

composed of pirate subdivisions and squatters. Refugee camps are a third form of settlement

lying in the peripheral areas (p. 30).

Once a slum is recognized and defined, it can be categorized based on different measurements.

These include the origin and age of the slum, the location and boundaries, the size and scale, the

legality of the space and buildings, the vulnerability of the people, and the development stages of

the slum. Central slums comprise the inner-city slums, scattered slum islands are pockets or

islands of slums spread throughout the city, and peripheral slums lie on the periphery or

outskirts of the city.


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The development stages of slum settlement are varied. Ongoing individual and community-led

development suggest individual families taking initiative for improvements and showing greater

community cohesion. Intervention-led improved slums are those where some intervention has

been made to improve some aspects of the settlementwhether or not the intervention has

positive or negative impacts varies and often depends on perspective. Upgraded slums are those

that have gone through a fairly extensive upgrading and improvement program, usually through a

government agency or private-sector non-profit. Incipient slum creation is the formation of new

slums as poverty increases and resource accessibility declines.

Causes of Slums

Contrary to a common misperception that poor housing creates poverty, Seabrook (2007) argues,

[I]t is the poverty that creates the sites of desolation where the poor people live, not the

environment that creates poverty (p. 70). Yet, if poverty leads to informal and slum settlements,

what is it that causes urban poverty? A number of different factors are at work to create or

perpetuate poverty among urban dwellers: rapid rural to urban migration, tenure insecurity, and

lack of access to basic services. Another major cause of slum proliferation among urban dwellers

is poor public policies. The UN-Habitat program outlines several policy-related factors,

including the failure to plan the city to cater for urban demographic trends[,] . . . the failure to

address peoples needs, inequalities in access to services, insecurity of tenure, and inequalities

between men and women (UN-Habitat, 2003, p. 3). Davis (2006) argues that historic and

current pro-corporation and pro-wealthy policies are also significant factors in the creation of the

growing slum populations. After referencing the UNs 2003 report, The Challenge of Slums,

Davis concludes, [I]nstead of being a focus for growth and prosperity, the cities have become a

dumping ground for a surplus population working in unskilled, unprotected and low-wage

informal service industries and trades (p. 175).

Indeed, rapid rural to urban migration, in large part due to deliberate business and political

policies favoring urban areas, is one of the most well-known and enduring causes of urban slum

formation. Economists Todaro and Smith (2009), in the latest edition of their bookEconomic

Development, argue, [O]ne of the most significant of all modern demographic phenomena and

the one that promises to loom even larger in the future is the rapid growth of cities in the


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developing countries (p. 322). Mostly poor families living in rural areas and working in the

agricultural sector began a mass migration to cities and crowded urban areas in such numbers

that, since 1950, developing country agriculture has declined by 20 to 30%. The reason for this

mass migration was the perceived benefits of life in the city. Over the past 60 years, as countries,

even less-developed countries, have pursued industrialization, there has been a significant

amount of job creation in urban areas, both in the formal and informal sectors. But the job

opportunities have not kept pace with the migration and population growth that has occurred in

these urban areas. In fact, any growth in job opportunities has in turn spurred ever greater rural to

urban migration.

While urban areas were adding jobs, albeit not fast enough to keep pace with migration and

population growth, international and national agricultural and manufacturing tax and subsidy

polices were rapidly hurting rural economies and causing a significant decline in the ability of

rural families to sustain family life through traditional subsistence farming. The combination of

increasing rural poverty and a growingor perceived growingurban job market combined to

cause millions to leave their villages and migrate to cities in hopes of securing a job that paid

well enough to survive. Todaro and Smith (2009) make it clear that the mere hope of a formal

sector job that pays well inspires people to move into urban areas even if the practical reality is

that very few people actually acquire well-paying formal employment (p. 347).

Much like lotteries all over the world entice poor people to give up what few resources they have

in hopes of striking it rich, the mere possibility of a steady job, not the real earned income of

migrants, is what motivates rural families to move into cities. The citys informal sector is left to

absorb the migrant overflow unable to find formal-sector employment. While many sectors in the

informal urban economy have expanded and created jobs, the pace of rural to urban migration

still exceeds the necessary job creation. Furthermore, these informal sector jobs normally do not

come with job security, benefits, or a livable wage (UN-Habitat, 2007, p. 2; Todaro & Smith,

2009, p. 345). And, as with formal sector job growth, any growth in informal sector jobs creates

unplanned incentives that further speed rural to urban migration.


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The rapid population growth in urban areas caused by perceived job opportunities has led cities

to become overwhelmed by humans who need a place to live, adequate water sanitation, safety,

and other public services, such as hospitals and schools. The massive influx of people has left

most cities and management systems unable, or unwilling, to adequately cope. Yet, vested

interests in cities seek to use their power and wealth to protect certain assets and land from

encroachment by newcomers, leaving few options but slums to absorb the urban growth (UN-

Habitat, 2007). The subsequent overcrowding in urban slum areas facilitates the so-called

urbanization of poverty, driven, in large part, by a constant quest for better employment.

Many of the housing settlements created by rural migrants to urban areas are informal, lacking

legal property rights and characterized by an insecurity of tenure. Secure tenure is the right of

all individuals and groups to effective protection by the State against unlawful evictions (UN-

Habitat, 2003, p. 7). Insecure tenure is a major challenge for newly arrived urban dwellers and

represents, arguably, the biggest contribution to slum proliferation. In an article entitled What

are Slums and Why Do They Exist?(2007), UN-Habitat explains:

The lack of secure tenure is a primary reason why slums persist. Without secure tenure,

slum dwellers have few ways and little incentive to improve their surroundings. Secure

tenure is often a precondition for access to other economic and social opportunities,

including credit, public services, and livelihood opportunities (p. 3).

Seabrook (2007) also acknowledges the complexity and importance of security of tenure and

rightfully suggests that housing insecurity, more than any other issue, comprehensively impacts

slum dwellers while also offering a disagreeable reminder of the circumstances that evicted the

landless from rural areas in the first place (Seabrook, p. 71). Often, legal ownership is a

prerequisite for receiving other services, such as credit, which could be used to improve housing

conditions in slum areas.

In many poor countries that have male-dominated cultural, educational, and political influences,

females face additional, in some cases insurmountable, obstacles related to security of tenure for

land or houses. These gendered obstacles further contribute to the feminization of poverty among


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the worlds poorest 2 billion people (Pearce, 1978; Rowe, 1991; Topouzis, 1990). The critical

need for tenure is described later in this paper.

Another main cause of slums is governments inability to provide adequate services, such as

healthcare, education, and sanitation for all people. The dearth of adequate, accessible, and

affordable healthcare and education in rural areas is a key driving force spawning rural to urban

migration. Yet the growing urban slums also lack appropriate healthcare, sanitation, and

education services for their residents. Many slums are located on the periphery of cities, far from

the main citys services and with limited, often expensive, access to the city center. Slum areas

generally lack basic services such as sanitation and garbage disposal/pick up, with limited access

to clean water or sanitary toilets sufficient to serve the population. For instance, of the 4.4 billion

people living in developing countries, nearly three-fifths lack basic sanitation (Gershman &

Irwin, 2000, p. 13).

Millen, Irwin, and Kim (2000) explain how poverty, lifes basic necessities, and illness are

intertwined: disease proliferates in communities lacking adequate housing, food, sewage, waste

disposal, drainage, and clean water for drinking, cooking, and cleaning (p. 3). The

governments failure to provide basic services and their inability to offer adequate land sufficient

to handle all urban residents, combined with the governments lack of legal recognition of slum

dwellers in terms of housing/land tenure, has led to severe overcrowding in the peripheral areas

of cities.

In many countries, slum dwellers living on land they do not have legal title to are first and

foremost considered lawbreakers by their countrys government. In the worst cases, as the UN

article The Challenge of Slums (2003) notes, urban poor people are trapped in an informal and

illegal worldin slums that are not reflected on maps, where waste is not collected, where

taxes are not paid, and where public services are not provided, and, sadly, officially they do

not exist (p. 6). Thus, government failure and the lack of legal recognition of many urban

residents significantly contribute to slum creation. And, unfortunately, these failures can produce

a vicious cycle of slum development, as the distance of these peripheral areas generally means

governments, even when they are willing, cannot afford to provide adequate community services

in these areas.


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The United Nations Five Primary Aspects of Slums

History

The United Nations Habitat Program has outlined five necessities for urban slum dwellers or,

rather, five areas that slum dwellers lack, related to a key target of one of the eight primary

Millennium Development Goals (MDGs). Each primary goal of the eight globally agreed-upon

MDGs for all nations is further supported by specific targets. MDG number 7 is to Ensure

Environmental Sustainability, and under this goal is target 11, which states, Achieve

significant improvement in [the] lives of at least 100 million slum dwellers, by 2020 (UN-

Habitat, 2003, p. 4).

In an effort to help nations, and the global community, achieve this target, a UN Expert Group

suggested five components that characterized slums. The five components involved insecure

residential status, inadequate access to safe water, inadequate access to sanitation and other

infrastructure, poor structural quality of housing, and overcrowding (UN-Habitat, 2003, p. 6). In

response to the five common deficiencies found in slums, the UN has suggested five alternative

goals for improving slums that directly address the five stated challenges. The corresponding

goals include access to safe water (a sufficient amount of water for family use at an affordable

price . . . without being subject to extreme effort), access to sanitation (a private or public toilet

shared with a reasonable number of people), secure tenure (protection against forced evictions),

durability of housing (built on a non-hazardous location and has a structure permanent and

adequate enough to protect its inhabitants from the extremes of climatic conditions), and

sufficient living area (not more than two people share the same room). Based on these five

aspects, a household in an urban area is considered a slum household if the individuals living

under one roof lack one or more of these five aspects or conditions. (UN-Habitat, 2003 p. 7).

While these five attributes have been highlighted as key elements in slum elimination, their

counterpart challenge list is not a comprehensive list of all of the characteristics and living

conditions of slum dwellers. While these five key concerns are important elements of slum living

and require further analysis, which is done below, other factors impacting the lives of poor

people in slums include social exclusion, lack of jobs, lack of political power, and the fragility of


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an informal economy. Unfortunately, the scope of this paper does not allow for a detailed

exploration of these additional factors.

Access to Safe Water

Water is a precious commoditythe most vital resource needed for human survival. Regular

access to clean water is essential for avoiding debilitating health problems. Yet most informal

settlements in urban areas are not connected to a functioning or adequate water grid, creating a

major challenge for slum residents. Water vendors step into this void and will charge up to 200

times the regular price for tap water. The UN advocates that all slum dwellers should have access

to safe, clean water (minimum 20 liters per person per day) that is affordable, of sufficient

quantity, and accessible without excessive effort or time, particularly for children (UN-Habitat,

2003, p. 7).

Access to Sanitation

Closely tied to the issue of safe and affordable water is the need for urban slum dwellers to have

access to proper and adequate sanitation. Highly infectious excrete-related diseases, such as

cholera and diarrhea, remain global health concerns as they continue to kill millions of people

each year. Poor people lose billions of dollars in lost wages when they are too sick to work and

they do not have proper health insurance coverage. The UN wants all slum dwellers to have a

direct, private connection to a public sewer or adequate septic system and a pour flush latrine or

a ventilated improved pit latrine that is either private or shared by no more than two households

(UN-Habitat, 2003, p. 9).

Security of Tenure

Insecurity of tenure is perhaps the most detrimental factor of all that impact urban slum dwellers

because of its ripple effect on peoples other legal rights and financial options. The Challenge of

Slums (2003) notes, the removal of tenure-insecurity related obstacles that prevent or constrain

households from using their housing effectively as a productive asset is possibly the single most

critical poverty reduction intervention (p. 109). Various types of tenure or home security, such

as formal homeownership or private rentals, often are not available to slum dwellers because the

legal process to obtain land is extremely lengthy and complex (De Soto, 1989, p. 136).


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One of the greatest fears of people living in slums, a tangible fear that regularly undermines the

value of their homes, is the constant threat of eviction. The Center for Housing Rights and

Evictions (COHRE) claims to have documented more than 7 million persons, disproportionately

more women than men, in 60 countries who were forcibly evicted from their homes in 2001-

2002 (UN-Habitat, 2004, p. 4). Peruvian economist Hernando de Soto (1989, 2000) argues for

the importance of granting property rights to poor people in urban areas as a way to facilitate

slum dwellers being able to acquire a formal identity and a tangible asset that can be leveraged

by them for productive purposes.

Durability of Housing

This indicator is the most locally specific of the five major challenges. Local weather

conditions, available housing materials, and cultural/regional construction protocols require local

experts to help determine what is or is not considered durable. That said, certain locations are

universally considered hazardous and unsuitable for human habitation. Furthermore, at a

minimum, all building materials and standards can be expected to protect inhabitants from

extreme climate conditions such as heat, cold, rain, and humidity (UN-Habitat, 2003, p. 12).

Sufficient Living Area

Overcrowding in tight living spaces is a common occurrence in slum areas. The physical, mental,

and social problems that arise from cramped living is acute, particularly in rooms where five or

more people may eat, cook, sleep, and conduct all household activities. Problems are amplified

when hundreds of such rooms/housing structures are clustered together in close proximity in a

limited geographic space. The UN seeks to ensure there are limits to how many structures are

located in a particular area and that the structures average no more than three people per room

(UN-Habitat, 2003, p. 13).

Big Picture Issues (Positive and Negative)

The UNs five key attributes of slum living, as outlined earlier, are important to better

understanding the circumstances and obstacles facing slum dwellers. However, material

deficiencies alone cannot capture the totality of challenges that slum dwellers face. There are


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some big picture issues, some negative and a few positive, that are important to consider when

attempting to help people living in slums.

A significant feature of slum areas, as already noted, is that a lot of people live in a very limited

geographic space. Often, the rural to urban migration that occurs in developing countries brings

people from different ethnicities or language groups together and forces them to live in close

proximity to one another. In places where different cultures must co-exist in tight living quarters,

it can be hard to establish trust among different groups.

The level of social capital, or trust among people, may be too low for good community

collaboration and dialogue to occur. Indeed, in places where broader social capital is lacking,

tighter small-group social capital may flourish, pitting one group against another. Consider the

rise of gang warfare in the favelas of Brazil as evidence of negative social capital (allegiance

only to a tight-knit social group, often criminal in nature) against positive social capital that

nurtures trust in the larger social community.

Too often slums are places where crime is prevalent. It is hard to develop positive initiatives in

slum communities when peoples lives are at risk or their assets are easily stolen. In areas where

police have little or no control and cannot enforce the law and in areas where the police are

corrupt and will not properly enforce the law, it may prove futile to work toward the rights of

slum dwellers to be granted tenure of land or houses, and to advocate for protection from

evictions.

Conversely, on the positive side of the big picture issues, population density can be useful.

Because urban slums have many people living in a very limited space, more people can be

provided government and community services if these services are operated efficiently. Thus,

urban areas can offer access to education, healthcare, and transportation more cost-effectively to

more people than the same services and same level of service offered to people in rural

communities.


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In a similar vein, the close proximity of urban slum populations offers businesses more efficient

outlets to a larger number of customers. This efficiency is important for formal businesses, but it

is even more important for businesses operating in the informal economy. Thus, urban slum

areas offer great opportunities for informal business start-ups and business growth, helping

people to gain access to jobs more quickly. That said, two of the primary drawbacks to

businesses operating in the informal economy is that they avoid most regulations, putting

customers at risk of unscrupulous business practices, and they do not pay taxes, reducing

government revenue that could be re-directed toward community services and improvements.

Among the several big picture issues to consider in any discussion regarding urban slum

renewal, however, and perhaps the hardest one to confront, is the notion that any significant

improvements in urban slums will likely result in hastening the already significant and

overwhelming rural to urban migration. Creating a better environment in an urban slum can

attract or pull more rural dwellers to consider making the move into the city, swelling urban

populations even more. Because most countries political and economic preferences already

favor urban areas at the expense of rural communities, most people living in rural areas live in

abject poverty and are poorer than their urban counterparts. Todaro and Smith (2009) point out

that even just a promise or hope of better conditions in an urban area (despite practical realities)

can influence rural peoples decision to migrate. Unfortunately, the better the improvements

areor more accurately, the better the perceived improvements arethe larger the percentage of

people who may choose to migrate, thus swelling the slum areas even more and potentially

making conditions worse. Those wanting to delve deeper into the big picture issues of slums

should review the organizations and authors listed in Appendix A of this paper.


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The Role of Microfinance

Introduction

This section will be formatted a bit differently from the earlier sections of this paper. Each of the

UNs five key issues related to slums will be listed either one at a time or in pairs where

appropriate. Under each of the key areas will be listed the following four sub-categories. The

first sub-category will describe hopeful operations from various nonprofit/non-governmental

organizations, including microfinance organizations, which are addressing particular key issue(s)

in slum communities. The second sub-category will explore challenges that remain for

involvement in the particular key area(s). This sub-section will address all microfinance services

but give particular focus to the challenges faced by microfinance institutions (MFIs) in

addressing the particular key concern(s). The next sub-category describes

possibilities/opportunities or recommendations for microfinance service providers related to the

key issue(s), again focused mostly on MFIs. The final sub-category will list a few

research/analysis questions that scholars or monitoring and evaluation staff can explore further

related to the particular key area(s). The information will be listed by bullet point rather than in

full narrative in order to focus on the primary highlights in the limited space available. Readers

are encouraged to utilize the listed resources to gain a more detailed understanding of the

examples given as well as consult the organizations and authors listed in Appendix A of this

paper.

UN Considerations: Access to Safe Water and Access to Sanitation

Historically, microfinance programs have avoided offering loans that related to water provision

because water and sanitation services were perceived to be the sole domain of national and local

governments. Recently, however, a few organizations have launched microfinance products that

provide communities (large-scale investments) or households (individual families) with

financing for more affordable and/or more accessible clean water and sanitation services.

Partnerships between, and collaboration among, multiple organizations is required to get the

proper mechanisms and oversight in place.


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Hopeful Signs from the Microfinance Sector

In Pakistan, WaterAid partnered with a local organization, Anjuman Samaji Behbood(ASB), to work with communities and government authorities. ASB provided community

members with loans initially to purchase links to the citys water supply and eventually to

purchase sewer connections to the citys drains.

Water.org (formerly WaterPartners) has invested significantly in microfinance-basedwater and sanitation initiatives. An early investment was done with a womens self-help

group (SHG) called Gramalaya, which is operating in rural and urban areas of Tamil

Nadu, India. Gramalayas urban efforts were in the city of Tiruchirappalli. The Indian

MFI BASIX Bank provided training to Gramalaya, which adopted sound practices from

the microfinance sector. Over a period of three years, from 2004 to 2007, Gramalaya

disbursed nearly $200,000 (a grant for loan fund from WaterPartners) to 201 womens

self-help groups (118 urban, 83 rural) helping 2,163 members with both water and

sanitation improvements. In the urban area, an 18% interest rate was charged and the

repayment rate was 100%. This partnership was so successful that an additional 24,000

group members acquired almost $400,000 in water and sanitation loans from commercial

banks, internal SHG savings, and government subsidies. Eventually Gramalaya created a

completely new MFI, called GUARDIAN, which is specifically designed to provide

micro-loans for water and sanitation projects. Gramalayas specific emphasis on hygienepromotion activities to their SHG members helped generate greater interest in clean water

and sanitation and helped spur interest in investing in such improvements (Arney et al.,

2008).

Globally, Water.org launched a new microfinance initiative called WaterCredit.WaterCredit operates in India, Bangladesh, Kenya, and Uganda by partnering with 23

organizations, including MFIs, self-help groups (SHGs), and non-governmental

organizations (NGOs). While some of these partners work in rural areas, many operate in

urban areas, particularly in slum communities. As of June 2011, more than 51,300 loans

have been made, with an average loan size of $120. More than 90% of the clients gaining

access to these loans are women and the global repayment rate since 2007 stands at 97%.

See Kelley and Baumann (2011) for details of this program in the slums of Dhaka,

Bangladesh.


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An important article for those interested in learning more about this topic and to reviewsome helpful case studies isInnovations in Financing Urban Water & Sanitation

(Trmolet et al., 2007).

A recent study on supplying water on credit in urban Morocco (Devoto et al., 2011) findshouseholds are willing to pay a substantial amount of money to obtain a private tap in

their home, even when free public taps are close by. The research found no improvement

in health gains from using a private tap but did find an increase in the quantity of water

drunk and a substantial time gain for the treated households. The study also found

significant improvement in well-being among households with a private tap despite the

additional financial cost for the connection. In places where public water is a source of

tension between households, private home connections can reduce conflict and improve

social integration.

Practical Action (http://practicalaction.org/welcome-to-practical-action) is a UK-basedinternational NGO that has sought to combine waste management, urban composting, and

slum improvements with income generating options for slum dwellers. This is not a MFI

but an organization that thinks creatively about turning waste into small businesses.

The Community Fund for Sanitation in Poor Urban Neighborhoods (FOCAUP) inSenegal worked towards creating a sustainable credit and savings program, begun in the

1990s (Gaye & Diallo, 1997). ACTogether in Uganda has mobilized community members into several sanitation

committees, and each one takes special days for cleaning their respective settlements.

This focus on health and hygiene has enhanced the use of settlement-wide savings

schemes. These efforts were developed by slum communities that are organized in

savings and credit networks with an intention of influencing health-related programs at

city and national levels (www.actogetherug.org/program-components).

While not directly water and sanitation related, Jami Bora in Kenya and Grameen Bank(via its off-shoot program called Grameen Kalyan) are able to offer low-cost health

insurance to their clients. This provides clients with an important asset to counter poor

and inadequate water and sanitation services in their communities. If clients get sick, they

are able to recover more quickly and return to work with adequate health care provisions.
http://practicalaction.org/welcome-to-practical-actionhttp://practicalaction.org/welcome-to-practical-actionhttp://practicalaction.org/welcome-to-practical-actionhttp://www.actogetherug.org/program-componentshttp://www.actogetherug.org/program-componentshttp://www.actogetherug.org/program-componentshttp://www.actogetherug.org/program-componentshttp://practicalaction.org/welcome-to-practical-action


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Patrick Kelley, director of International Housing Finance for Habitat for Humanity, notesthe emergence of metafinance, where a group-guaranteed loan is used for community

infrastructure such as water and sanitation needs rather than for an individual family

shelter (Kelley, 2010).

Challenges that Remain for MFIs to be Involved

Financing water and sanitation projects at either the household or community level iscomplex and requires sophisticated loan products and a willingness to collaborate with

other organizations and work closely with local and national government agencies.

Financial innovation and the creation of new systems to reach the final mile of serviceinto communities do not mean that truly poor people will be served. Indeed, some of the

examples provided of MFIs financing urban water systems relate to areas where

households hold tenure to their land and/or house. Finding services that work for slum

dwellers that do not hold land tenure will remain a challenge for MFIs for years to come.

MFIs may require a mental shift on several levels. Due to its complexity, water andsanitation financing must be driven by demand, rather than forced by supply. MFIs that

are used to encouraging clients to start businesses by accessing the loan products they

offer must shift their approach and better respond to demands by households and

government agencies regarding water and sanitation issues. The demand for financing

must come from the community, and the larger infrastructure pieces usually must come

from governments. Also, in most cases, household water and sanitation improvements

will generate lower profit (or cost-savings) margins for households than typical business

loans. Subsequently, households will need lower interest rates on the water-related loans

and also will require more time to repay their loans. MFIs wanting to engage in these

kinds of loans will need to adjust their expectations and cash flow management

accordingly. Indeed, some levels of subsidies may be necessary. For instance, the

WaterPartners/Gramalaya partnership, described in the hopeful section above, included

subsidies at several levels of the program (Arney et al., 2008, p. 9). Finally, institutional

sustainability is a core pillar in microfinance orthodoxy. Yet MFIs venturing into water

and sanitation loans may jeopardize their credibility in this regard. That said, as capital

investors, UN agencies, and local and national governments consider the economic


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possibilities and the breadth and depth of outreach MFI organizations can offer, they may

be willing to structure partnership agreements that help rather than harm an MFIs

financial bottom line.

Possibilities/Opportunities or Recommendations

With the emergence of WaterCredit in the marketplace, any MFI that has avoidedventuring into water or sanitation lending should re-consider, particularly in the four

countries where WaterCredit operates. WaterCredit serves water and sanitation needs in

both rural and urban communities.

MFIs operating in urban slums, particularly in countries where Slum DwellersInternational is active and mobilized, should work with local communities and local

government agencies and nonprofits in the water and sanitation arena to explore possible

partnerships. There are now plenty of resources available to guide collaborations using

existing partnerships for guidance.

For MFIs operating in Central America and interested in community-wide watersolutions, it may be worthwhile to explore a partnership with the water organization

Healing Waters International (http://www.healingwaters.org/).

To support educational endeavors for clients and their children that can help reducehealth problems connected to poor water and sanitation services, MFIs can replicate orpartner with organizations such as Fonkoze in Haiti (http://www.fonkoze.org/) or Edify

(http://www.edify.org/). Edify offers educational services and/or loans to private schools

to help foster greater educational opportunities for clients. BRAC in Bangladesh

(http://www.brac.net/content/about-brac-education) is another example of an MFI using

educational tools to assist clients in a more holistic fashion rather than with credit alone.

Research/Analysis Questions to Explore

Replicate the recent Morocco study but in an urban area where free public water is not soeasily accessible. It would be interesting to see if private water access improved health

measures in such a circumstance.

It makes economic sense for households to pay money or invest in gaining access tocleaner water (less costly and uncomfortable illnesses), cheaper water (budget savings),
http://www.healingwaters.org/http://www.fonkoze.org/http://www.edify.org/http://www.brac.net/content/about-brac-educationhttp://www.brac.net/content/about-brac-educationhttp://www.edify.org/http://www.fonkoze.org/http://www.healingwaters.org/


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or more readily accessible water (increase in time not spent getting water). However,

personal benefits at the household level that come from sanitation improvements are less

tangible. Therefore, it may be a challenge to convince families to invest in such

improvements. Further research is needed into marketing household sanitation benefits.

For two possible options for women in urban slums to operate micro-businesses (similar

to the phone ladies of Grameen Bank), see Peepoople

(http://www.peepoople.com/showpage.php?page=6_0) and Sustainable Health

Enterprises (http://www.sheinnovates.com/index.html).

UN Consideration: Security of Tenure

As stated earlier in the paper, security of tenure is probably the biggest challenge faced by slum

dwellers. Slums dwellers want assurances that they will not be evicted from their homes

arbitrarily or without warning or compensation. To gain a certain level of permanency and

control allows people living in slums to invest in home upgrades for their families without risk of

losing their investments. Gaining legal ownership of a home and/or plot of land provides slum

dwellers with a viable asset to leverage for different funding needs as well as a legal address to

call their own for economic, employment, and political reasons.


In Cambodia, the Solidarity and Urban Poor Federation (SUPF), a partner of SlumDwellers International (SDI), was started in 1994 as a savings scheme. SUPF/SDI invited

officials from local and national government offices to join community members from

informal urban slums on integrated exposure trips to India, South Africa, and Thailand.

The friendly bonds that were forged on these trips, and the learning that took place,

helped the Federation secure free alternative land for families displaced by development

projects (Asian Coalition for Housing Rights, 2001). SUPF partnered with the Asian

Coalition for Housing Rights and local municipalities to set up the Urban Poor

Development Fund (UPDF), which became the first community-managed resettlement

project. By April 2008, 222 communities with 13,622 members in Phnom Penh and 354

groups in all of Cambodia with more than 20,000 members total had organized savings

groups. Loans are made to communities, not individuals, and the communities must have
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established savings clubs with at least 10% of the loans requested already in their savings

accounts. More than US $2 million in loans has been disbursed to almost 9,000 families

(Phonphakdee et al., 2009).

By the end of 2010, the Malawi Homeless Peoples Federation, an affiliate of SDI, hadnegotiated successfully for land for more than 3,000 members in several urban areas.

There are more than 15,000 registered members in the Federation who are actively saving

in both rural and urban areas. MFIs and other NGOs are getting more involved in

providing house loans for urban dwellers. In 2010, the Malawian government passed a

bill in the national assembly regulating microfinance efforts. Almost 10,000 housing

loans have been issued by five organizations in Malawi. The most is by Habitat for

Humanity of Malawi, which has issued 7,000 such loans (Manda et al., 2011).

In Bangkok, Thailand, two groups have helped families in nine canal settlement urbancommunities with housing loans through helping to facilitate community savings groups.

One is Community Organization Development Institute (CODI), which has provided

loans for upgrading of slum homes. The second is a group of local NGOS from the

Chumthonthai Foundation. Both organizations work with the national Baan Man Kong

(secure tenure) housing programme (Usavagovitwong & Posriprasert, 2006).

Equitas Birds Nest, a pilot initiative of the Equitas Development Initiatives Trust (EDIT)based in Chennai, Tamil Nadu India, has worked with nearly 100 homeless, pavement-dwelling families to identify affordable rental accommodation. Despite negotiating and

procuring a secure dwelling for each household, most clients were reluctant to move for

fear their livelihoods would be jeopardized. Prior to physical transfer, the EDIT team

provided households with skills training and assistance in establishing new livelihoods,

mostly home-based activities such as candle-making, soap-making, incense stick rolling,

and the like. EDITs clients moved into housing once they had the confidence that the

new livelihood could sufficiently replace the old one; after a 6-month moratorium, each

household assumes the rent payments on its own.

UN-Habitat, which partners with 25 MFIs to help expand affordable housing loanproducts, has established local finance facilities in Ghana, Indonesia, Sri Lanka, and

Tanzania (each capitalized with US $1.5 million) to help encourage domestic banks and

MFIs to develop sustainable housing loan products (Case, 2010).


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In Angola, Development Workshop offered their KixiCasa housing microfinance modelthrough their MFI partner KixiCrdito. Housing loans were provided to their best clients

in addition to normal bank loans on offer. Terms were for 10 months to one year and

loans ranged from $800 to $2,500. The purpose of these loans was to allow clients to

invest in their homes incrementally. KixiCrdito does check with local government

officials to ensure the clients receiving the loans are living on land that will not soon be

the target of redevelopment. Development Workshop continues to advocate for property

rights or recognition of temporary occupation rights for slum dwellers. From an initial 51

loans (80% women, 97% repayment rate), KixiCrdito expanded the KixiCasa program

to another 250 clients. This time, though, clients were not just entrepreneurs but included

civil servants and other salaried employees who had access to more stable incomes that

could be regularly garnished from the employers as needed (Cain, 2007). Also, see

Kelley and Baumann (2011) for more details.

The Working Womens Forum (WWF) in India organizes women into cooperatives.WWF was started in 1978 with 800 women. WWF now has more than 1 million members

who are co-owners of the organization. Each group of 10 women has a leader, and all

leaders are members of the governing body. The governing body works to address issues

involving gender equality, including land tenure, in both urban slums and rural

communities. Jamii Bora in Kenya has worked extensively to provide microfinance services to former

beggars and has involved gangs in rebuilding destroyed communities in urban slums after

the 2007 riots. Jamii Bora built an entire community, called Kaputiei Town, which was

started in 2003. Kaputiei Town is in a rural, former agriculture area located in Kisaju,

Kajiado District. Clients of Jamii Bora who live in urban slums are allowed to purchase

their own land/home in this town. Included in this town is a commercial and industrial

area. The costs of developing the land and infrastructure are shared between the

residential and business areas. Loans from Jamii Bora are charged between 8.5 and 10%

interest with 10- to 15-year repayment schedules. Members can live in a three-bedroom

home for a mortgage of US $32 a month (http://www.jamiibora.org/kaputei.htm).

A report from the Asian Coalition for Housing Rights (ACHR), which partners with SDI,describes a meeting of federations from Asia and Africa that noted the groups helping
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more than 40,000 families in Africa and more than 100,000 families in Asia with tenure

security through their community-based savings and credit programs (Asian Coalition for

Housing Rights, 2008).

ACTogether in Uganda has mobilized community members to leverage strength innumbers, advocating local governments for land tenure rights as well as the rights of

citizens to obtain an official address, an ID, and a passport, and to have reliable and

regular access to police and emergency services. The communities are supported to

conduct settlement profiles, mapping, and enumerations to gather valuable information

on the status of land ownership in the settlements, which enables them to engage

government and private land-owners. The communities started an urban poor fund, where

members access small loans to support land acquisition processes and land-sharing

approaches (www.actogetherug.org/program-components).

One thing MFIs have done in some countries (i.e. Kosovo, Bolivia) has been to worktoward creating credit bureaus for poor people where none had existed or linking

microfinance clients to existing credit bureaus in country (Rozycki, 2006). One of the

biggest challenges poor people in slum areas face is a lack of formal identity and legal

address that allows them to prove themselves to entities operating in the formal

economy. Credit bureaus can offer people with good track records in the informal

economy a way to leverage their good reputations to a larger audience, even the formalfinancial markets. While MFI-supported credit bureaus may not directly assist slum

dwellers with land tenure, they help hold people accountable and provide some form of

legal and formal recognition that can then be used by community groups to advocate for

greater tenure rights.

Community-Led Infrastructure Finance Facility (CLIFF) is a finance facility, supportedby the UKs Department for International Development and the Swedish International

Development Cooperation Agency that supports 29 projects in India, Kenya, and the

Philippines benefitting more than 800,000 slum dwellers. CLIFF leverages outside

funds/grants to support revolving loan funds managed by implementing partners, some of

which are MFIs. In less than 10 years, CLIFF funds have been used by local

implementers to build more than 15,000 community sanitation blocks in India while also
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supporting hundreds of other families with land tenure, relocation housing, and slum

housing improvements in India, Kenya, and the Philippines (CLIFF, 2010).


Land tenure is very much a government issue. Outside of a strong advocacy role, MFIshave limited power to change government policies and actions. Several political and

economic interests want things to remain in placesome want to protect their high-

quality, low-density land from the masses, while others benefit from extracting high rent

from slum dwellers (via bribes paid, higher rates paid for basic services like water, etc.).

If a land tenure opportunity includes having people relocate to rural areas from urbanslums to purchase their homes, it may prove difficult to garner large interest in such a

program. The urban slum problems remain for the vast majority of people, and only a few

families engage in a reverse rural to urban migration to gain land tenure.

When individual clients in a group solidarity program achieve tenure, sometimes theylose interest in helping other group members achieve the same benefit. MFIs need to

create mechanisms, like Habitat for Humanitys sweat equity (where people have to

donate a set amount of time before they are eligible to get a home), so that group

solidarity continues to work until all members have benefited.

House-related financing is different than business-related financing, requiring differentstructures and management/loan officer skill sets. MFIs may have a hard time expanding

services in this area without significant disruption to normal operations. Mortgage loans,

particularly where land title is included, require much larger capital amounts than

traditional loans for business activities. Because clients do not generate a large or fast

return on housing-related investments, interest rates generally have to be lower and loan

terms often have to be longer than what MFIs are used to providing for business loans.

These realities make it hard for MFIs to expand into these unique loan products without

additional assistance and collaborations.


Savings is a crucial mechanism for acquiring tenureand group solidarity plays animportant role in motivating people to save.


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Advocating for change is more successful in larger numbers. Group solidarity is alsogood for holding governments and individuals accountable to promises made.

When it comes to tenure, some forms of subsidies (from governments or largerorganizations) are required to facilitate the larger infrastructure shortfalls. Poor people

living on the margins of society cannot be expected to pay the full cost of urban recovery.


To help stem the tide of rural to urban migration, MFIs can advocate for governments toimprove rural services to help keep families remain anchored in rural areas. MFIs can

also establish and/or expand their own microfinance services in rural areas to improve

access to financial services for people in rural communities.

A number of the largest and most well-known MFIs in the world can use their influenceto advocate for a reduction in, or elimination of, western agricultural subsidies to improve

global agricultural equality. If rural areas in developing countries could gain greater

economic benefit from their work, there could be a significant reduction in rural to urban

migration.

MFIs, like those in East Africa, that are working with cell phone companies to offer low-cost, dependable remittance services allow urban dwellers to get more cash into the rural

areas, which can help boost the economic condition of rural dwellers. It will take time and resources to do well, but MFIs should explore partnerships with

local universities and aid agencies or government agencies to reflect on the local context.

Research is needed that can help differentiate between the areas in need of subsidies and

the areas where full-cost-recovery approaches can be used to facilitate greater land tenure

for slum dwellers.

UN Considerations: Durability of Housing and Sufficient Living Area

The UN considerations for housing durability and sufficient living area are local, context-

specific issues. Often these issues are interconnected, in that living space may be limited due to

the construction materials available to build homes, and the available building materials may, in

turn, limit the size of a home. Because of the work of organizations like Habitat for Humanity

and numerous microfinance organizations, this issue has received the most attention.


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Interestingly, even though most MFIs do not currently offer a specific housing loan, estimates

are that 20 to 30% of all current MFI business loans are used by clients for housing-related

purposes (Kelley, 2010).


The Self-Employed Womens Association (SEWA) of India, which has offered housingand infrastructure loans to its members in urban slums since the 1970s, launched a sister

organization called Gujarat Mahila Housing SEWA Trust (MHT) to improve the housing

and infrastructure conditions of poor women in the informal sector. MHT and SEWA

have partnered with a local municipality (Ahmedabad Municipal Corporation) to form

the Parivartan project. The Parivartan project has helped more than 30,000 slum dwellers

improve their physical environment. Costs and management of the project are shared

between the municipality, SEWA (and its sister organizations), and the community

members (Biswas, 2003).

PlaNet Finance is piloting a project with local MFIs in South Africa through their MicroEnergy Alliance

(http://www.reciprocity.co.za/images/stories/attach/MEA%20Teaser.pdf). The Alliance

links large suppliers of renewable energy products with community-based

microentrepreneurs. The entrepreneurs receive a loan from a MFI and then purchaseenergy-efficient products, such as solar-powered water heaters, from the larger suppliers.

The Alliance also works with MFIs that will lend to clients living in urban townships to

purchase these energy-saving products, helping to lower energy costs for slum dwellers.

The clients pay back their loans through the money they save from the energy-efficient

products, and the entrepreneur then pays back the MFI from his/her increased sales

(Chongo, 2010).

In the Philippines, a moderately successful government-led housing program called theCommunity Mortgage Program (CMP) had, by December 2008, benefited more than

200,000 Filipinos who were at risk of eviction because of the lack of secure housing and

tenure. Organized community associations partner with NGOs to develop land by

borrowing funds from the CMP at a state-subsidized interest rate. These loans last for 25

years. Groups can range from 9 to 300 people and the loans are made to the association,
http://www.reciprocity.co.za/images/stories/attach/MEA%20Teaser.pdfhttp://www.reciprocity.co.za/images/stories/attach/MEA%20Teaser.pdfhttp://www.reciprocity.co.za/images/stories/attach/MEA%20Teaser.pdfhttp://www.reciprocity.co.za/images/stories/attach/MEA%20Teaser.pdf


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so individual household financial records are not a factor in the decision. CMP manages

two kinds of projects. On-site projects allow illegal settlers to formalize claims by

purchasing land from the owners where they currently dwell. Off-site projects involve

relocation to another area (Mitlin, 2003; Llanto, 2007; Wikipedia, 2011).

ACTogether in Uganda mobilizes slum dwellers to design and construct their own modelhomes, which they show during public events to housing professional and government

workers. This allows poor people to discuss and debate what house designs are best

suited for their needs (www.actogetherug.org/program-components).

Kenya Rural Enterprise Programme (KREP) has partnered with a technologyorganization called Intermediate Technology Development Group (ITDG) to provide

loan packages to community-approved applicants to purchase low-cost housing

technologies. The applicant must contribute at least 10% of the amount borrowed, and

interest is 20% a year on a declining balance (Mitlin, 2003).


Housing construction materials and size of dwelling issues are localized. Also, theseissues are inter-connected to localized challenges involving tenure, population density,

and legal options. What may work for an MFI in one region of the country may not be

feasible in another region. And, what may work for an MFI in one country may not workfor MFIs in another country.

Material costs for slum improvements can be prohibitive. Even if an MFI can negotiatecost savings due to bulk purchases, manufacturing plants can be far away, increasing

transportation costs. Maintaining security of the building materials while building is

another major concern in slum areas.

Government regulations for home-building (often historic laws that have yet to bechanged) can make slum improvements very costly or virtually impossible.

Due to the high concentration of people in slums and the uncertainty inherent in informalemployment, MFIs must be diligent in tracking their clients repayments and cautious

about clients becoming too indebted if more than one MFI is operating in a slum area.

The recent microfinance crisis in India is an example of this dangerand many of the
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problems arose in slum areas where there was a high concentration of people (Gokhale,

2009).


MFIs should consider bulk buying of home-building products and pass those savings onto their clients interested in home improvements. Incrementalism is a term used to

describe slum dwellers who seek to improve their dwelling bit-by-bit as they can afford

improvements, even if land tenure is not secured (Bradlow, 2011).

MFIs serving clients in urban slums that need more space or improved housing shouldexplore new home loan products. These housing loans should be in addition to business

loans, and the MFI should give preferential attention to home-business clients who can

use the home loan to make improvements that will impact both their homes and their

businesses.

For MFIs that cannot legally accept savings, the MFI should find a partner that is able tocollect savings and try and organize community-group savings for housing and

infrastructure improvements. Portable ATMs might provide mobile saving services while

also functioning as cost-effective loan collection receptacles. BRAC, both in Bangladesh

and in Uganda, is exploring mobile technology communication options for slum dwellers

to acquire affordable healthcare (Davis,2011). An important book that addresses microfinance opportunities in relation to housing is

Daphnis and FergusonsHousing Microfinance: A Guide to Practice (2004).

MFIs should facilitate community mobilization among their urban slum clients toadvocate for improved government services (water, sanitation, roads, etc.) as well as

request resources to fight local crime and various levels of corruption.


Localized MFI research is needed to explore various affordable home designs, theavailability of low-cost housing materials, and various home improvement loan products

that might be utilized by slum dwellers.


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Consider the value that art might play in improving the lives of urban slum dwellers. The2010 TED winner, French artist JR, offers a way to restore a sense of dignity and

personal storytelling of the people who live in slums (Kennedy, 2010).

Conclusion

Slums, like the cities that give them birth, are organic and fluid entities. A number of complex,

interrelated pieces push and pull on peoples lives in ways that are difficult to track, understand,

or change (see Shenoy, 2011 for a case study from northern India). Indeed, a positive change in

one area can have unexpected and unwanted negative consequences in one or many other areas.

As cities around the world continue their rapid pace of growth, it is likely that the slum areas

associated with these cities also will grow. Clearly, life in these slums is hard and people will

continue to find the circumstances there challenging and difficult to change.

Beyond the multi-layered, interconnected aspects of a specific slum area are the many highly

nuanced relationships among people between rural and urban areas and between informal slums

and the more formalized parts of a city. These relationships are diverse and very complex, but

they must be considered when exploring any plans for urban slum transformation. Indeed, it may

be that the most cost-effective, practical, and successful way for MFIs to help transform the livesof people living in urban slum areas is to expand dynamic, useful, and effective microfinance

services to more people still living in rural areas. If MFIs operating in rural areas can offer the

necessary and desired financial products and services for a community, they may help stem the

flow of rural to urban migration, thus reducing the growth pressures on informal slums and

helping the existing slum dwellers.

That said, there is a role for urban-based MFIs to serve populations living in urban slum areas.

Sustainable, pro-poor microfinance institutions can create products and services that help slum

dwellers gain better access to water, sanitation, housing, and even tenure. The work will not be

easy and will require an MFI to have a collaborative and patient spirit to work effectively with

communities, governments, and other organizations. MFIs and their staff will need to be flexible

in their product and service offerings, while remaining disciplined in their customer service


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operations and fiscal responsibilities. In several countries, support networks, from donors to local

government agencies, are looking for ways to partner with MFIs and leverage the MFIs

financing expertise to fund new service and product endeavors. MFIs that want to serve

vulnerable and marginalized people in urban areas will find that the tools of microfinance, if

used carefully and properly, can be effective and transformative vehicles in the lives of poor

people living in slums.


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Appendix A Global Agencies and Authors Working on Slum Issues

While the issues confronting slum living are complex and the solutions challenging, there are

organizations and researchers trying to address these issues on behalf of the global community.

Below are some key organizations and authors exploring the big picture issues of slums and

also conducting the latest research and reporting on key slum issues.

Global Agencies

A significant resourc

Documents

Rob Gailey_Rebecca Harver_How can Microfinance Contribute to Restoring Dignity and Transforming Lives in Urban Slums?