1. www.citiesalliance.org F INANCIAL S ERVICES : A C ROSS -C UTTING T HEME O CTOBER 8, 2002

2. 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

3. 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 FIs Poor Cities City Poor City Poor

4. 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

5. 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?

6. 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’

7. 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