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

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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

Published in: Environment
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Urban finance for local groups for the Sustainable Development Goals (SDGs)

  1. 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. 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. 3. Urban finance for local groups for the SDGs 3 David Satterthwaite December 2016
  4. 4. Urban finance for local groups for the SDGs 4 David Satterthwaite December 2016
  5. 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. 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. 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. 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. 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. 10. Urban finance for local groups for the SDGs 10 David Satterthwaite December 2016 10
  11. 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. 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. 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. 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. 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. 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. 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

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