Pro-poor settlements upgrading programmes of UN-Habitat facilitate the under-served populations gain access to Local Finance Facilities. While many urban dwellers living in slum settlements have significant income generation and savings capacity, due to the informal income or lack of legal tenure they are unable to access the formal financial sector for housing / settlement upgrading.
UN-Habitats’ initiatives rely on innovative “guarantee” mechanisms to absorb the risks of private / formal financial lending to these “poor” communities. In Sri Lanka UN-Habitats’ Slums Upgrading Facilityin partnership with the government of Sri Lanka has mobilized USD 2,000,000towards setting up of a national revolving credit enhancement fund. In addition at city level similar mechanisms are set up under the “Pro Poor Partnerships for ParticipatorySettlements Upgrading Strategy and Action plans“ – in the cities of Ratnapura, Nuwareliya, Baticcaloa & kotte.