Dennis Shea, the Assistant Secretary of the U.S. Department of Housing and Urban Development, yesterday stressed the need to harness private sector resources to meet the needs of the urban poor. He added that while national and local governments were willing to put in equity in the form of land for slum upgrading, commercial capital was still not easily available.Shea was speaking to participants attending a dialogue on Urban Resources, which is being held as part of the Second World Urban in Barcelona . Panellists, including representatives of national and local governments, community-based organizations and financial institutions, gave examples of capital mobilization from the private sector to meet the needs of slum dwellers. In Johannesburg , South Africa , for instance, municipal bonds are being issued to fund basic services in slums.
Panellists also highlighted the fact that despite their lack of access to urban resources and finance, the urban poor in many cities still manage to build settlements. Their efforts at incremental housing must, therefore, be recognized by the finance sector, and appropriate finance products must be developed to meet their needs.
Panellists from financial institutions also raised the issue of setting appropriate interest rates that would serve the needs of the urban poor. This would require support from people themselves, who will need to save regularly, but also from governments who need to assure secure tenure. On their part, development finance institutions need to provide adequate credit guarantee mechanisms to reduce risk and make interest rates affordable.
The dialogue concluded with a set of recommendations, including adapting commercial banking and housing finance systems to the needs of the urban poor and ensuring that slum dwellers are the dominant partners in slum upgrading initiatives.