www.citiesalliance.org

FFINANCIALINANCIAL S SERVICESERVICES: A C: A CROSSROSS-C-CUTTINGUTTING T THEMEHEMEOCTOBER 8, 2002

I. CA Strategy to Date

II. CA Key Initiatives

A.  The Shelter Finance for the Poor Initiative

  Overview

  Snapshots – What practitioners are learning

  Emerging policy recommendations

  Early Results

B.   Community-led Infrastructure Finance Facility (CLIFF)

III. Next Steps

Outline

I. CA Strategy To Date

Poor’s demand for housing and housing finance services is high

Access to capital tailored to their needs is big constraint 

Increasing recognition of the incremental way poor people build

Mortgage finance and old housing paradigm not working

Recent entry of financial institutions specialized in serving the poor commercially  

FIsPoor Cities

City City Poor Poor

II. CA Key Initiatives

A. Shelter Finance for the Poor Initiative  Overview

A private financial institution led initiative: networks of practitioners and supporting partners

Purpose: look at emerging practice and learn how best to support it (FIs, govts and donors)

Approach: learning by doing and lateral exchange

The cases: SEWA, Mibanco, Funhavi, Ecuador, Kenya

Analytical Framework: scale, financial sustainability, client poverty levels

CA Key Initiatives

Snapshots – What practitioners are learning

MIBANCO (PERU)

Context

Product: terms, amounts, pricing, forms of guarantees

Clientele

Service delivery methodology

Early results: scale, portfolio quality and profitability

What would it take to go to scale?

CA Key Initiatives

Emerging Policy Recommendations Pro-poor financial institutions in the driver’s seat Key Constraint to scale is retail institutional capacity

 

Governments: Create the enabling environment that follows the institutions and the practice

Land availability and the security of tenure

Sound financial sector policy

Donors: Institutions: portfolio quality, client outreach, sustainability, track record

Instruments: Facilities that provide medium term capital to FIs (3 to 5 year)

Flexible funding: institutional capacity building, pilots, institutions, not `projects’

Promote/fund:research and knowledge dissemination

Long-term view: building institutions and not `projects’

CA Key Initiatives

Early Results

Dissemination: own and leveraged

Practitioners doing more already (Accion, Indonesia, Vietnam)*

Donors rethinking modes of support (SIDA, IaDB)

Governments recognizing new `paradigm’ (Indonesia, South Africa)

Next Steps

PPF 2003

Learning/Dissemination

Facilities for medium term capital to FIs