Housing the Poor in Asian Cities: Housing Finance

The objective of this Quick Guide is to introduce some of the key concepts of housing
finance and to provide a quick overview of how housing finance works, especially
as it relates — or fails to relate — to the urban poor. The guide presents information
about both the formal and informal systems of delivering housing finance, and
examines the key advantages and drawbacks of both systems when it comes to
directing housing finance to the city’s poor.

The basic mechanisms of formal and informal housing finance systems may be
similar, but by removing many of the barriers that make the formal system inaccessible
to the poor, the informal system has in many places become the chief system
for delivering what meager housing finance does actually reach the poor. The guide
closes with a brief description of some new and unconventional housing finance
strategies being tested and expanded in Asia, which are attempting to link formal
sources of finance with poor communities and the informal systems by which they
live their lives and build their housing.

This guide is not aimed at specialists, but instead aims to help build the capacities
of national and local government officials and policy makers who need to quickly
enhance their understanding of low-income housing issues.