Affiliation:
1. SDI, 302 Albert Rd, Woodstock 7925, Cape Town, South Africa;
Abstract
The network of slum dweller federations known as SDI has innovated a form of local financing derived from the collective savings of urban poor groups. This addresses three shortcomings of conventional microfinance: its inability to reach very low-income people, its limited role in community mobilization for longer-term social change, and its constraints in terms of leveraging subsidies from the state and the market. SDI’s national and international urban poor funds have been used, among other purposes, for providing basic services and upgrading homes in informal settlements. Further, SDI’s model of federating urban poor communities and their funds at city, national and international levels has enabled mature federations, capable of financially sustainable projects, to cross-subsidize learning and precedent-setting projects in which full cost recovery is not feasible. This produces an outcome whereby the combined portfolios of all the national funds are able to match financial outflows with inflows. At the same time, the federations that co-manage these funds and the projects that they finance are able to escalate the production of social capital amongst the urban poor and to generate impact through changed relationships with government.
Subject
Urban Studies,Environmental Science (miscellaneous)
Cited by
2 articles.
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