Paper

How Can Microfinance Contribute to Restoring Dignity and Transforming Lives in Urban Slums?

Paper presented at the 2011 Global Microcredit Summit, November 14-17, 2011, Valladolid, Spain

This paper examines the role of microfinance in offering dignity and hope to people living in informal urban settlements or slums around the world. It explores the five major concerns regarding slums that have been highlighted by the United Nations (UN) in relation to the Millennium Development Goals. It outlines important caveats to any big picture view of slums and how best to fix them.

The five components that a UN Expert Group has identified as characterizing slums are insecure residential status, inadequate access to safe water, inadequate access to sanitation and other infrastructure, poor structural quality of housing, and overcrowding. In response, the UN has suggested five goals that directly address these challenges. They are access to safe water, access to sanitation, security of tenure, durability of housing, and sufficient living area. Recommendations include:

  • MFIs can create products and services that help slum dwellers gain better access to water, sanitation, housing, and tenure;
  • MFIs should collaborate with communities, governments, and other organizations;
  • MFIs and their staff will need to be flexible in their product and service offerings, while remaining disciplined in their customer service operations and fiscal responsibilities.

About this Publication

By Gailey, R. & Harver, R.
Published