David Satterthwaite, Senior fellow at IIED introduced the urban finance for local groups session at the Money where it matters (MWIM) event. The presentation was made at the event-Money where it matters, held in London from 7-8 December 2016. The purpose of the Money Where It Matters event was to reflect on our insights and explore further how financing mechanisms can more effectively channel resources to the local level and identify opportunities to increase flows of finance to the local level in new contexts for development assistance and national investment. It also agreed on outstanding questions that require further research on finance for and with local actors to achieve the effective use and management of funds to deliver climate resilient sustainable development. More details: https://www.iied.org/promoting-local-access-development-climate-finance

1. Urban finance for local groups for the SDGs 1
David
Satterthwaite
December 2016
David
Satterthwaite
December 2016
David Satterthwaite
Urban finance for local groups
for the SDGs

2. Urban finance for local groups for the SDGs 2
David
Satterthwaite
December 2016
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

3. Urban finance for local groups for the SDGs 3
David
Satterthwaite
December 2016

4. Urban finance for local groups for the SDGs 4
David
Satterthwaite
December 2016

5. Urban finance for local groups for the SDGs 5
David
Satterthwaite
December 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

6. Urban finance for local groups for the SDGs 6
David
Satterthwaite
December 2016
IIED’s early work on local funds +
adventures with UNDP, DFID, EU…

7. Urban finance for local groups for the SDGs 7
David
Satterthwaite
December 2016
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

8. Urban finance for local groups for the SDGs 8
David
Satterthwaite
December 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

9. Urban finance for local groups for the SDGs 9
David
Satterthwaite
December 2016
9
Slum/Shack Dwellers
International (SDI)
and the core methods

10. Urban finance for local groups for the SDGs 10
David
Satterthwaite
December 2016
10

11. Urban finance for local groups for the SDGs 11
David
Satterthwaite
December 2016
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

12. Urban finance for local groups for the SDGs 12
David
Satterthwaite
December 2016
Need new models if SDGs are to be
met for low income urban dwellers
A billion in informal settlements
Lack of progress in watsan
Need vast improvements in local
governance
 Precedents for national government
supporting community-driven action
at scale: FONHAPO and CODI

13. Urban finance for local groups for the SDGs 13
David
Satterthwaite
December 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)

14. Urban finance for local groups for the SDGs 14
David
Satterthwaite
December 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

15. Urban finance for local groups for the SDGs 15
David
Satterthwaite
December 2016
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

16. Urban finance for local groups for the SDGs 16
David
Satterthwaite
December 2016
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

17. Urban finance for local groups for the SDGs 17
David
Satterthwaite
December 2016
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