Urban finance for local groups for the Sustainable Development Goals (SDGs)

Urban finance for local groups for the SDGs 1

David SatterthwaiteDecember 2016


David Satterthwaite

Urban finance for local groups for the SDGs



In last 20 years, astonishing growth in federations of slum/shack dwellers • Show effectiveness of local funds. • Many have financial architecture to use

external funds well • Women-centric/mostly women led • Opportunity for external donors to work

with representative organizations of the urban poor

External funders cannot fund hundreds of small projects – but they can fund the local or national funds that can






David SatterthwaiteDecember 2016In this session

• Overview of slum/shack dweller federations & international, national & local funds that support them

• Jane Weru + Anastasia Maina on the example of Akiba Mashinani Trust as the Fund that supports the Kenyan Federation Muungano

• Questions about AMT and its work• Commentary: Ellie Bainbridge• Discussion



IIED’s early work on local funds + adventures with UNDP, DFID, EU…



In last 20 years, slum/shack dweller federations as game changers• Urban poor groups have organized; 1000s of

savings groups • Savings groups create federations as they

organize in hundreds of cities and 37 nations • Where they do things – building or improving

homes, provision for sanitation, enumerations or surveys…

• Strong focus on value systems that unite communities in struggles for tenure security & decent housing+services

• All seek to work in partnership with local governments

• SDI (Slum/Shack Dwellers International) formed in 1996


David SatterthwaiteDecember 2016Collective achievements

• 8,455 savings schemes (most with 20-100 members)

• 415,000 savers• 200,000 households helped with access to basic

services (water, sanitation, waste management)• 35,000 households supported to get housing • 49,000 households in reblocked informal

settlements• 750,000+ with improved sanitation• Detailed surveys and maps for 8,512 informal

settlements in 500+ cities



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Slum/Shack Dwellers International (SDI) and the core methods



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Building financial systems

• Many federations have built the financial systems to draw in external funding to blend with their savings + loans and resources leveraged from local government. AMT as a powerful example.

• As you listen to Jane Weru and Anastasia Maina, remember: 36 other national federations of slum/shack dwellers

• An international fund (UPFI) managed by SDI to which all federations are members

• US$15 million to support all this – mostly through national and local funds



Need new models if SDGs are to be met for low income urban dwellers

A billion in informal settlementsLack of progress in watsanNeed vast improvements in local governance Precedents for national government

supporting community-driven action at scale: FONHAPO and CODI


David SatterthwaiteDecember 2016Benefits of national and local funds

• Supports savings groups take on initiatives; where they work well, other savings groups/federations learn from it

• Effective in blending funding from different sources, including savings

• Allowing larger scale (Local funds as means to manage the interface between the informal and formal)


David SatterthwaiteDecember 2016Good use of money

• Residents invest a lot to improve homes if not threatened with eviction.

• National & local funds support savings groups to take collective action – upgrading or new houses, provision for water and sanitation, slum surveys…

• Strong community ownership and accountability for all funds, including state monies – less corruption.

• Savings-based organizations able to look after/maintain investments



Other benefits of funds

• Strengthen capacity to work with state/secure better options (federations with more power and capacity)

• Get funding, get land, change constraining regulations

• Better implementation; new approaches realised with lower costs; precedents show everyone what is possible

• Collective approach (strengthened by savings group activity) supports inclusion of lower income households including tenants



Why do the federations not get support from international agencies? • Development assistance agencies reluctant to give

control to citizens?• Local processes to develop strong citizen groups

can be slow; pressure for quick implementation• “The state should meet its responsibilities” (i.e.

citizen contributions only through the market and cost-recovery)

• Reluctance to invest in public goods in informal settlements; preference for individual services; citizen as consumer/client and private sector as provider



TAKING THIS FORWARD• How can federations & SDI increase access to

external funds to upscale meeting SDGs• Do so without turning federations into project

implementing agencies (undermining horizontal relations of trust, reciprocity & empowerment at community level)

• Key role of global (UPFI) national (eg AMT) and city funds (also provide accountability & transparency)

• Local+national funds as aggregators: allow external funding to large numbers of ‘cheap’ initiatives

• Other initiatives to learn from: Asian Coalition for Community Action in

External funders cannot fund hundreds of small projects – but they can fund the local or national funds that can

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Urban finance for local groups for the Sustainable Development Goals (SDGs)

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