A look at Global Migration Problems

In this
Gender and
microfnance......................... 8
The German example............11
Nobel laureate..................... 14
Kumari Selja ........................15
Pakistan feld dispatch..........20
March 2007 • Vol. 13, No. 1
Financing for the
urban poor
2 Habitat Debate March 2007
he year 2007 marks a historic cross-
roads in human history because it is
the year in which, for the first time, half
of humanity will be living in towns and
We are at the dawn of the new urban
era. And our research shows that by 2030,
this figure will rise to two-thirds. We thus
live at a time of unprecedented, rapid, ir-
reversible urbanisation. Te cities growing
fastest are those of the developing world.
And the fastest growing neighbourhoods
are the slums. Indeed, 2007 will also be
the year in which the global number of
slum dwellers is forecast to reach the 1 bil-
lion mark.
It is patently clear to all of us in the
United Nations system as a whole, that
if we fail to achieve the Millennium
Development Goals in towns and cities,
we will simply fail to achieve them at all.
But it comes down to a question of
reaching as many people as possible. A
cornerstone of UN-HABITAT’s new
Medium-term Strategic and Institutional
Plan is partnerships. We have no choice
but to catalyze new partnerships between
government and the private sector.
Tis is the only way to finance infra-
structure and housing at the required
scale – the scale needed to stabilize the
rate of slum formation, and subsequently
reduce and ultimately reverse the number
of people living in life-threatening slum
Yet there is every likelihood that in the
coming 20 years, conventional sources of
funds will simply be unavailable for in-
vestment at the scale required to meet the
projected demand for urban infrastruc-
ture and housing.
Many countries around the world con-
tinue to face deficits in public budgets
and weak financial sectors. Local govern-
ments have started to seek finance in na-
tional and global markets, but this is only
in its initial phase.
New mortgage providers have emerged,
including commercial financial institu-
tions and mortgage companies. But only
middle and upper income households
have access to such finance, while the
poor are generally excluded.
Although social housing is becoming
less important in Europe and in countries
with economies in transition, the need to
provide shelter that is affordable to low-
income households still exists, including
in developing countries.
Te majority of urban poor households
can only afford to build incrementally in
stages, as and when financial resources be-
come available. In response, microfinance
institutions have started lending for low-
income shelter development and have be-
come very important in the last decade.
Guarantee schemes can, by providing
credit enhancement, go far in broadening
the appeal of microfinance institutions to
lenders. Another important trend in the
last decade is community funds, which
are often linked to housing cooperatives
as well as rotating savings and credit so-
cieties. Community-based financing of
housing and services has been used for
both settlement upgrading and for build-
ing new housing on serviced sites. Tese
funds have many advantages for low in-
come households because of the success of
small loans and the increasing urbaniza-
tion of poverty.
Constraints to mobilizing financial re-
sources for investment in shelter develop-
ment are both financial and non-financial
in nature. Non-financial constraints in-
clude land legislation that makes it diffi-
cult to use real estate as effective collateral,
as well as inappropriate national and lo-
cal regulatory frameworks governing land
use, occupancy and ownership.
Finance is only one dimension of secur-
ing sustainable solutions that can fill the
gap between the two extremes of current
processes: inadequate, affordable shelter;
and unaffordable adequate shelter.
Experience in both developed and de-
veloping countries shows that such efforts
contribute effectively to the objective of
reducing poverty by creating jobs, attract-
ing investments, improving health and
raising economic productivity. Such ef-
forts typically include:
n Good urban management, planning
and governance to ensure that all cit-
izens, particularly women, the young
and the elderly, have a strong voice in
decisions that affect their lives;
n Efficient land markets and property
administration that prevent land spec-
ulation and urban sprawl and provide
sufficient affordable land for the urban
n Enforceable zoning and land use reg-
ulations that facilitate compact and
mixed-use urban development and re-
duce the ecological footprint of cities;
n Affordable and environmentally sound
infrastructure including transport, en-
ergy, water and sanitation;
n Financial markets and systems that can
provide affordable housing credit and
long-term municipal finance.
As the only United Nations body vest-
ed with responsibility for promoting the
sustainable development of the built en-
vironment, UN-HABITAT needs all the
support it can garner for its new reform
Part of the overall reform of the United
Nations, this plan covering the years
2008-2013, provides a new shared vision.
It is forged in the collaboration of all par-
ties, from Governments to Local author-
ities and other Habitat Agenda partners,
to the beneficiaries themselves.
UN-HABITAT sees a way forward in
five key areas of focus: advocacy, monitor-
ing and partnerships; participatory urban
planning, management and governance;
affordable land and housing; environmen-
tally-sound and affordable basic infrastruc-
ture and services; and, most importantly,
strengthening human settlements finance
Anna Tibaijuka
Executive Director
A Message from the Executive Director
3 Habitat Debate March 2007

Cover Photo
Slum area in Bukit Duri, Jarkata, Indonesia
Photo © Suzi Mutter 2005
Roman Rollnick
Editorial Assistance
Tom Osanjo
Design & Layout
Irene Juma
Editorial Board
Vincent Kitio
Lucia Kiwala
Anantha Krishnan
Eduardo López Moreno
Jane Nyakairu
Edlam Yemeru
Mariam Yunusa
Published by
P.O. Box 30030, GPO
Nairobi 00100, KENYA;
Tel: (254-20) 762 1234
Fax: (254-20) 762 4266/7,
762 3477, 762 4246
Telex: 22996 UNHABKE
Website: http://www.unhabitat.org/
ISSN 1020-3613
Opinions expressed in signed articles are those of the authors and do not necessarily
reflect the official views and policies of the United Nations Human Settlements
Programme (UN-HABITAT). All material in this publication may be freely quoted or
reprinted, provided the authors and Habitat Debate are credited.
A MESSAGE FROM THE EXECUTIVE DIRECTOR ............................................2
OVERVIEW Financing for the urban poor..............................................4, 5
FORUM Three things we should know about slums.......................6
Employer-provided housing fnance....................................7
Gender and microfnance .........................................................8
Promoting inclusive and efective local economic
development .................................................................................9
Microfnance for the world’s poorest people..................10
SPECIAL REPORT Financing for urban development in the
OPINION Home-fnancing in Africa........................................................11
Economic growth, rapid urbanisation and
Nobel laureate says ..................................................................15
CASE STUDIES The municipal fnance system in Germany.....................16
Financing in action - the Jamii Bora Trust Kenya...........17
BEST PRACTICES ....................................................................18,19
FIELD REPORT Building back better in Pakistan...........................................20
NEW PUBLICATIONS ...................................................................21
NEWS & EVENTS ..............................................................22,23
4 Habitat Debate March 2007 OVERVIEW
n an era of neo-liberal econom-
ics predicated on market-led
growth, interest in financing reflects
recognition of the limits of public
expenditure. It also reflects the fail-
ure of public planning and deliv-
ery systems to keep pace with rapid
urbanization. It further reflects the
initiatives of non-State actors to in-
crease the supply of housing and
infrastructure in the absence of ade-
quate public intervention.
Te shift in emphasis from pub-
lic to private sources of finance rais-
es questions about the role of the
State in housing and urban devel-
opment and, by extension, about
the future policies of international
development cooperation agencies
and financial institutions.
In the 1970s, most member
States in the developing world ex-
perienced in the 1970s an econom-
ic and political crisis that led many
to implement structural adjustment
policies in the next decade. Governments
devalued their currencies to promote ex-
ports, eliminated price supports, aligned
their economies with global markets, cut
public expenditures on social services,
privatized state-owned enterprises, and
liberalized financial markets.
National housing corporations in many
countries either collapsed or scaled back
operations. Public expenditure on hous-
ing dropped, as did public investment in
urban infrastructure. By the 1990s, pub-
lic finance for housing and urban infra-
structure was all but eliminated, save ad
hoc programmes of development coopera-
tion agencies and NGOs designed to min-
imize the social consequences of structural
Te advent of rapid urbanization coin-
cided with economic crisis and structural
adjustment. First in Latin America, then
in South and Southeast Asia, and more
recently in Africa, rural-urban migration
combined with population growth to in-
crease the size of cities. Urbanization with-
out requisite economic growth resulted in
urban unemployment; urbanization with-
out public services resulted in inadequate
shelter, water and sanitation; urbanization
without economic growth and public ser-
vices resulted in the urbanization of pover-
ty and slums. Municipal authorities barely
capable of meeting their payrolls, were
vulnerable to corruption, unable to col-
lect revenues, or plan, let alone finance the
burgeoning housing and service needs.
Te demand for services in the absence
of public supply created two types of in-
novation and corresponding sources of fi-
nance: Private entrepreneurs who saw in
slums a business opportunity and urban
poor organizations keen to improve their
living and working conditions. Te entre-
preneurs built shacks without services for
rent, or provided unofficial services (wa-
ter, credit, sanitation, electricity, security,
etc.). Rates were calibrated on capacity to
pay, small unit provision, high unit cost,
and on high volume.
Te organized poor mobilized sav-
ings and acted collectively or individual-
ly to secure land, build homes, and gain
access to services. Microfinance institu-
tions emerged to offer credit to entrepre-
neurs and the organized poor. Rather than
rely on public finance, slums generated in-
vestment, fostered rent-seeking op-
portunities and offered a source of
cheap labour to industry, upscale
residential neighbourhoods and the
central business districts.
Te combination of structur-
al adjustment, rapid urbanization,
weak municipal planning and ser-
vices, and distinct slum economies
has created conditions for radical
changes in the formal private sector
– and hence, a new source of finance
for housing and urban infrastruc-
ture. Te banking sector and private
utility companies are two important
examples of finance. Te flip side of
structural adjustment has been that
banks have grown in number with
the advent of market liberalization,
privatization and related financial
sector reforms.
While many banks have confined
lending to traditional, higher-in-
come markets, others have diversi-
fied lending to reach rapidly growing
urban populations, building upon prec-
edents set in slums by entrepreneurs and
urban poor organizations. Innovation of
this kind has been accelerated by compe-
tition among banks for traditional, high-
er-income markets, the lucrative business
of microfinance, and downward pressure
on interest rates. Primary mortgage in-
stitutions have also emerged especially in
countries with established domestic capital
markets that can subscribe to debt instru-
ments as a source of long-term financing
so essential for housing finance.
For private service providers, structural
adjustment has had unanticipated conse-
quences in countries with rapidly expand-
ing urban populations. Privatized utility
companies see in slums a large, untapped
market—a population of slum dwellers
who pay more per unit cost of service than
higher income households. By working
with entrepreneurs and urban poor orga-
nizations, private utilities are developing
innovative systems to extend their services
to slum dwellers and the urban poor.
Te shift from public to private sourc-
es of finance for housing and urban infra-
structure in cities of Africa, Asia and Latin
Financing for the urban poor
Tui »a\ uousixc axo uinax ixiiasriucruii aii iixaxcio is a roiic oi iixi»io oinari axo a souici oi
ciiarivi ixxovariox, »iiri Cnnis Wiiiiaxs, Poiiricai Aovisoi, axo Nicnoias You, Siiciai Aovisoi ox Poiic\
axo Sriaricic Piaxxixc, noru ix rui Oiiici oi rui Exicurivi Diiicroi ar UN-HABITAT. Hiii rui\ ixaxixi
iixaxcixc ix Aiiica, Asia axo Larix Axiiica, »uiii rui oixaxo ioi suiirii axo nasic siivicis iai oursriiis
suiii\, axo »uiii xosr uinax ioiuiarioxs iivi ix siuxs.
Paragraph 47 of the Habitat Agenda
commits member states to:
“… strengthening existing financial
mechanisms and, where appropriate,
developing innovative approaches for
financing the implementation of the Habitat
Agenda, which will mobilize additional
resources from various sources of finance –
public, private, multilateral and bilateral
– at the international, regional, national
and local levels, and which will promote the
efficient, effective and accountable allocation
and management of resources, recognizing that
local institutions involved in micro-credit may
hold the most potential for housing the poor.”
Commitments on shelter fnance,
Habitat Agenda, 1996
5 Habitat Debate March 2007 OVERVIEW
America would suggest that governments
no longer have a significant role to play
in financing human settlements devel-
opment. On the contrary, the role of the
State has never been more pertinent. Only
government policy, public investment and
municipal planning can ensure financial
sector reforms that translate into private
investment in affordable housing and ba-
sic services.
Government legislation on pension
funds, for example, can create a source of
long-term capital and trigger institutional
investment in debt instruments to finance
municipal infrastructure and/or mort-
gage facilities. Targeted public investment
is also crucial. It is estimated that 30 per-
cent of the cost of home construction is
made up of expenditure in water and san-
itation. By dedicating public expenditure
to infrastructure, the State can spur mas-
sive private investment in housing—a vol-
ume of shelter hundreds of times greater
than could be constructed by government
funds. Municipal planning is a pre-requi-
site for mainstreaming private investment,
particularly approaches to planning that
build upon, rather than exclude the dyna-
mism of the slum economy and the inte-
gral role it plays in urban development.
Te change in the way affordable hous-
ing and urban infrastructure is financed at
country level has significant implications
for development cooperation. Official de-
Paragraph 48 of the Habitat Agenda commits member states to:
(a) [Stimulating] national and local economies through promoting economic development, social development
and environmental protection that will attract domestic and international financial resources and private
investment, generate employment and increase revenues, providing a stronger financial base to support
adequate shelter and sustainable human settlements development.
(b) [Strengthening] fiscal and financial management capacity at all levels, so as to fully develop the sources of
(c) [Enhancing] public revenue through the use, as appropriate, of fiscal instruments that are conducive to
environmentally sound practices in order to promote direct support for sustainable human settlements
(d) [Strengthening] regulatory and legal frameworks to enable markets to work, overcome market failure and
facilitate independent initiative and creativity, as well as to promote socially and environmentally responsible
corporate investment and reinvestment in, and in partnership with, local communities and to encourage a
wide range of other partnerships to finance shelter and human settlements development.
(e) [Promoting] equal access to credit for all people.
(f ) [Adopting], where appropriate, transparent, timely, predictable and performance based mechanisms for the
allocation of resources among different levels of government and various actors.
(g) [Fostering] the accessibility of the market for those who are less organized and informed or otherwise
excluded from participation by providing subsidies, where appropriate, and promoting appropriate credit
mechanisms and other instruments to address their needs.
velopment assistance will never finance the
massive housing and service deficit in cit-
ies in Africa, Asia and Latin America, nor
should it.
Te accumulated savings and purchasing
power of urban poor and the capital housed
in pension funds and among private inves-
tors as well as dedicated public investment
constitute sources of finance that make offi-
cial development aid pale by comparison.
Te future of development cooperation
is to channel funds in ways that accelerate
the actions of local actors to harness these
sources of finance. Tis includes a combi-
nation of targeted technical assistance and
credit enhancements, equity investments,
and bridging finance that preferably can
build local capacity and leverage multiple
sources of finance.
It also involves creative partnerships be-
tween multilateral and bilateral develop-
ment agencies and international finance
institutions geared toward fast-tracking in-
vestment for infrastructure.
More fundamentally, development co-
operation will require coming to terms
with the social and economic consequenc-
es of rapid urbanization and addressing ur-
ban poverty by drawing on the potential of
innovations in financing.
Newly completed houses, self-build housing project Jinja, Uganda 2005. Photo: © Suzi Mutter
6 Habitat Debate March 2007 FORUM
ccording to UN-HABITAT, slums
represent one-third of the world's ur-
ban population. Tis ratio is not going
down in spite of all political declarations
and official commitments. Why? Why do
slums exist? Are they a planning mistake?
Do they reflect the inefficiency or mal-
functioning of land markets?
Let’s think for a second why we have so
many slums and shanty towns. Of course,
we know: slums are the best way found by
many countries to provide cheap housing to
the urban poor. And cheap housing means
a cheap labour force, low-income workers.
Slums are the physical expression and con-
dition of urban poverty: in many countries
they are necessary to ensure profitable eco-
nomic growth!
Before being a problem, slums are there-
fore a solution at a particular stage of eco-
nomic development. Tey were a solution
in Victorian London as they are a solution in
Mumbai today. Slums are not a market fail-
ure, they are a market success. Tis is the first
thing we should know about slums: they are
economically useful, sometimes extremely use-
ful, because they offer low-cost housing options
to the poor.
But all informal settlements are not equal-
ly squalid. In Latin America, Southeast Asia,
Sub-Saharan Africa, and the Indian sub-con-
tinent, slums are very different, particularly
in terms of overcrowding.
Some are built on public land, some on
private land, some are squatter settlements,
and others provide rental housing options.
Some areas are extremely dense (3 people
or more sharing a small bedroom and more
than 1,000 persons per ha). For instance in
South Asia, 150 million people live in over-
crowded units. In West Africa on the other
hand, most slums have relatively low densi-
ties (less than 500 persons per ha).
Te degree of shelter deprivation is di-
rectly correlated to the degree of urban in-
equities. Tus the worst slums are found in
the most inequitable cities. Tese are cities
where the poor pay more than the rich for
land and urban services, where land is mo-
nopolized by the upper classes, the cities that
are physically divided into poor areas and
gated communities.
Te existence of slums is always a re-
flection of urban poverty but the intensity
of shelter deprivation is usually a reflection
of urban inequity. For example, Nairobi is
richer than Kinshasa but more than 50 per-
cent of its population lives in slums - the
same percentage as in Kinshasa. Nairobi’s
slums are worse than those of Kinshasa, be-
cause Nairobi is more inequitable than the
Congolese capital. Nairobi’s poor slum
dwellers are squeezed into only 5 percent of
the total city area. Te largest slum, Kibera
occupies less than 1 percent of the city area
and accommodates 20 percent of the city
population. Its density reaches 3,000 per-
sons per ha. Tis is the second thing we
should know about slums: they are a manifes-
tation of social injustice, a reflection of a social
divide which excludes the poor from the bene-
fits of urban life.
But the urban poor are not only victims,
they are also actors. In fact slums and in-
formal settlements demonstrate everyday
how the urban poor fight for survival, how
they innovate, how they find resources and
energy, how they create their own employ-
ment opportunities and transform their
In some cities they form com-
munity groups to defend their interests.
Slum-dwellers may be the most dynam-
ic “entrepreneurs” of our time – the real
“Private Sector” about which we talk so
much. Good at survival strategies, slum peo-
ple rarely reach the accumulation and devel-
opment stage. Tey need support, or at least
they need to be left alone, away from public
Slum life shows that the concentration
of people in cities is in itself a positive de-
velopment factor, simply because concentra-
tion means more exchange, more markets,
more opportunities, and more risks. Tis is
the third thing we should know about slums:
they are a manifestation of human resilience,
a reflection of social dynamics, of fantastic hu-
man energy. Sometimes they are places of
solidarity, often they are places of urban vi-
olence, always they are places of urban life,
of multiple struggles for survival and human
From these three points, we can derive a
few basic principles for the reduction of ur-
ban poverty. Firstly, the absolute necessity
to adopt a holistic approach to address urban
development challenges. Tis means bring-
ing together policy makers from economy
and finance ministries with housing and lo-
cal government departments, to ensure that
the key contribution of urbanisation to eco-
nomic development is well understood, that
resources are properly mobilized and allocat-
ed, that employment policies are associated
with slum upgrading policies. In a word this
means advocacy campaigns to strengthen or
create enough political will at all levels.
Much remains to be done. Only a few
governments have a comprehensive slum up-
grading strategy, national targets are rarely es-
tablished and the Millennium Development
Goals are largely ignored. We should pop-
ularize success stories demonstrating that
good policies bring economic and social
Te second principle is affirmative ac-
tion to secure the urban poor access to
land, housing, credit and basic services.
Tis means identifying urban inequities
in these areas and correcting them. Te
poor should pay less, not more, than the
wealthy for the comparative benefits of
city life. Inequity should be replaced by
solidarity, the divided city by the inclusive
city. Of course political will is required
but technical solutions are available, they
have been tested, they work.
Te third principle – participatory and
transparent governance – is the means to de-
liver on any dimension of urban development,
on the three components of sustainable de-
velopment (economic, social and ecological).
Efficiency in municipal finance (resource mo-
bilization and allocation) constitutes one of
the best indicators of good urban governance.
Since the Istanbul City Summit of 1996 this
third principle is widely accepted in the inter-
national arena. But it needs to be implemented
more systematically at country level.
Indeed, a number of governments have
adopted reasonable and effective urban poli-
cies in the last 10 years. South Africa, Brazil,
Mexico, Egypt, and China come to mind.
In the meantime, international assistance to
urban development has remained stagnant, but
this has had little impact on these large middle-
income economies which can work on their
own. Te urban crisis is now concentrating on
the Least Developed Countries which are ur-
banizing rapidly without sufficient institution-
al resources. Tese countries should be the top
priority of the UN system.
Three things we should know about slums
Siuxs aii icoxoxicaii\ usiiui, a iiiiicriox oi rui uinax sociai oivioi, axo a nioiocx oi uuxax iisiiiixci.
Axo »iiris Daxiri Biau, Diiicroi oi UN-HABITAT’s Ricioxai axo Ticuxicai Cooiiiariox Divisiox, rui\
aii xor a xaixir iaiiuii, nur a xaixir succiss…
7 Habitat Debate March 2007 FORUM
mployer-provided housing played
a major role in accommodating the
work force in European cities as a result
of the industrial revolution. It was aimed
at improving the productivity of employ-
ees because employers realized that well
housed employees were healthier, better
rested and more disciplined – all of which
enhanced labour productivity.
Employers also provided housing that
was predominantly rental, hence, rent
was deducted from salaries. Te availabil-
ity of land close to factories was an add-
ed opportunity for workers to live nearby.
In addition, some governments provid-
ed increased fiscal incentives by allowing
high rates of depreciation on housing in-
vestments which made housing produc-
tion even more attractive and profitable
to companies.
In the post-war period, companies
provided low-interest, long-term hous-
ing loans for workers to buy or build their
own homes, or to buy the homes they
were renting, an approach often referred
to as employer-assisted housing.
Governments in Western Europe also
invented a whole range of housing pol-
icies focusing on income tax relief for
prospective home owners, for housing co-
operatives, and subsidies for developers
of social housing. Although these poli-
cies seem to have responded to the hous-
ing crisis in Western Europe since the mid
1970s, their success was also a function of
increased incomes.
In the United States, employer-assisted
housing became a well-known practice at
the beginning of the 1990s when relative-
ly high economic growth in some regions
resulted in a shortage of labor owing to
a general shortage of housing combined
with high housing costs. Employers decid-
ed to provide assistance to their employees
by helping homeowners with down-pay-
ments and closing costs. Employers also
partnered with housing finance com-
panies as guarantors which essentially
reduced mortgage costs. For renters, sup-
port was provided in the form of initial
deposits or a monthly fixed contribution
towards rent payment.
Efforts towards employer-assisted
housing resulted in the Housing America’s
Workforce Act 2005. It provides incen-
tives to increase private sector investment
in housing through tax credits to employ-
ers who contributed towards employee’s
home purchase, as well as rental assis-
tance. Housing assistance is also regarded
as a non-taxable benefit, similar to health,
dental and life insurance.
In developing countries, housing fi-
nance is severely constrained because
of prevailing or perceived high default
risk. Tese risks limit lending to high-in-
come groups and also increase mortgage
costs considerably. With financial lib-
eralization, housing finance institutions
are increasingly resorting to the employ-
er-employee contractual relationship, and
using security of tenure as a form of risk
reduction as well as a source of guarantee
for loans. Lenders view the relationship
between employer and employee as the
collateral to ensure loan repayment.
Tis approach still occurring on an
ad hoc basis could have a better impact
if approached in a more comprehensive
and systematic manner. Te government
should support the mainstreaming of this
approach by developing specific tax in-
centives for the employer.
Te concept can also be applied to
slums. In Kenya, for instance, in the
Kibera slum, approximately 20-30 per-
cent of the slum dwellers have regular
formal sector employment. Such an ap-
proach could provide an alternative sup-
ply of housing, reduce the rate of growth
and overcrowding in slums, while provid-
ing low-income earners with an opportu-
nity to own a tangible asset.
Tis can only be achieved if the gov-
ernment takes up that important task of
adopting appropriate housing policies
and legislation, and fiscal measures to en-
courage employers to help their employ-
ees finance their housing.
Lessons from developed countries in-
dicate the important role played by em-
ployer provided and employer assisted
housing. Tese lessons can prove to be
significant in the growth of affordable
housing finance in developing countries.
Its wider application, that is, in order to
reach the low-income groups including
slum dwellers is only possible if govern-
ment adopts a more holistic approach to
housing and urban development, rather
than the current piece-meal application of
sectoral policies that fail to reconcile busi-
ness and economic development with the
welfare and productivity of people, and
their housing needs in particular.
Employer provided housing finance
Tui »ioisiiiao iioiiiiiariox oi siuxs aiiicrixc xax\ oiviioiixc couxri\ ciriis is xor a xi» iuixoxixox
ix icoxoxic axo sociai uisroi\. Tui iari 1,ru axo iaii\ :oru cixrui\ sa» ciiar sociai cuaxci ix rui
U.K. axo Coxrixixrai Euioii causio n\ uxniaianii iivixc coxoirioxs, isiiciaii\ axoxc rui ixousriiai
»oixioici. Guixrii Kaii, a UN-HABITAT ixiiir, axo Maicaiir Gacuuiu, a iicruiii ar rui Uxiviisir\ oi
Naiioni, sa\ a xa;oi iacroi ruar coxriinurio ro rui nirrii uousixc »as rui ioii iia\io n\ ixiio\iis.
Housing in Sheikh, Somalia . Photo: © UN-Habitat
8 Habitat Debate March 2007 FORUM
Gender and microfinance: one step forward, two
steps back?
Micioiixaxci is »ioii\ iicaioio as a ‘xacic nuiiir’ caianii oi iisoivixc ax aiia\ oi oiviioixixr iioniixs
ixciuoixc ioviir\, cixoii ixiquaiir\ as »iii as iixaxcixc oiviioixixr iiox rui norrox-ui, »iiris Kavira
Darra, a iicruiii ix rui Diiairxixr oi Giociaiu\, Quiix Mai\, Uxiviisir\ oi Loxoox. Yir, »uiii a iocus
ox »oxix uas oirix niix ixriiiiirio as iiiusriarixc rui caiacir\ oi xicioiixaxci iiociaxxis ro iioxori
»oxix’s ixio»iixixr, ir is ixioiraxr xor ro coxiiari rui r»o.
uch is the popularity of microfinance,
that 2005 was named the UN Year of
Microfinance, while the founder of the
Grameen Bank, Professor Mohammed
Yunus, was awarded the Nobel Prize in
2006. Perhaps unsurprisingly then, a di-
verse range of organisations are involved in
these programmes including international
financial institutions, bi-lateral donor agen-
cies, national governments, civil society,
banks and other financial organisations.
In turn, women have emerged as key
targets of microfinance programmes.
In their 2002 report for UNIFEM,
Empowering women through microfinance,
Susy Cheston, Senior Vice President of
Policy and Research for Opportunity
International and Executive Director
Emeritus of the Women’s’ Opportunity
Fund, and Lisa Kuhn, Program Analyst
for Opportunity International, note that
women’s access to microfinance has in-
creased substantially over the last ten years.
As such, women account for nearly 14.2
million (or 74 percent) of the 19.3 million
poor people being served by microfinance
institutions. Yet, while a focus on women
has often been interpreted as illustrating
the capacity of microfinance programmes
to promote gender equality and wom-
en’s empowerment, it is important not
to conflate the two, says Susan Johnson
in an article in the European Journal of
Development Research in 2005. Even while
microfinance programmes target women
explicitly, they do so for a variety of rea-
sons reflecting quite diverse understand-
ings of gender and resulting in a variety
of gender outcomes, including potentially
the disempowerment of women.
Linda Mayoux, in her work, Women’s
empowerment through sustainable micro-
finance: rethinking ‘best practice’ (2005),
identifies three different approaches to mi-
crofinance even while acknowledging that
there are considerable over-laps between
them. Tey are the financial self-sustain-
ability, poverty alleviation and feminist
empowerment paradigms.
Taking these in turn, the financial sus-
tainability model is essentially premised
upon a liberal perspective that gender in-
equalities are harmful for economic growth
and development. Proponents argue that
increasing women’s access to financial re-
sources has two inter-related positive im-
pacts: it enhances women’s productivity
and the overall economic development of
communities and countries in the Global
South. Te efficiency and sustainability of
programmes which target women also un-
derwrite the interest in extending financial
services to them. Research indicates that
schemes which target women have poten-
tially higher repayment rates.
As such, one could argue that this ap-
proach essentially focuses on women due
to an interest in economic growth, finan-
cial sustainability and efficiency, and is
driven by what women can do for micro-
finance and development rather than the
other way around.
Te poverty alleviation approach is based
upon a consensus that meanings, experienc-
es and processes of poverty are fundamentally
gendered. Te 1995 UN Human Development
Report estimated that 70 percent of the world’s
1.3 billion poor were women and led to the
coining of the phrase the feminisation of poverty.
Widely popularised by subsequent internation-
al women’s conferences, the prevalence of pov-
erty among women informs the Millennium
Development Goals which centred upon the
need to eradicate poverty.
While more recent research has identi-
fied key deficiencies in the feminisation of
poverty thesis, the aim of microfinance to
extend financial services to the poor means
that a focus on women is justified on the
grounds that it can reduce their vulnerabil-
ity to poverty. At the same time, women’s
greater investment in the household which
is partly attributable to a ‘feminisation
of responsibility and obligation’ (Sylvia
Chant 2006) also means that targeting
women has potentially beneficial impacts
upon their dependents and households.
Arguably, the focus on women here is
also related to wider concerns about pov-
erty rather than women or gender relations
per se. As Ms. Johnson argues, gender rela-
tions determine the effects that loans have
on women, some of which may work in
favour of women while others may not.
Furthermore, neo-liberal restructuring
means that women’s responsibilities and
duties within and beyond the household
have intensified, adversely affecting their
Finally, and perhaps most significantly,
the feminist empowerment paradigm ex-
plicitly views microfinance as an effective
entry point to achieving gender equality
and women’s empowerment. Tis view-
point is supported by the Convention on
the Elimination of Discrimination Against
Women (CEDAW) and the Beijing
Platform for Action (BPFA). It is also
firmly rooted in initiatives located in the
Global South including the Self Employed
Women’s Association in India with pro-
grammes attempting to address both mac-
ro- and micro-level obstacles to gender
But the challenge remains of how eco-
nomic empowerment can be linked to
wider social and political empowerment,
and whether ironically, increasingly wom-
en’s access to economic resources endan-
gers their existing networks while also
taking them away from other social and
political activities.
As such, significant challenges remain
in realising the potential of microfinance
to promote greater gender equality and
empowerment. Tere must be a renewed
initiative to move away from simply tar-
geting women to explicitly focusing on
gender roles, relations and empowerment
which must be the starting point of all
Te aim of microfinance to
extend financial services to
the poor means that a focus
on women is justified on the
grounds that it can reduce
their vulnerability to poverty.
9 Habitat Debate March 2007 FORUM
Figure 1: ‘Objective’ Based vs. Traditional Approach to LED
Promoting inclusive and effective local economic
development - A strategic planning approach
Tui iiosiiiir\ axo »iiiaii oi ciriis oiiixo ox ruiii aniiir\ ro ixiioir susraixanii icoxoxic oiviioixixr
axo ro xixixisi rui iioniixs associario »iru cionai icoxoxic ixriciariox axo uinax cio»ru. Tuis xaxis
sriaricic ruixxixc axo iiaxxixc ioi Locai Ecoxoxic Diviioixixr (LED) ciuciai »iiri UN-HABITAT
Huxax Sirriixixrs Oiiicii Guiriar Krnrnr axo Wiiiiax Tnousnair, Piisioixr oi EcoPiax Ixriixarioxai
ix Caxaoa.
ound economic development strategies
constitute one of the key pillars of sus-
tainable local development.
One reason for the recent gains in pop-
ularity of Local Economic Development
is the fact that it is evolving past the tra-
ditional economic development model that
focused almost exclusively on promotion,
attracting investment and strengthening of
physical infrastructure.
It is emerging as a new model that in-
tegrates economic, social and environmen-
tal objectives; a system where all types of
community capital (human, social, cultur-
al physical, economic, and natural) are in-
cluded and strengthened. It is a process
that integrates the soft infrastructure, such
as local business and entrepreneurial sup-
port, leadership, partnerships, networks,
capacity building and innovation with the
hard infrastructure – buildings, commu-
nications and transportation. It takes into
account the role of natural capital that sup-
ports economic activity – resources, ecosys-
tem services (e.g., clean water, flood control
from wetlands and forests) and other envi-
ronmental values.
It places a stronger focus on the ba-
sic conditions required for development,
the comparative advantages of an area,
and the economic needs of local citizens
and businesses. Key aspects include a thor-
ough understanding of the economic fab-
ric of a local area and the key forces for its
LED is now defined as a participatory
process in which local people work togeth-
er to stimulate local commercial activity,
resulting in a resilient and sustainable econ-
omy. It helps create jobs and improve the
quality of life for everyone, including the
poor and marginalized. Local economic de-
velopment encourages the public, private
and civil-society sectors to establish part-
nerships and collaboratively find local solu-
tions to common economic problems.
Its strategies embrace local values for
poverty reduction, basic human needs, lo-
cal jobs, social and environmental integra-
tion; it utilizes economic drivers forged in
value-added resource use, local skills train-
ing, retention of income, regional cooper-
ation; and it considers development in the
role of structural change, and the quality of
Traditional approaches that are not stra-
tegic generally rely on identifying problems
and then choosing solutions that address
those problems. When issues are used to
elucidate ‘community objectives’ as a key
step driving the new development, two es-
sential outcomes result: more creative al-
ternatives are developed that have a greater
chance of consensus-based, broadly sup-
ported and workable solutions; and sus-
tainable, systemic and long-lasting change
is achieved, as opposed to quick fixes.
Te engagement of stakeholders is es-
sential to develop community objectives. A
process centred on properly defined com-
munity objectives ensures that the activities
taken under the aegis of LED are founded
on community values.
For LED to succeed, there are a num-
ber of conditions which need to be met.
Local commitment, especially that of the
political leadership is critical. Bringing in
the right people and resources requires a lo-
cal champion. Appropriate tools for infor-
mation gathering, assessment and analysis
should be carefully selected and calibrated
to ensure that important aspects of the local
economy are covered, and understood.
In the context of many developing
countries, for example, the role of the in-
formal economy is so crucial, its inclusion
is a must. Like all planning exercises, stra-
tegic planning is worthless unless translat-
ed to implementation. Te LED process is
meant to be action oriented. Often there
is “hanging-fruit” to be reaped with less
challenging or controversial interventions,
and these could provide a stepping stone to
move to the more complex and demanding
ones as well as providing the necessary vis-
ible results to keep stakeholders and citi-
zens engaged.
Tere are significant economic develop-
ment opportunities to be gained by cutting
red tape, removing barriers to business and
the informal sector and creating account-
able and transparent governance structure,
and generally by addressing market and
government failures.
Creating this business-enabling envi-
ronment is as important for local entrepre-
neurs as it is for outside investors. Te LED
strategic planning from this perspective is
both a framework and catalyst for action.
Ultimately, the measure of success in LED
revolves around focus, innovation, and im-
plementation, and its impact on the lives
of the citizens, including the poor and the
10 Habitat Debate March 2007 FORUM
Microfinance for the world’s poorest people
Tui »oiio’s uinax ioiuiariox is ixiicrio ro ixciiasi oiaxaricaii\ n\ ovii 8oo xiiiiox uousiuoios
nir»iix :oo¡ axo :o¡o. Ix iiiicr, ruis ixiiiis ax aviiaci oaii\ ixciiasi oi 1oo,ooo uousiuoios ix uinax
aiias. Tuis airicii »as iiiiaiio ox rui nasis oi UN-HABITAT’s :oo¡ Gionai Riioir ox Huxax Sirriixixrs
ixririio ‘Fixaxcixo Unnax Snrirrn’.
ities around the world, especially
those in developing countries where
the bulk of urban growth will occur in
coming decades, are faced with the un-
precedented challenge of providing ade-
quate shelter for their inhabitants.
Shelter has become a commodity for
increasing numbers of low income ur-
ban households, especially those in urban
areas of developing countries. Yet these
households, which rely mainly on income
from the informal economy, cannot bor-
row money easily from the formal financial
sector. Tis remains a key obstacle to the
improvement of shelter conditions and ul-
timately poverty reduction in urban areas.
Low income households are not an at-
tractive clientele for formal sector institu-
tions that provide shelter finance primarily
because they have limited assets and can
only build their homes in stages.
Indeed, an estimated 70 percent of
housing investment in developing coun-
tries occurs through such progressive build-
ing. Yet, incremental shelter investment is
not favoured by formal finance institutions
due to the risks associated with the build-
ing processes.
Te formal financial institutions do not
make a profit out of low income house-
holds, which in turn do not have the collat-
eral required to get a loan. Tus, a majority
of low income households finance their
shelter investments through their own sav-
ings or informal credit from various sources
(relatives, friends, money lenders).
Te realisation that hundreds of millions of
low income urban households remain largely
excluded from borrowing, has therefore led to
the exploration of innovative finance mecha-
nisms. In particular, shelter microfinance and
community funds have grown considerably
in recent decades, through multiple explora-
tions and innovations predominantly in Asia
and Latin America.
Shelter microfinance programmes pro-
vide small-scale lending to individuals for
housing investments (constructions, im-
provements and extensions). Community
funds are provided by institutions to groups
or community organisations for collective
housing construction or development of
land, infrastructure or services.
Both approaches are better designed to
help poor urban households address their
shelter needs because they involve small-
scale lending suitable to incremental shelter
investment strategies common among low
income households.
Tere is also a growing trend of combin-
ing loan provision through shelter micro-
finance and community fund programmes
with more comprehensive neighbour-
hood improvement and poverty reduction
initiatives such as settlement upgrading
(infrastructure and services), land develop-
ment and enterprise lending. Community
funds are particularly appropriate for slum
However, in their efforts to target low
income households, both approaches are
faced with two particular challenges. Te
first involves the risk of excluding the poor-
est households from being able to get loans.
Shelter microfinance programmes often
target the higher income urban poor such
as those with formal employment or diver-
sified livelihood strategies. In the case of
community fund mechanisms, the poor-
est households, most of which rely on daily
savings, may not be able to contribute to-
wards group or community savings, there-
by facing exclusion.
Tenants without secure tenure rights
and women are also at risk of being de-
nied loans through community funds.
Moreover, community funds require rela-
tively stable communities which may not
be the case for the poorest neighbourhoods
of many urban areas.
Institutions involved in shelter micro-
finance, for their part, also have difficulty
in securing sufficient loan capital, there-
by curbing their outreach. Longer loan re-
payment terms create greater term risk for
shelter microfinance providers. Shelter mi-
crofinance agencies also find it difficult to
set low interest rates and small loan sizes
that weigh the borrower’s demands against
their own financial needs. Similarly, com-
munity fund programmes often struggle to
secure subsidies from state funds, NGOs
and international development agencies,
without which they are unable to maintain
low interest rates.
Despite this, shelter microfinance and
community funds strategies flourish and
more agencies are becoming involved, in-
cluding municipal and central government
agencies as well as private sector agencies
not previously engaged.
Tere is an urgent need to increase the
scale of operations of shelter microfinance
and community fund operations. Scale
and sustainability can be realised through
concerted efforts of financial institutions,
governments and donors. It is particularly
important that governments encourage the
expansion of microfinance and communi-
ty fund lending for shelter investments by
creating the necessary legal and regulatory
Poverty reduction strategy papers
While the dire shortage of afordable housing has been recognized internationally as a deep and pervasive problem, strat-
egies to address this have not been thoroughly addressed in existing mechanisms, such as poverty reduction strategy pa-
pers (PRSPs).These are documents that the International Monetary Fund (IMF) and the World Bank require from national
governments detailing their plans to reduce poverty in order to qualify for debt relief under the Heavily Indebted Poor
Countries (HIPC) initiative. Out of the 54 countries with PRSPs or interim PRSPs, many of them address housing, but with
varying degrees of commitment or specifcity with regard to resource requirements. Many of the PRSPs discuss housing
as a problem and some have conducted surveys to identify housing needs more exactly. Some countries propose build-
ing a few hundred or few thousand units, while others propose public–private partnerships and land reform measures.
However, it is disappointing that many do not include clear measurable goals or budget information.
11 Habitat Debate March 2007
he African continent, particularly
sub-Saharan Africa, is characterised
by the enormous differentiation in the
economies of South Africa and the rest
of the continent. Tis is also evident in
the housing market and developments
in housing finance and delivery.
The housing market is very well de-
veloped in South Africa, despite severe
challenges in the low-income housing
However, the market is not well de-
veloped in most other parts of Africa,
with the exception of Ghana where
there is a developing mortgage mar-
ket. Other parts of Africa are still de-
veloping policies and mechanisms for
housing delivery, with a virtually non-
existent mortgage market.
The South African government is
also very active in housing delivery and
has developed a mass of policies to en-
able particularly low-income housing
South Africa
Te mortgage market in South Africa
is dominated by the banking sector,
which is responsible for more than 90
percent of mortgage lending. Mortgage
advances in South Africa grew by 29.6
percent year-on-year in September
2006. Te total of mortgage advanc-
es as at September 2006 was R640.4bn
($91.5bn). Te critical challenge for
South Africa is the existence of a dual
Te bulk of the mortgage advances
are in a very well developed middle to
upper income market. A significant part
of the population is in the lower-income
market, and this sector experiences chal-
lenges in housing delivery.
Te critical challenge is for those in
the monthly income category between
R1,500 and R7,900. Tere are issues
of affordability, supply and product in
this market. Construction costs have in-
creased significantly in South Africa, as
in most parts of the world, and this is ex-
acerbated by severe holding costs for de-
velopers as a result of delays at municipal
level in the processing of registrations
and provision of bulk infrastructure.
The affordability issue is critical in a
context of rising interest rates. A house-
hold earning R3,500 per month only
has a cushion of about R120 after basic
household costs. A 2 percent increase in
rates would make the mortgage payment
unaffordable. The prohibitive holding
costs have resulted in developers exiting
the low-income housing market, thus
leading to a lack of supply.
The country needs about 160,000
houses in the low-income market per
year to make an impact on the back-
log, but is constructing about 19,000
per year.
These are some of the challenges that
South Africa faces.
However, there is a very healthy en-
gagement between government, its
agencies and the banking sector to try
to address these challenges. The South
African government has been exem-
plary in its efforts to raise the issue of
low-income housing to the top of the
agenda in the country. The government
has instituted a capital subsidy scheme
that has benefited 2.9 million benefi-
ciaries since 1994.
Subsidy-linked housing delivery has
reached about 2.2 million people since
1994. The government is also engag-
ing the banking sector to develop risk
mitigation and sharing mechanisms to
enable the sector to lend to lower in-
come people. The banking sector and
government are also engaging the con-
struction sector to begin to address the
supply issues. And the banking sector
is engaging municipal government to
address the capacity constraints in that
level of government on land registra-
tion, bulk infrastructure and other rel-
evant matters.
The banking sector has been active
in the area of low-income housing. It
has done mortgage lending of about
R17bn in the 2005 calendar year to
the R1,500- R7,500 per month income
The South African government es-
tablished a wholesale financing facili-
ty called the National Housing Finance
Corporation in 1996. Its mandate is
to provide wholesale finance to retail
housing intermediaries servicing the
low-income market. The coporation
has approved R2.3bn in finance and has
disbursed about R1.9bn since its incep-
tion. This has resulted in 1.1 million
people getting access to shelter.
The South African government
also established an initiative called the
People’s Housing Process. It brings peo-
ple together in groups and enhances
the government subsidy by organising
people to contribute “sweat equity” by
building their own homes.
There are significant developments
in inner city housing development in
South Africa. The government has in-
troduced an Urban Development Zone
tax incentive scheme. About 100 com-
panies have registered to access it, with
a total investment in inner city regener-
ation, particularly in housing, of about
East Africa
A current initiative in East Africa is
an example of the positive results of re-
gional cooperation on the continent.
Kenya, Uganda and Tanzania have co-
operated to undertake a major housing
project to address a shortfall of about
3.8 million units in the region.
The 20-year project will eventual-
ly lead to the development of about
28 million units. The East African
Development Bank (EADB) is expect-
ed to raise $120m in the next two years
for the project. It will expect the three
countries to raise $20m each in the next
two years for seed capital. The balance
will be raised from the private sector in
the region and offshore investors will be
invited to subscribe to half of the cap-
ital needs.
The East African Development Bank
estimates the region will need to invest
some $12bn over the next 20 years to
keep pace with demand. The project is
a good start to meeting this need and
will go some way towards addressing
the severe problems of informal settle-
ments in the region.
Home-financing in Africa
Oxi oi Aiiica’s niccisr cuaiiixcis is uoxi oiiivii\. Bur ixciir ioi Souru Aiiica, Guaxa axo a uaxoiui oi
Easr Aiiicax couxriiis, Cas Coovania, Maxacixc Diiicroi oi rui Baxxixc Associariox oi Souru Aiiica,
sa\s rui uoxi-iixaxcixc sicroi ix rui iisr oi Aiiica iixaixs ix irs ixiaxc\. Ix ax airicii iiisr iuniisuio ix
Tnr Bax×rn, ui uicuiicurs rui cooo ixaxiiis sir n\ ruosi couxriiis iiaoixc rui »a\.
12 Habitat Debate March 2007 SPECIAL REPORT
Financing for urban development in the Asia-Pacific
Woiio Diviioixixr Ixoicarois suo» ruar Easr Asia axo rui Paciiic, axo rui Souru Asia sun-iicioxs
accouxr ioi 8o¡ axo 1,oo¡ xiiiiox iioiii, iisiicrivii\, iivixc ox iiss ruax ·: a oa\. Tuis airicii is oiiivio
iiox a siiciai iaiii iiiiaiio ioi iiisr Asia-Paciiic Mixisriiiai Coxiiiixci ox Housixc axo Uinax
Diviioixixr (APMCHUD) 1¡-1o Dicixnii, :ooo, ix Ni» Diiui n\ ixiiirs oi UN-HABITAT’s Huxax
Srrrirxrxrs Fixaxcixo Divisiox.
large proportion of the popula-
tion in Asian countries is vulnera-
ble to internal and external economic
shocks such as the Asian financial crisis
of 1997. In addition, widening income
inequalities are likely to create social un-
rest, which need to be addressed with-
out delay.
Based on lessons from 1997 and
buoyed by the sustained econom-
ic growth, many governments in the re-
gion are building social safety nets, and
undertaking massive urban investments.
Similarly, the private sector is making an
attempt to create business solutions that
provide affordable services to the urban
poor. Te conditions for improving the
quality of life for the majority of the poor
by the 2020 Millennium Development
Goals deadline set by world leaders are
positive, if urgent action is taken.
Civil Society more demanding
Today many believe it is their right to
demand a better quality of life. Given the
structure of the economies of the coun-
tries in the region and integration with
world markets, Asian cities will have to
be competitive on a global scale both in
terms of quality and cost efficiency of ur-
ban management. Tere is also signifi-
cant pressure to create Asian world class
cities. Tis augurs well for creating sus-
tainable urban centres.
Community mobilisation
Community and civil society move-
ments in the region are relatively strong,
and slowly gaining ground as a result of
efforts by NGOs such as Slum Dwellers
International and the Asian Coalition of
Human Rights. Te community-led de-
velopment processes are being promot-
ed by many countries such as Tailand,
the Philippines, Sri Lanka, India,
Pakistan, Nepal, Cambodia, Indonesia,
etc. However, in many other countries,
community movements and community-
led development processes are weak. Tis
must change.
Te region is also very strong in co-
operative movements as well as having a
savings culture. Many governments have
encouraged community mobilisation,
savings and cooperative movements. Te
Philippines, Tailand, Cambodia, Sri
Lanka, India, and Indonesia, to cite some,
have developed pro-poor urban develop-
ment strategies. Tis is a vital strength for
many countries in the region.
Bankability of Cities
Since the early 1990s, political decen-
tralisation has gradually gained ground in
the Asia-Pacific, and is relatively strong
in China, Te Philippines, Indonesia and
India. However, with few exceptions,
many of the cities in the region manifest
the paradox of rich citizens and poor city
governments. City governments do not
have the financial strength to meet the
requirements of even moderate invest-
ments in services.
Te institutional arrangements for ser-
vice delivery are also fragmented – most
of the local services are provided by na-
tional level or parastatal utilities - depriv-
ing the city governments a role in service
delivery. Slum prevention requires that
cities are equipped to plan and finance
land development and service delivery
that is affordable and efficient.
Despite this, many cities in China are
creating world class infrastructure to pro-
mote economic growth. Similarly, coun-
tries such as India, Te Philippines and
Indonesia have supported local gov-
ernment reforms related to better ac-
countability, creditworthiness and own
revenues. Tey are also introducing in-
centive funds to promote reforms, stream-
lining of inter-governmental transfers,
encouraging market based investments,
and, creating of municipal bond mar-
kets. Many countries also initiated e-gov-
ernance reforms to improve the quality of
governance – thus helping to create value
for money in public finance and helping
to improve quality of service delivery.
Housing Finance Systems
Housing remains one of the most
pressing issues in the Asia-Pacific. A lack
of infrastructure and long commuting
distances exacerbate the problems. Public
transport systems remain one of least de-
veloped infrastructure systems in many
Enhanced fscal capacity of local governments is the capacity to do development work at a large scale. It is essential that
cities are made to work for all citizens –equitably and efciently. There are several actions important in the immediate
phase that include:
n Fiscal decentralisation aimed at improving own revenue base of cities;
n Promoting land based revenue measures such as impact fees and valorisation charges to fnance major infrastruc-
ture such as public transport;
n Empowering cities to undertake land development with a pro-poor focus;
n Enhancing the quantity and predictability of inter-governmental transfers, with special attention on output based
aid and incentives for reform;
n Promoting credit rating of local governments;
n Rule and market based municipal borrowing frameworks; and
n Promoting efciency in public expenditure.
13 Habitat Debate March 2007 SPECIAL REPORT
of the cities in the developing countries
leading to very high commuting costs.
In Asia, according to UN-HABITAT’s
State of the World’s Cities 2006—7 re-
port, 73 per cent, of urban dwellers live
in non-permanent housing. Over half
of the world’s inadequate housing units
are located in Asia-Pacific – at roughly
500 million units. Te housing sector is
also severely constrained by lack of ade-
quate and appropriate housing finance
systems. In fact, an Asian Development
Bank study says Asia’s mortgage sector is
the least developed in the world. In Asia,
many countries’ mortgage financing per
year is less than 2 per cent of GDP com-
pared to 88 per cent in the UK.
Despite this gloomy picture, the re-
gion also has excellent innovations in
terms of shelter finance practices includ-
ing through shelter microfinance and
community funds.
Other Financial Services
Te financial sector in the region is
comparatively well developed and in-
tegrated intra-region wise and globally.
Many countries have liberalized the fi-
nancial markets. Te financial sector in
countries such as China, South Korea,
Malaysia, Singapore, India and Indonesia
are thriving. Te stock markets in many
of the countries are large and well devel-
oped. Te region is also experiencing sig-
nificant growth of the Islamic banking
On the downside, many countries in
the region have nascent and weak finan-
cial markets. Te participation of finan-
cial markets in financing housing and
urban infrastructure has been limited
in many of the developing countries of
the region. Similarly, the majority of the
low-income households are also exclud-
ed from the formal financial services in-
dustry – although efforts are being made
to develop systems that provide finan-
cial services for the poor. And, the State
remains the main provider of shelter fi-
nance in several Asian countries, such as
Te Philippines and Bangladesh.
For the last 30 years, and thanks in no
small measure to Muhammad Yunus, the
Bangladeshi banker and Nobel laureate,
Bangladesh leads the way in creating fi-
nancial products for the poor. Te pen-
etration of microfinance into the shelter
finance sector is significant in many of
the developing countries of the region.
Significant efforts are underway to in-
tegrate the informal (including microfi-
nance) markets with formal ones in many
of the countries in the region.
Innovations in capital markets – both
formal and informal – present tremen-
dous opportunities for introducing fi-
nancial instruments for sustainable
Urban development
Very few countries (with the exception
of developed and emerging economies in
the region) have housing and urban sec-
tor policies for adequate, affordable shel-
ter, including related infrastructure. Land
ownership and titling is complex and ex-
pensive. Tere are limited subsidies avail-
able for housing and infrastructure. Te
urban sector does not feature highly in
many of the national programmes and
strategies. Tere is need for a better fo-
cus on housing and urban development
in several countries of the region.
Donor support
In general, bi-lateral donors (from
within and outside the region) and multi-
lateral banks have supported urban devel-
opment in many developing countries of
the region substantially during last three
Key innovations:
n Promoting afordable housing through provision of service delivery, competitive market development, private sec-
tor involvement and cost reduction measures;
n Improved land use planning as well as provision of afordable and adequate public transport systems;
n Introduction of smart subsidies for the needy;
n Establishment of special purpose vehicles for intermediating market based housing fnance and for improving the
management of housing stock;
n Introduction of credit bureaus, foreclosure laws, etc;
n Establishment of mortgage insurance, credit guarantee facilities and securitisation mechanisms;
n Facilitating long term funds for housing and infrastructure;
n Deepening of life and non-life insurance products; and
n Promoting universal access to comprehensive fnancial services.
decades. Yet, aid flows to countries ac-
count for small proportion of their GDP.
Te Asia 2015 Conference strongly sup-
ported the increasing development as-
sistance flows. Te conference also
recognised the need for strong technical
assistance in deepening development in
Asia. Future aid is likely to flow to lowest
income countries in the region.
Tere is a tremendous scope for cross-
learning across the countries of the
region. However, many developing coun-
tries in the region are also extremely im-
poverished. Unless and until structural
and fundamental changes in financing are
initiated and sustained, the Millennium
Development Goals will remain a dream
in many of these countries. It is not just
a question of initiating few measures, but
also a matter of implementing decisions
and sustaining them over a long period
of time.
History has demonstrated that
the success of slum upgrading initia-
tives is greatest when community-driv-
en. Community movements are gaining
ground in the Asia-Pacific region. Te en-
ergy of the communities needs to be har-
nessed to undertake slum upgrading and
slum prevention. It is also necessary to
promote business solutions that provide
services to households at the bottom of
the pyramid.
Given the innovations and improved
economic growth in the region, there is
significant scope for deepening of the
housing finance markets and financial
services industry, especially for low-to-
middle income households in many of
the developing countries of the region.
14 Habitat Debate March 2007
he Asia-Pacific region is ex-
periencing the triple dy-
namics of economic growth,
rapid urbanisation and poverty.
It accounts for 34 percent of the
global urban population and is
also home to over 40 percent of
the slum populations.
Some major challenges of ur-
banization and economic growth
in this region are the growing ur-
ban-urban divide, deteriorat-
ing inner cities, unplanned and
haphazard settlements, insuffi-
cient urban infrastructure and
basic services. Te list also in-
cludes land and housing shortag-
es, environmental degradation,
mounting poverty, unemploy-
ment and social exclusion.
Tese problems have to be confronted
by effective planning, appropriate strate-
gies, action plans and a paradigm of good
governance. Tis will include strategic vi-
sion, consensus orientation, the rule of
law, participation, equity, efficiency, effec-
tiveness, transparency and accountability.
India with its initiatives and economic
reforms has been able to achieve a growth
rate of 8 percent per annum in the last few
years and is now aiming a growth rate of 9
per cent in the next five years.
India has 286 million people living
in over 5,000 cities and towns. Over 40
percent of them live in 60 metropolitan
urban agglomerations. Tere are 61.7
million urban people living in slums and
squatter settlements today. It is projected
that the urban population of the country
will grow to 468 million by 2020. Tis
will have a serious impact on housing,
civic infrastructure, basic amenities and
Conscious of the issues of slums and
poverty, the United Progressive Alliance
(UPA) Government in India through the
National Common Minimum Programme
(NCMP) has committed itself to a com-
prehensive approach to urban renewal
with emphasis on social housing, inclusive
city growth, slum upgrading and devel-
opment. Te Government has launched
the Jawaharlal Nehru National Urban
Renewal Mission to address the problems
of slums and civic amenities in an inte-
grated manner and has allocated US$12.5
billion for institutional financing.
Considering that reforms in cities are
critical for sustainable urban develop-
ment, the Mission aims to bring about
mandatory reforms both at State and city
levels to improve urban governance.
Te repeal of the Urban Land Ceiling
Act, the Rationalization of Stamp Duty,
Amendment to Rent Control Act, Property
Tax Reforms, Disclosure laws, and GIS
mapping are some of the major reforms.
We now have Seven Basic Services to the
Poor – Land Tenure, Affordable Shelter,
Water, Sanitation, Education, Health and
Social. Te Mission is a fast-track, de-
mand-driven, participatory urban plan-
ning and implementation mechanism.
Te central Government will give at-
tention to planning for sustainable cities
and devising macro-economic policies so
that resources can flow to the housing and
civic infrastructure sectors. Government
will also provide a more supportive en-
vironment to Street Vendors through a
comprehensive policy and a model Act.
However, there are three areas where
critical intervention is required for pro-
moting sustainable human settlements
and sustainable cities in the Asia-Pacific
First, the traditional sys-
tem of Master Planning of cit-
ies based on the Western model
of segregation of residential uses
from commercial and institu-
tional uses has led to social ex-
clusion and unequal growth.
Tere has been little planning in
this system for the informal sec-
tor including vendors, hawkers,
construction workers and other
vulnerable groups in cities. Te
Master Plans must be made in-
clusive with provision of ade-
quate space for housing the poor
and informal sector activities.
Second, urban growth,
mounting poverty, population
concentration, and unplanned
spatial activities have exacerbated
the complexities of urban administration.
Tere is lack of institutional and mana-
gerial capacities in implementing poverty
alleviation and slum upgrading in urban
civic bodies. City Governments should be
enabled to have the capacities and skills
to administer service outsourcing, public-
private partnerships for infrastructure de-
velopment, effective services delivery and
poverty alleviation programmes.
Lastly, we must accept inclusion of the
poor as the core in all urban policies and
programmes. My Ministry has been em-
phasizing the need for inclusive zoning,
inclusive planning and inclusive cities and
municipalities. I would urge this region to
make inclusion the dominant paradigm in
all our programmes.
India would be glad to support a
“Forum for Inclusive Cities”, which could
be a think tank – a bank of best practic-
es in inclusive civic development and an
agent of change for pro-poor governance
and service delivery in cities.
Te new Asia-Pacific conference is
unique because it provides a platform for
advancing the Habitat Agenda. It ena-
bles Asia-Pacific countries to speak with
one voice during regional and interna-
tional meetings like World Urban Forum,
the UN¬-HABITAT Governing Council
and meetings of the Commission on
Sustainable Development.
Economic growth, rapid urbanisation and poverty
Ix rooa\’s iasr oiviioiixc axo uinaxisixc »oiio, ciriis aii ixriciai coxriinurois ro icoxoxic cio»ru.
Bur sa\s Kuxani Srija, Ixoia’s Mixisrii oi Srari ioi Housixc axo Uinax ioviir\ Aiiiviariox, »i aii
aiso »irxissixc rui xicarivi coxsiquixcis oi ruis uinaxisariox sucu as siux cio»ru, uousixc axo civic
ixiiasriucruii suoiriaiis. Hiii ix a suxxai\ oi iixaixs ro rui iiisr Asia-Paciiic Mixisriiiai Coxiiiixci ox
Housixc axo Uinax Diviioixixr sui »aixs oi rui coxsiquixcis oi iisixc ioviir\.
The author, Kumari Selja, with Mrs. Tibaijuka, and President Abdul Kalam of
India at the frst Asia-Pacifc Ministerial Conference on Housing and Urban
Development in Delhi in December 2006. Photo: © UN-Habitat/N.Kihara
15 Habitat Debate March 2007
y giving us this prize, the Norwegian
Nobel Committee has given impor-
tant support to the proposition that peace
is inextricably linked to poverty. Poverty is
a threat to peace.
Te World’s income distribution gives
a very telling story. Ninety-four percent of
the world income goes to 40 percent of the
population while sixty percent of people
live on only 6 per cent of world income.
Half of the world population lives on two
dollars a day. Over one billion people live
on less than a dollar a day. Tis is no for-
mula for peace.
Te new millennium began with a
great global dream. World leaders gathered
at the United Nations in 2000 and adopt-
ed, among others, a historic goal to reduce
poverty by half by 2015. Never in human
history had such a bold goal been adopted
by the entire world in one voice, one that
specified time and size.
Poverty is the denial of all human
Peace should be understood in a human
way − in a broad social, political and eco-
nomic way. Peace is threatened by unjust
economic, social and political order, ab-
sence of democracy, environmental degra-
dation and absence of human rights.
Poverty is the absence of all human rights.
Te frustrations, hostility and anger gener-
ated by abject poverty cannot sustain peace
in any society. For building stable peace we
must find ways to provide opportunities for
people to live decent lives.
Te creation of opportunities for the ma-
jority of people − the poor − is at the heart of
the work that we have dedicated ourselves to
during the past 30 years.
Grameen Bank
I became involved because poverty was all
around me, and I could not turn away from
it. In 1974, I found it difficult to teach ele-
gant theories of economics in the university
classroom, in the backdrop of a terrible fam-
ine in Bangladesh. Suddenly, I felt the empti-
ness of those theories in the face of crushing
hunger and poverty. I wanted to do some-
thing immediate to help people around me,
even if it was just one human being, to get
through another day with a little more ease.
Tat brought me face to face with poor peo-
ple’s struggle to find the tiniest amounts of
money to support their efforts to eke out a
living. I was shocked to discover a woman in
the village, borrowing less than a dollar from
the money-lender, on the condition that he
would have the exclusive right to buy all she
produces at the price he decides. Tis, to me,
was a way of recruiting slave labor.
I decided to make a list of the victims of
this money-lending “business” in the village
next door to our campus.
When my list was done, it had the names
of 42 victims who borrowed a total amount
of US $27. I offered US $27 from my own
pocket to get these victims out of the clutch-
es of those money-lenders. Te excitement
that was created among the people by this
small action got me further involved in it. If
I could make so many people so happy with
such a tiny amount of money, why not do
more of it?
Tat is what I have been trying to do
ever since. Te first thing I did was to try to
persuade the bank located in the campus to
lend money to the poor. But that did not
work. Te bank said that the poor were not
creditworthy. After all my efforts, over sev-
eral months, failed I offered to become a
guarantor for the loans to the poor. I was
stunned by the result. Te poor paid back
their loans, on time, every time! But still
I kept confronting difficulties in expand-
ing the programme through the existing
banks. Tat was when I decided to create a
separate bank for the poor, and in 1983, I
finally succeeded in doing that. I named it
Grameen Bank or Village bank.
Today, Grameen Bank gives loans to
nearly 7 million poor people, 97 percent
of whom are women, in 73,000 villages
in Bangladesh. Grameen Bank gives col-
lateral-free income generating, housing,
student and micro-enterprise loans to the
poor families and offers a host of attractive
savings, pension funds and insurance prod-
ucts for its members. Since it introduced
them in 1984, housing loans have been
used to construct 640,000 houses. Te le-
gal ownership of these houses belongs to
the women themselves. We focused on
women because we found giving loans to
women always brought more benefits to the
In a cumulative way the bank has giv-
en out loans totaling about US $6 bil-
lion. Te repayment rate is 99%. Grameen
Bank routinely makes profit. Financially, it
is self-reliant and has not taken donor mon-
ey since 1995. Deposits and own resourc-
es of Grameen Bank today amount to 143
percent of all outstanding loans. According
to Grameen Bank’s internal survey, 58 per-
cent of our borrowers have crossed the pov-
erty line.
Grameen Bank was born as a tiny home-
grown project run with the help of several of
my students, all local girls and boys. Tree of
these students are still with me in Grameen
Bank, after all these years, as its topmost ex-
ecutives. Tis idea, which began in Jobra,
a small village in Bangladesh, has spread
around the world and there are now Grameen
type programmes in almost every country.
Beggars Can Turn to Business
''In Bangladesh 80 percent of the poor
families have already been reached with
microcredit. We are hoping that by 2010,
100 per cent of the poor families will be
reached. Tree years ago we started an
exclusive programme focusing on the beggars.
None of Grameen Bank’s rules apply to them.
Loans are interest-free; they can pay whatever
amount they wish, whenever they wish. We
gave them the idea to carry small merchandise
such as snacks, toys or household items, when
they went from house to house for begging.
Te idea worked. Tere are now 85,000
beggars in the program. About 5,000 of them
have already stopped begging completely.
Typical loan to a beggar is $12. We encourage
and support every conceivable intervention to
help the poor fight out of poverty. We always
advocate microcredit in addition to all other
interventions, arguing that microcredit makes
those interventions work better."
– M. Yunus
A Nobel Laureate explains...
Tui Noi»iciax Nonii Coxxirrii a»aioio rui :oo¡ Nonii Piaci Piizi ro Munaxxan Yuxus axo uis
Gnaxrrx Bax× cirixc ruiii iiioirs ro ciiari icoxoxic axo sociai oiviioixixr iiox niio». Lasrixc iiaci
caxxor ni acuiivio uxiiss iaici ioiuiariox ciouis iixo »a\s ix »uicu ro niiax our oi ioviir\, ir saio. Oxi
»a\ ro oo ruis is ruioucu xicio-iixaxcixc. Tuis ixciiir oi uis acciiraxci siiicu is iiiiooucio »iru rui
xixo iiixissiox oi rui Nonii Fouxoariox.
16 Habitat Debate March 2007 CASE STUDY
unicipal finance is a key factor for
infrastructure and housing provi-
sion. While national governments set the
general policy framework with economic
and fiscal policies and regulations of the
financial sector, the primary responsibility
of local governments is to invest in road,
water and sewer infrastructure and land
management. Consequently, the ability of
municipalities to raise revenue and man-
age resources is central for enabling hous-
ing investment and service delivery.
Reflecting their long political his-
tory, German municipalities have a
strong constitutional status within the
three-tier administrative system of the
Federal Republic. Vis-a-vis the Federal
States and the Federal Government
they have the right to take on the re-
sponsibility for organizing their own
local affairs.
The home guarantee rule defines
a foundation of financial self-gover-
nance, which includes the right for local
authorities to set their own budgets and
to control a local, business-based tax
source. Yet Local Authorities, bound
by federal and state laws, are not com-
pletely independent in running their
own affairs. The Federal states exert fi-
nancial oversight over municipalities to
ensure their actions are in line with the
rules of local government legislation.
With jurisdiction over water sup-
ply and sewage, waste disposal, local
roads maintenance, local welfare and
health services as well as construction
and maintenance of primary and sec-
ondary schools, municipalities are the
public entity with the highest level of
investments. Although their share at
all government expenditure was only
22 percent or 153 billion euros in
2005, representing 7 percent of GDP,
they undertake nearly two-thirds of all
public capital investments. In total,
Local Governments invested 19 billion
euros with 14 billion euros spent on
A look at the most important sourc-
es of revenue highlights the strong inte-
gration of German municipalities into
the national public finance system. Due
to a high level of revenue sharing and
redistribution between different levels
and units of government, local revenue
comes from a variety of sources.
Overall, Local Authorities received
151 billion euros in 2005, represent-
ing 24 percent of the total income of
all three government levels. Out of to-
tal tax revenue of 54 billion euros, the
biggest source is local business tax with
23 billion, followed by 18 billion euros
from a 15 percent share of the nation-
al income tax (states and federal gov-
ernment 42.5 percent each). Their 2.2
percent share of the nationally collect-
ed VAT equals 3 billion euros. The local
property tax – being much less prom-
inent compared to many other coun-
tries – contributed 9 billion euros. Fees
and rates, with two-thirds from water
and solid waste disposal, returned 16
billion euros, and commercial activities
9 billion.
The most important single source,
however, are grants from higher gov-
ernment levels with 49 billion euros.
Most important elements are formu-
la grants under the municipal finan-
cial equalization scheme, amounting to
21 billion euros and state investment
grants contributing 8 billion.
In addition to tax-revenue shar-
ing mechanisms, there are arrange-
ments that mitigate fiscal inequalities
between jurisdictions. Through “ver-
tical financial equalization”, the state
and federal levels provide grants to
municipalities based on their finan-
cial capacity in previous years. In ad-
dition, horizontal transfers equalize tax
differentials between different munici-
palities to reduce the income disparity
within each state.
Besides general transfers there are
established mechanisms for designat-
ed grants from higher levels of gov-
ernments for local infrastructure and
urban renewal. For instance, under
the Municipal Transportation Finance
Act Local Authorities receive up to
75 percent support for transport in-
frastructure. The Urban Development
Programme, a joint federal-state pro-
gramme in existence since 1971, sup-
ports municipal urban renewal projects
(currently about 1.3 billion euros per
year. An important complementary el-
ement for financing local infrastructure
is legal provision enabling municipali-
ties to recoup significant parts of these
expenditures from property owners.
Usually up to 90 percent of the costs
can be recovered.
However, although the German mu-
nicipal finance system enabled steady
and predictable resources for local gov-
ernments, there are also several critical
challenges. In particular, municipalities
voice concern about the rising num-
ber of unfunded mandates imposed on
them by higher spheres of government.
In the face of rising debt and manda-
tory spending for social services, par-
ticularly in East and North German
municipalities, investment levels have
declined substantially in recent years.
Representatives of cities and towns
also criticize the constraints of the in-
terlinked public finance system and
difficulties in implementing changes.
Challenges also arise from the financ-
ing required to maintain infrastructure
and public buildings, the estimated
backlog of which is close to 700 billion
euros. Finally, there are also fiscal chal-
lenges resulting from German reuni-
fication. In 2005, grants contributed
74 percent of all local revenues in East
Germany while in West Germany this
amounted to only 52 percent.
Overall, the German experience
shows that even in wealthier coun-
tries with a high degree of devolution
of powers, municipalities are still in
need of dedicated transfers and assis-
tance for infrastructure provision and
urban renewal from higher spheres of
Applying such models could be ben-
eficial in countries where municipalities
have a weak financial base. Such mech-
anisms would also overcome inequali-
ties resulting from uneven economic
development in different geographi-
cal areas. However, attention should be
given to models that do not discour-
age local initiative and maintain local
The municipal finance system in Germany
Looxixc ar »a\s ro ixiiovi xuxiciiai iixaxci s\srixs axo coviixaxci ix cooiiiariox »iru iairxii
couxriiis is oiiiicuir ixoucu. Cnnisriax Scniossrn oi UN-HABITAT’s Huxax Sirriixixrs Fixaxcixc
Divisiox iooxs ar iissoxs iiox Giixax\.
17 Habitat Debate March 2007 CASE STUDY
Employment no matter how humble is always better than begging.
Photo: Hiroshi Sato© UN-Habitat
any members are beggars or ex-
street beggars, so no-one is too poor
to join Jamii Bora. Some members are on
their way out of poverty, a few would even
say they are not poor any more. Tey are
now the mentors of those who are still very
poor. Mentor members help a lot by be-
ing an example. Tey are living proof that
however poor you are, you can get out of
poverty if you are determined enough.
Claris Adhiambo, a Nairobi beggar for
many years, is a proud member of Jamii
Bora. She started her first steps out of the
streets frying fish and chips for workers who
needed an inexpensive lunch. Although her
income was roughly the same as what she
made as beggar, she regained her dignity and
self-confidence. As her business grew, she was
able to take larger loans. Today Claris has a
wholesale business selling fish in Nairobi’s
Gikomba which serves many shops, hotels
and restaurants. She has inspired others to
join the trust and get out of poverty.
Another exemplary mentor is Beatrice
Ngendo, a single grandmother who lives
with her 12 grandchildren in Mathare Valley,
the second largest slum in Nairobi. Her chil-
dren and their spouses have died from AIDS.
Now the grandchildren only have her to care
for them. She joined the Jamii Bora in 2000
and today operates three successful business-
es – a grocery store, butchery, a restaurant
and a stone house which allows her to rent
out rooms. Her grand children are in school
and the oldest has just graduated as a qual-
ified nurse and has joined the staff in Jamii
Bora’s out patient clinic in Mathare.
Jamii Bora Finance, the main arm of the
trust, offers members savings accounts and
the right to borrow double their savings. It
offers loans for micro business, school fees,
and housing. Te loans, ranging from two
to 1,000 dollars, are offered to members Te
borrower pays 0.5% flat interest per week.
Te loan must be repaid within 50 weeks.
Te borrower decides the number of
weeks they wish to keep the loan and many
borrowers choose to repay the loan in 3-5
months, some will clear their loans in just a
few weeks. It also offers larger business loans
USD 1,000 and 10,000. Interest is paid
at 0.5% per week on a declining loan bal-
ance. Te loan must be repaid within two
years. After one successful business loan,
members can borrow for their housing or
children’s school fees on similar repayment
To help members realise their dream of
better homes the trust purchased 293 acres
of prime land in Kisaju, Kajiado District
south of Nairobi for a new, planned settle-
ment, known as Kaputei Town. Te town
being planned is expected to house some
2,000 families.
Kaputei will be a green town rich with
trees for beauty, wind protection and in-
come earning from wood sales. Constructed
wetlands will recycle wastewater and beauti-
fy the town at the same time. Jamii Bora will
construct the three model homes for on-site
Te total cost of the 2,000 hous-
es is $3,750,000 and the infrastructure
$3,750,000. Half of the cost of infrastruc-
ture will be charged to the residential area
and half to the commercial and industrial
area. Te members will receive loans from
Jamii Bora with 8.5%-10% interest for a
10-15 year repayment. Tus members will
be able to live in a modern 3-room house at
a cost of only $32 per month – the first of
its kind in Kenya. Te members in Kaputei
town will be organised in neighbourhood
management associations to develop and
maintain their neighbourhood facilities and
open spaces, parks and play grounds.
Te town will have a Town Management
Board with representatives of all neighbour-
hood associations and reporting to Jamii
Bora Trust. Te Trust will cover its cost for
maintenance through monthly fees and
charges of USD 6 from the homeowners.
Financing in action - the Jamii Bora Trust Kenya
Tui Jaxii Boia Tiusr is a iicisriiio cuaiiranii Tiusr israniisuio ix 1,,, ar rui ixiriarivi oi ¡o sriiir niccai
iaxiiiis ix Naiioni, Kix\a. Ix ruis airicii, rui ixriiiiixiui axo sociai ixvisroi, Kini Kaniirni ixiiaixs
uo» ir »oixs as a xicioiiaxci oicaxizariox axo uo» n\ rui ixo oi Juxi iasr \iai, ir aiso uao oia»x 1:o,ooo
xixniis »iru oiiiarioxs ix o1 niaxcuis.
18 Habitat Debate March 2007 BEST PRACTICES
The Community Led-Infrastructure Facility (CLIFF)
Te Community-led Infrastructure Financing Facility
(CLIFF) is an urban poor fund designed to act as a catalyst in
slum upgrading through providing strategic support for com-
munity-initiated housing and infrastructure projects that have
the potential for scaling up. Te overall goal is to reduce urban
poverty by increasing the access of poor urban communities to
commercial and public-sector finance for medium- to large-scale
infrastructure and housing initiatives. Te facility is funded by
Department for International Development (DfID) of the United
Kingdom, Swedish International Development Aid (SIDA), and
Homeless International and co-ordinated internationally by the
latter. CLIFF offers a number of financial products including:
n Technical Assistance Grants - to cover costs such as profes-
sionals’ fees that are required to support communities in
implementing projects.
n Capital grants - to enable projects to begin and continue at
a pace unhindered by the timings of project cost recoveries.
As projects are completed loans are repaid and the capital is
recycled at the local level as loan finance to other projects.
n Knowledge Grants - to allow the learning from projects to
be shared with as many people as possible to help achieve
change beyond the project.
n Management Grants - to cover the related management costs
of the organisations implementing CLIFF.
Te first initiative is in India with the Society for the
Promotion of Area Resource Centres (SPARC), the National
Slum Dwellers Federation (NSDF) and Mahila Milan. In 2006,
thirteen projects in India and five projects in Kenya were recipi-
ents of CLIFF loan finance.
Tese projects are expected to result in over 5,000 new safe
and secure homes and mean that an additional 1 million peo-
ple will have access to decent sanitation. Five banks are now
involved in providing £4.4 million in finance and municipal
guarantees for CLIFF supported projects and over 130,000
square metres of land have been allocated to the urban poor
from private and public sources. Government subsidies and
contracts worth nearly £5 million have also been mobilised so
both commercial and public agencies are beginning to become
effective partners of the urban poor.
Municipal Development Fund, Tamil Nadu, India
Te Tamil Nadu Urban Development Fund (TNUDF) was
launched in 1988 financed entirely by the public sector to re-
duce the massive backlog of infrastructure investment and im-
prove the delivery of basic urban services. However, it evolved
from a municipal trust fund to one established and managed
by the public and private sectors. In 1996, with the aim of
achieving managerial efficiency and attracting private capi-
tal for urban infrastructure, it was converted into an autono-
mous financial intermediary. Established as a trust fund with
private equity participation, it was the first public–private part-
nership in India that provided long-term municipal financing
for infrastructure without guarantees. Instead of merely chan-
nelling public funds, its purpose is to attract financing from
the private sector. It also manages a separate grant fund owned
by the state government to finance poverty alleviation projects.
Te is making an important contribution to capital investment
needs for large, lumpy and non-revenue generating projects.
For many small local governments that are unable to access the
markets directly, the fund provides a pooling mechanism and
indirect access to the market, together with enhanced credit.
Te fund is quite creative, launching new financial products
to tap the capital market for special purposes, such as the wa-
ter and sanitation
Government Financed Homeownership in Singapore
One of the most far-reaching systems of state intervention
in housing provision through direct construction is the case of
Singapore where 96 per cent of the households are living in
homeownership apartments. Following the transition to self
governance in 1959, the new government was committed to
improving housing, and it began during the early 1960s on a
relatively small scale by providing basic rental units for the poor
who were living in congested urban shop houses and as squat-
ters. Te flats, built by the Housing and Development Board,
were let out at monthly rentals of between US$20–$40 and
were within the paying ability of 75 per cent of the working
population. In 1964, homeownership was introduced and flats
were sold on 99-year leases. Once the state allowed would-be
homeowners to use their savings in the Central Provident Fund
to help finance their purchase, the scheme took off. Te fund
is a state-managed, tax-exempted compulsory social security
fund for all citizens to which employees and employers con-
tribute. Te prices of the flats are subsidized so that they re-
main within the affordability of the majority population. By
2001/2002, an estimated 85 per cent of the 3.3 million popu-
lation in Singapore were living in Housing and Development
Board dwellings (96 percent of which are owned by their occu-
pants and 4 percent of which are rented).
Alternatives to relocation in Thailand
Te experience of Tai urban poor groups has been that com-
munities cannot afford the costs of land purchase if they also
need to construct housing, even with the subsidized interest
rate that the Community Organization Development Institute
provides. During the mid-1990s prior to the financial crisis in
Tailand, groups did buy land. Te first communities threat-
ened with eviction were eager to purchase land and resettle. In
these first housing schemes funded by the Urban Community
Development Office in Tailand (1992–1996), some 54 per
cent had previously been renting land and the remainder had
been squatters. Te high prices meant they could only afford
Washing utensils in dangerously dirty water, Bangladesh, Photo © Suzi Mutter 2005
19 Habitat Debate March 2007 BEST PRACTICES
plots outside the city centre. Even before the financial crisis,
some families struggled to secure their livelihood in these ar-
eas. Unable to find alternative sources of income, they contin-
ued with their existing work and managed either high transport
costs or renting minimal accommodation closer to their previ-
ous inner-city locations. Other savings groups learned about
these experiences through the community networks that had
been established.Tey realized that relocation was a difficult
strategy and that families would have been better remaining
in their existing locations. Now networks actively discourage
households from relocating. As the financial crisis came to an
end, the community networks developed alternatives. Rather
than lend money for relocation, they would work with commu-
nities threatened with eviction to strengthen their capacity to
negotiate with their landowners.Te costs are lower and the lo-
cation is better with regard to income-earning opportunities.
Launching a housing microfnance product: Mibanco,
With 70,000 active borrowers, Mibanco in Peru is one of
the largest microfinance institutions in Latin America. Te
organization started as an (NGO), but became a commercial
bank in 1998. Te conversion into a deposit-taking institution
gave Mibanco the funding necessary to expand from micro-en-
terprise lending into other areas. During mid 2000, Mibanco
added a housing product, Micasa, in the form of a loan for im-
provement, expansion, subdivision, or rebuilding or replace-
ment of existing housing.
After 12 months of operation, Micasa had 3,000 clients,
with portfolio at risk greater than 30 days of 0.6 percent and
a return on loan portfolio of 7 to 9 percent. Loan size ranged
from US$250–$4000, and averaged US$916. Interest rates
were 50 to 70 per cent per annum. Tese rates are less than
those Mibanco charges on micro-enterprise loans. Loan peri-
ods were as much as up to 36 months; but most households
preferred loans of 6 to 12 months, and the average loan peri-
od was 11 months. Mibanco uses its analysis of repayment po-
tential and household assets to guarantee most loans. Mortgage
liens are sometimes taken, but only on larger loans (those above
US$4000) if the client already has clear legal title. In total,
mortgage liens secure only 7 percent of Mibanco’s home loans.
Te housing loan product has strong profitability and demand,
and Mibanco expects such loans to represent half of its portfo-
lio over the coming years.
Shelter for the poorest and most
vulnerable in Chile
Hogar de Cristo is a non-governmental, non-
profit, Church institution. Its mission is to pro-
vide appropriate shelter to the poorest among
the poor, especially the helpless aged, the home-
less, the terminally ill and others who lack any
form of support, like abandoned children and
youth. It also seeks to generate awareness of the
extent of the problems of the poor to encourage
relief campaigns. Founded in Chile over 50 years
ago, and featuring many programmes to help
the poor, Viviendas Hogar de Cristo (VHC) has
grown into a major provider of wooden sectional
housing to the poor. Its Ecuadorian branch pro-
duces 100 dwellings daily from bamboo, which
it grows in its own plantations. Seventy-seven
per cent of its beneficiaries have incomes of less than US$20
per month. About half are widows or female single parents.
Te overall costs of the house are US$450; but there is a gov-
ernment subsidy of US$144 (US$4 per month for three years).
Te client has to pay US$186 through payments of US$4–$5
per month. If they pay at the VHC office, the client can simul-
taneously receive medical attention and lunch for themselves
and their youngest children, subsidized by the government.
Tey can pay with their social welfare of US$11 per month
or with other income. Some are supported by VHC’s charita-
ble funds. Currently, VHC has 16,000 clients, of whom 80 per
cent pay every month; some even pay several months in ad-
vance. Only 1 to 2 per cent of clients are regarded as perma-
nent defaulters.
Remittances from the United States to Mexico
Cemex of Mexico is the world’s third largest cement produc-
er. Since 2002, Mexican residents in the US can buy cement
and other building materials directly in eight Cemex branches
in the US (a subsidiary called Construmex) and have the ma-
terials delivered directly to a chosen address in Mexico. Since it
began this service (early 2002 to October 2004), US$3 million
have been taken in construction sales. Te company estimates
that the building materials needed for a two-bedroom house
costs about US$6,700.
Adding value: The uTshani Fund, South Africa
Te uTshani Fund of the South African Homeless People’s
Federation was set up in 1994. From 1995 to 1999, the uTshani
Fund received substantial grant funding, including 10 million
rand (US$1.5 million) from the South Africa Department of
Housing and many millions more from European donors who
supported the federation’s strategy. It lent this money to fed-
eration members who used it to start building houses while
waiting for subsidy approval. During this period the uTshani
Fund facilitated the construction of almost 15,000 houses, all
of them larger and of better quality than comparable develop-
er-built products.
In just eight years, the uTshani process has created assets
worth seven times the value of the original investment. In con-
trast to much privately developed state housing in South Africa,
a federation house is worth considerably more than the resourc-
es put into it.
Kambi Moto, Haruma- Building Programme, Haruma 6, Kanya, Photo: © Suzi Mutter 2005
20 Habitat Debate March 2007 FIELD REPORT
ahid Amin, the Administrator of
the Municipal Corporation in
Muzaffarabad, has seen better days. He
is signing birth certificates. Yesterday he
had the daunting task of signing death
certificates. He indicates the greater pile
of files next to his cup of tea. Among
them is also the death certificate of his
wife. I offer my condolences and observe
the people in the tent. Tey are mostly
men and elderly women clutching piec-
es of paper – the only evidence left of the
property they once had. Tey are wait-
ing for information, for assistance. Zahid
Amin’s eyes brim with emotion, “I have
nothing to tell them. Tere will be finan-
cial assistance, I know, but when? How
much? For whom? For what? What am I
supposed to say today?” He closes the file,
and asks me to join him for a look at the
On 8 of October 2005, a massive
earthquake devastated 30,000 sq. ki-
lometers of mountainous Northern
Pakistan. In its wake it left over 70,000
people dead, almost 70,000 people in-
jured, 3.5 million homeless, and in
4,000 villages it destroyed or serious-
ly damaged 600,000 houses. Tis repre-
sents the destruction of 76 percent of the
entire housing stock.
Te government committed to invest
$2 billion for housing reconstruction – a
bill to be paid by the Pakistani tax pay-
er. Te Earthquake Reconstruction and
Rehabilitation Authority (ERRA) re-
sponded by adopting an owner-driv-
en approach for rebuilding housing.
Individual families were to rebuild their
homes with financial support from the
Government: $2,800 for a home de-
stroyed. and $1,200 for a damaged
house. Te money is disbursed in in-
stallments according to compliance with
earthquake resistant building standards.
Tis is the first time that an owner-
driven, pro-poor policy, ensuring eq-
uity has been uniformly applied across
an entire disaster affected area. To en-
sure the success of such an approach,
Pakistani civil society organizations and
the International Community have a
meaningful role to play in developing
the skills and capacities of those involved
in rebuilding to understand and apply
earthquake resistant housing reconstruc-
tion policies, principles and techniques.
Te rural housing reconstruction pol-
icy, published in April 2006, was devel-
oped as a result of a consultative process,
facilitated by UN-HABITAT, that in-
cluded the ERRA, the Pakistan Army,
International Financial Institutions, do-
nors, 80 NGOs and others.
Tere is little doubt that one of the
greatest challenges in the rural housing
reconstruction process to date, is ensur-
ing the provision of consistent technical
assistance to maximize the investment
made by the government.
Te initial lack of understand-
ing among stakeholders of the impor-
tance of a people centered policy, and
the reluctance of many donors to sup-
port an owner-driven approach has had a
significant impact on the levels of fund-
ing made available for skill development
for housing reconstruction.
Millions of dollars were pledged by
donors and NGOs alike, to build houses
for people, rather than to support people
re-building safer housing themselves aid-
ed by financial and technical assistance.
It is, however, to the credit of ERRA
and many of the organizations collec-
tively involved in developing the rural
housing strategy, that through persistent
advocacy and a joint approach, some of
the pledged funds have been diverted
from physical reconstruction by NGOs
to training local masons, carpenters, steel
fixers and the beneficiaries themselves.
For many of ERRA’s partners, both
national and international, despite fund-
ing constraints and being overstretched
in an operationally demanding environ-
ment, the disaster in Pakistan has raised
awareness of alternative and more sus-
tainable ways of supporting people’s re-
covery and reconstruction. Te approach
that has been adopted has made effective
use of limited financial resources and en-
abled the remarkable levels of progress of
people rebuilding safer homes.
Many months ago Muhammad
Saleem sat in Zahid Amin’s tent waiting.
Now he leads me down a steep hill to his
building site. To one side is timber, cor-
rugated iron sheeting, a few doors and
window frames salvaged from his pre-
earthquake house. He shows the paper-
work signed by the assessment team that
qualifies him for financial assistance and
proudly explains to me the elements that
have now been incorporated into the
foundation to make his house safer. His
wife smiles a wide toothless grin, pulls
me aside and says ‘Don’t talk to him,
talk to me. I designed the house.” As she
drags me off to see the location of the
kitchen, I am convinced: there is noth-
ing like designing and building your
own home.
Field dispatch – Building back better in Pakistan
Wuix ir coxis ro usixc iuxos ooxario »isii\ ix a ciisis, Axxa M. Poxr, Piociaxxi Cooioixaroi,
UN-HABITAT- Paxisrax, ixiiaixs uo» rui suivivois oi ax iairuquaxi »iii anii ro iia\ a iivorai ioii
ix iinuiioixc ruiii iivis axo uoxis. Sui iia\s a iiao ioii ioi uousixc ix rui Ixrii Acixc\ Sraxoixc
Coxxirrii Oiiiarioxs Gioui axo uas cooioixario iuxoiaisixc ioi uousixc »iruix rui iiaxi»oix oi rui
Eairuquaxi Ricoxsriucriox axo Riuaniiirariox Auruoiir\-UN Eaii\ Ricovii\ Piax.
Photo ©: Jean-Christophe Adrian/UN-HABITAT
21 Habitat Debate March 2007 NEW PUBLICATIONS
F r o m t e c h n i c a l
c o o p e r a t i o n p r o j e c t s t o
n a t i o n a l p o l i c i e s
ISBN: 92-1-1311861-0
HS: 872/06
Language: English
Publisher: UN-HABITAT
A documentary account of how
UN-HABITAT’s work in field
projects is translated into nation-
al policy. Drawing on projects in
many countries around the world,
this report looks at lessons learned.
Each chapter shows how UN-
HABITAT’s global normative
messages are taking into account
in operational activities which in
turn have a direct impact t on na-
tional policies. Reciprocally, it ex-
plains how lessons from technical
coopeation projects are feeding into the normative agenda
of the agency through monitoring, evaluation and internal
S h a r e d t e n u r e o p t i o n s f o r
w o m e n
ISBN: 92-1-131869-6
HS: 883/06E
Language: English
Publisher: UN-HABITAT
While independent forms of land
and housing tenure may provide
most security of tenure, the reality
for the majority of women is that
they cannot afford such independ-
ent access. Indeed, secure tenure
depends on their relations with
the husbands, fathers and oth-
er male relatives. Joint or shared
tenure options, such as commu-
nity of property, co-ownership of
family land, family tenure, collec-
tive land rights for informal settle-
ment dwellers, women’s groups accessing land and housing,
provide different levels of secure tenure for women in law
and practice. Tis publication gives a global overview of
marital property and co-ownership rights, both in legisla-
tion and in practice, while also seeking to map out more in-
novative forms of shared tenure that may benefit women.
A n a l y t i c a l p e r s p e c t i v e o f
p r o - p o o r s l u m u p g r a d i n g
f r a m e w o r k s
ISBN: 92-1-131841-6
HS: 847/06
Price: $15
Language: English
Publisher: UN-HABITAT, Cities Alliance
Te close of the last millenni-
um saw the development of cit-
ies in the developing world being
radically shaped by the intrinsi-
cally related processes of urbani-
zation and globalization. Neither
of these phenomena is new —
what is unprecedented is their
pace and scale. Indeed, urbani-
zation processes in most devel-
oping countries are intensifying.
Tis poses immense challeng-
es for governments at all levels.
Tese are rapid urban population growth and the urbaniza-
tion of poverty. Te latter is manifested most conspicuously
in the proliferation and expansion of slums and informal set-
tlements, which are home to a growing proportion of urban
dwellers in developing countries. It presents a major chal-
lenge to the international community.
E n h a n c i n g R e s o u r c e
A l l o c a t i o n t o U r b a n
D e v e l o p m e n t i n A f r i c a
HS: 862/06
Language: English
Publisher: UN-HABITAT
Tis collection of papers by lead-
ing experts proposes policy rec-
ommendations in the areas of
public and private finance, the
informal sector, and reliable data
availability. Te idea is to pro-
mote awareness among African
decision and policy makers in
budget and finance ministries of
the need to enhance resource allo-
cation to African cities as a means
of speeding up national econom-
ic and social development.
To order these and any other pub|ications, go to www.unhabitat.org and c|ick on pub|ications
22 Habitat Debate March 2007 NEWS & EVENTS
Mrs. Tibaijuka meets new Secretary
General on his frst ofcial overseas
The new UN Secretary General Mr. Ban ki-Moon visited Kenya in
January where Mrs. Tibaijuka, escorted him through a section of
the crowded Kibera slum to give him his frst taste of extreme ur-
ban poverty in Africa.
Mrs. Tibaijuka shows UN Secretary General Ban ki-Moon around
Kibera slum in Kenya. Photo: © UN-Habitat/N.Kihara
“I feel very much humbled by what I am seeing now. That makes
me resolve again my frm commitment to work for the improve-
ment of the living conditions, education, water, sanitation, hous-
ing – all these are the challenges which we must overcome,” Mr.
Ban said outside the UN-HABITAT ofces in Kibera, as journalists
and members of the public scrambled to hear him speak. “This is
not the only place, I know. There are many other billions of peo-
ple sufering from lack of afordable housing – all the facilities
which make our life decent,” he said. “We must work together and
generate the political will to have a smooth implementation of
the Millennium Development Goals and I will work very closely,
and harder than before.”
First Asia Pacifc Ministers Conference
held in New Delhi
The frst Asia-Pacifc Ministers Conference on Housing and Urban
Development was held in December last year in New Delhi, India
with clarion calls to reduce urban poverty and pollution in the
world’s most populous region. “Increasing urbanisation is emerg-
ing as the most pervasive and dominant challenge in the region,”
India’s Minister of Housing and Urban Poverty Alleviation, Kumari
Selja told the opening plenary. Cities, she said are the hubs of
economies, investments, technology, innovation, economic
growth and tertiary jobs. They make huge contributions to GDP
as reservoirs of skills and hope for millions of people in the rural
Mrs. Tibaijuka said she appreciated the collaboration with coun-
tries in the region, the Asian Development Bank and sister agen-
cies like UNESCAP. “You represent the world’s most populous
region – the region with most of the world’s largest cities. You
represent a part of the world that is the global economic power-
house of the future. You are gathered here to help devise a com-
mon new vision aimed at harnessing some of that great Asian
know-how and economic power to ensure that our growing cit-
ies of the future will not only be better managed, but managea-
ble – or what we in the United Nations call, sustainable,” she said.
Mrs. Tibaijuka told the conference the year 2007 will be the year
in which for the frst time, half of humanity will be living in towns
and cities. It marks the beginning of a new urban era. It is project-
ed that by 2030 that fgure will rise to two-thirds.
Moving into Eastern Europe and
UN-HABITAT’s work in the transition economies of Central,
Eastern and Southern European States, took a boost in February
at the First meeting of the Advisory Council of the UN-HABITAT
Warsaw Ofce, the agency’s newest regional centre. “I am strong-
ly convinced that the UN-Habitat Ofce Poland can improve the
efectiveness and enhance the regional cooperation in the feld
of sustainable development of human settlements,” said Mr.
Andrzej Aumiller, Minister of Construction of Poland said in wel-
coming remarks to over 70 delegates from 18 countries in the re-
gion. To fulfl these functions, the UN-HABITAT Ofce in Warsaw
would provide advisory services and facilitate the exchange of
knowledge and information, he said. It would also promote var-
ious contacts aiming at widening the cooperation in the felds
of housing and urban development. The Advisory Council is
made up of ministers of Central, Eastern and Southern European
countries responsible for housing and human settlements. Mrs.
Tibaijuka, who was in Warsaw for the occasion to thank the Polish
government, held talks with a number of senior ofcials, includ-
ing Mr. Aumiller, Ambassador Janusz Stanczyk, Undersecretary
of State at the Ministry of Foreign Afairs, responsible for the
UN System, and Mrs. Hanna Gronkiewicz-Waltz, the Mayor of
Young people graduate as
Twenty-fve young people from the One Stop Youth Resource
Center in Nairobi recently graduated from the frst ever Global
Partnership Environmental Entrepreneurship Program spon-
sored by UN-HABITAT, Youth for HABITAT and the Environmental
Youth Alliance. “This training is important because it recognizes
both the youth need for employment combined with their con-
cern for the environment,” said Jane Bisanjou, a trainer with Youth
for HABITAT. “The programme demonstrates that youthful ideal-
ism for the environment can be combined with the pragmatic
need for a job.”
Blind cyclist carries UN-HABITAT
In January a blind Kenyan cy-
clist started a marathon cycling
challenge from Cairo to Cape
Town as a UN-HABITAT good-
will ambassador: “The message
I want to tell all those in pain
and sufering is that it is pos-
sible to pick up the pieces and
start life afresh.”
Coming from Douglas Sidialo
this is in fact a passionate state-
ment. Before 7 August 1998,
Sidialo was an ambitious sales-
man with a Nairobi frm who
had his vision of the future well cut out. However, that Friday
morning everything changed, thanks to the terrorist attack at
the United States embassy in downtown Nairobi. Sidialo who
was driving by when the bombing occurred was blinded for life
in the bombing. The 37-year-old father of two girls overcame the
gloom that pervaded those early days after the bomb attack and
Photo: © UN-Habitat/N.Kihara
23 Habitat Debate March 2007 NEWS & EVENTS
with time has become a leading voice for the disabled. Known as
Tour d’Afrique, the test of man and machine was to wind its way
over a period of 120 days across some of the roughest terrains in
the world to end up in Cape Town.
UN HABITAT hosts WSF delegates
Hundreds of delegates to the World Social Forum in January con-
verged at the UN-HABITAT headquarters for a special session
highlighting the troubles women face worldwide.
Known as the “World Court of Women on Poverty: lives, liveli-
hoods, lifeworlds”, the session heard testimonies from women
in developing countries on problems of poverty, pain, survival
and resistance to the structural causes of poverty and destitu-
tion. The testimonies were received by a jury of wise women and
men from all parts of the world. In a key note address to the par-
ticipants, Mrs. Tibaijuka said that the World Social Forum 2007
was being held at a critical time in human history, when half of
the global population will live in urban areas.
Conquering Kilimanjaro in fght
against crime
In what has become an annual event, a group of youths in
February embarked on the second climb of Africa’s highest
mountain, Kilimanjaro to highlight the problem of growing crime
in the East African cities. “This is a very good idea and my appeal
would be to our leaders to set aside some piece of land so that
the youth can engage in sporting activities which then would
help them keep of crime,” former Nairobi mayor Joe Aketch said.
The 14 youths from across East Africa will climb to the top of Mt.
Kilimanjaro. Their aim is to highlight the problems facing young
people living in slums on a daily basis and encourage them to be-
come agents of change. The climb will be led by Mr. Tim Challen,
founder of the Kilimanjaro Initiative who was himself a victim of
armed robbery in Nairobi, and Mr. Joseph Ogidi of the famed Gidi
Gidi Maji Maji Hip Hop Band.
Rwanda to beneft from water for
African cities
UN-HABITAT has announced that it will extend its Water for
African Cities Programme to help provide water and sanita-
tion services for people living in the Rwandan slums and other
poor neighbourhoods. The announcement was made follow-
ing the signing of a memorandum by Mrs. Tibaijuka and Mr.
Bikoro Munyanganizi, Minister of State in charge of Water and
Mines, in the capital Kigali on
22 February. During a day-long
visit that coincided with the
2007 International Women’s
Parliamentary Conference, Mrs.
Tibaijuka also held talks with
President Paul Kagame. The aim
of the programme in Rwanda
will be to upgrade water and
sanitation services for the ur-
ban poor in Kigali, and look at
new ways fnancing local wa-
ter and sanitation initiatives.
They said they would moni-
tor progress on Millennium Development Goal 7, Target 10 for
improved water and sanitation. UN-HABITAT’s Water for African
Cities programme will also be taken into schools to provide class-
es on water conservation, publicly promoted to ensure people
are better informed, and promote the special needs of women in
all water and sanitation programmes. The Water for African Cities
Programme is currently running in 17 cities across 13 countries in
Africa – Burkina Faso, Cameroon, Cote d’Ivoire, Ethiopia, Ghana,
Kenya, Mali, Mozambique, Nigeria, Senegal, Tanzania, Uganda,
and Zambia.
UN-HABITAT honours Bahrain
Bahrain’s Prime Minister Sheikh Khalifa bin Salman al Khalifa to-
day won a United Nations award for his eforts in improving the
lot of the urban poor.
UN-HABITAT, which is mandated to promote socially and envi-
ronmentally sustainable towns and cities with the goal of provid-
ing adequate shelter for all, gave Sheikh Khalifa the 2006 Special
Citation of the Habitat Scroll of Honour Award for his “impressive
eforts in lifting the living standards of all Bahrainis through an
active focus on poverty alleviation and modernization while pre-
serving the cultural heritage” of his country.
Upcoming Events
Twenty-frst Session of the Governing Council of UN-HABITAT,
Nairobi, Kenya, 16-20 April
Seventh Global Forum on Reinventing Government,
UNHQ, Vienna 26-29 June
What policies for globalizing cities: Rethinking the Urban
Policy Agenda
29-30 March, 2007 - Madrid, Spain
Photo: © UN-Habitat/N.Kihara
President Kagame meeting
delegates. Photo: © UN-Habitat
Photo: © UN-Habitat
PO Box 30030, GPO,
Nairobi, 00100, Kenya
Tel.: +254 (20) 762 3120
Fax: +254 (20) 762 4266/4267/
E-mail: infohabitat@unhabitat.org
Web: www.unhabitat.org/
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Africa and the Arab States
UN-HABITAT Regional Ofce for Africa and the
Arab States
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E-mail: roaas@unhabitat.org
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Asia and the Pacifc
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Fukuoka 810-0001, Japan
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E-mail: habitat.fukuoka@unhabitat.org
Web: www.fukuoka.unhabitat.org
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UN-HABITAT Regional Ofce for
Latin America and the Caribbean
(ROLAC)/Ofcina Regional para
America Latina y el Caribe (ROLAC)
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E-mail: habitatny@un.org
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Union and Belgium
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Tel.: +32 (2) 503 3572/1004
Fax: +32 (2) 503 4624
E-mail: unhabitat@skynet.be
Information and
other offices
UN-HABITAT Information Ofce
H-1124 Budapest
1077 Budapest, VII. Kéthly Anna tér 1.II.38.
Tel./Fax: +36 (1) 441 7737
E-mail: unhabitat@meh.hu
UN-HABITAT Information Ofce
5th Floor (East Wing)
Thalamuthu Natarajan Building
(CMDA Building)
Egmore, Chennai 600 008, India
Tel.: +91 (44) 2841 1302
Fax: +91 (44) 2851 6273
E-mail: unchssp@md2.vsnl.net.in
UN-HABITAT Beijing Information Ofce
No. 9 Sanlihe Road
Beijing 100835
People’s Republic of China
Tel.: +86 (10) 6839 4750/6835 0647
Fax: +86 (10) 6839 4749
E-mail: unchspek@public.bta.net.cn
Web: www.cin.gov.cn/habitat
Russian Federation
UN-HABITAT Programme Implementation Ofce
in Russia,
7 Building, 13, 1-st Magistralnaja str.
Moscow, 123007,
Russian Federation
Tel.: +7 (495) 707 2807/940 1148
Fax: +7 (495) 707 2500/940 1116
Email: starovoytov@gosstroy.gov.ru
UN-HABITAT Ofce in Amman
P.O. Box 930766
Amman 11193, Jordan
Tel.: +96 (26) 553 8498
+96 (279) 695 3820 (Mobile)
Fax: +96 (26) 553 5794
UN-HABITAT Ofce in Belgrade
RK Beograd Building,
Makenzijeva 57, ofce 303
11000 Beograd, Serbia
Tel./Fax: +381 (11) 344 9200
+381 (11) 340 4162
E-mail: ofce@unhabitat.org.yu
UN-HABITAT Warsaw Ofce,
Ul. Chalubinskiego 4, 00-928 Warsaw,
Tel.: +48 (22) 630 1720
Fax: +48 (22) 630 1722
Email: ofce@unhabitat.org.pl
Web: www.unhabitat.org.pl
With its worldwide circulation online and in print, in
fve languages – English, Spanish, Russian, Chinese,
and Arabic – Habitat Debate has a readership of about
35,000. Distributed to some 20,000 institutions, it is an
ideal advertising medium for all spheres of interest to
people and corporations working with cities, in cities
and for cities around the world.
In addition to its distribution to the world’s leading
mayors, government ministers, architects, urban
planners and key global urban policy makers, Habitat
Debate also reaches leading universities and research
Four times a year, Habitat Debate, UN-HABITAT’s fagship
magazine, carries a series of authoritative articles by the
world’s leading experts on global urban developments,
looking objectively at both the good and the bad of our
rapidly urbanising world.
Editorial Assistant, Habitat Debate, P.O. Box 30030, Nairobi 00100, Kenya.
E-mail: habitat.debate@unhabitat.org Website: www.unhabitat.org Telephone: (25420) 762 3120, Fax: 762 42 64.

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