Ghana Local Finance Facility

Initially conceived as two municipal facilities, the Local Finance Facilities approach in Ghana is moving towards a strengthened national facility with over USD 1.4 million in capitalisation. Twenty projects are being developed and two have been completed. The facility in Ghana is set to reach 2,000 households by 2014. One community-led project is a ground-plus-two walk-up building with 31 residential units in the heart of the Amui Djor slum. Thirteen shops and a block of public toilets on the ground floor provide commercial cross-subsidisation to ensure affordability for the low income community. The Local Finance Facilities in Ghana provided construction financing and is working with local banks to secure take-out financing. High local interest rates and limited liquidity in the local market makes the work of Local Finance Facilities crucial to meet the slum and settlement upgrading and affordable housing needs in Ghana.

Indonesia Local Finance Facilities

Two Municipal Finance Facilities are being established in Solo and Yogyakarta, Indonesia. They are both quasi-government bodies housed in the municipality with a direct mandate to meet local and national government slum upgrading objectives. Expected government contributions are significant, both through staff and office support and in terms of direct cash contributions to a range of upgrading projects. The 15 projects under development range from progressive upgrading to infrastructure hook-ups, that are expected to reach over 3,500 people in the next four years. Innovative financing mechanisms such as Community Real Estate Investment Trusts will be piloted through the Indonesia Local Finance Facilities.

Sri Lanka National Finance Facility

The Lanka Financial Services for Under-served Settlements (LFSUS) facility is a national non-bank financial institution that provides credit enhancement to a growing number of projects across Sri Lanka. So far loans and guarantees have been negotiated for four projects. One project in Kirulapone, Colombo, has completed upgrading construction for 31 households. A loan was provided by HSBC Bank in February, 2009, and the project is managed by project partner, South Asia Partnerships Sri Lanka (SAPSRI), which is actively involved in the community. There are zero non-performing loans thus far. Three other projects are set to begin construction soon. LFSUS has attracted commitments from national government in further capitalisation, and has helped confirm secure land tenure so far for over 100 households in three projects. High land values in Colombo mean this secure tenure is a significant realised asset for low-income communities. The Lanka Financial Services for Under-served Settlements is expected to reach over 1,000 households by 2014, with expected leverage of over 6:1 of project value to credit enhancement funds.

Tanzania National Finance Facility

A National Finance Facility is currently being established in Tanzania with strong support from the Ministry of Lands and Housing, who plan to contribute to the Tanzania Financial Services for Under-served Settlements. Secretariat staff are being hired to ensure that projects can be developed and risk mitigation measures are well established. Strong community organisation and the link with Women’s Land Access Trusts are assets as the project goes forward.