Hope for Informal Settlements

<p>Collective action and micro financing are two promising models for improving the livability of informal settlements, writes Neal Peirce.</p>
August 14, 2007, 11am PDT | Michael Dudley
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"Most new urban slums are euphemistically called "informal settlements" - unrecognized by government, lacking basic services, and with no legal basis for land ownership. Yet they struggle upward. Take the favelas around São Paulo: From 1980 to 2000 those dwellings with piped water rose from 33 percent to 98 percent, public sewer connections 1 percent to 51 percent, electric power 65 percent to almost 100 percent.

Such advances, though, are far from automatic and especially tough to register in such deeply poor countries as those in sub-Saharan Africa and Southeast Asia. The challenge is all the tougher for slum residents living without any kind of land title or way to collateralize a loan for basic home improvements.

The best answer yet developed: collective action of slum dwellers to upgrade their own settlements and lobby the political system for neighborhood improvements. Slum Dwellers International, formed in India in 1996, has become a multination federation, active from Cambodia to South Africa. It leverages government contributions and works with grass-roots groups of residents - mainly women - who are ready to share their meager savings and strategize to gain tenure security and upgraded housing. More than 2 million slum dwellers, in 24 countries, have been mobilized.

Now it appears that the principle of micro-financing, first developed to introduce small amounts of outside capital to help individuals in poor nations start up home enterprises such as a weaving studio or a small bakery, is ready to spread dramatically to housing and such shared basic services as water and sewer connections.

Can the greater world help? The answer from the experts gathered at the Bellagio summit was a clear "yes" - that with collective grass-roots action of neighbors assuring each other's loan paybacks, there are emerging opportunities to build a series of intermediary capital institutions that can provide links all the way up to mainstream international capital markets."

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Published on Monday, August 13, 2007 in The Seattle Times
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