Micro-credit vs. Group savings – different pathways to promote affordable housing improvements in urban Bangladesh

Abstract

The housing condition of the urban poor is associated with the provision of housing finance. To address this challenge micro-finance has been considered as an alternative option in different literatures. Bangladesh is no exception in this regard. This paper highlights that the urban poor living in diverse forms of settlements in Bangladesh are making use of micro-credit from NGOs for housing-related upgrading activities that is not officially targeted for housing microfinance, but for supporting livelihood strategies. Another model of housing finance presented in this paper is community group savings programme which has been operationalised in Bangladesh over the last few years and promoted especially through the urban development projects by international agencies. This paper is an attempt to identify the salient features of these two provisions of finance in low-income urban settlements of Bangladesh. The paper follows a tradition of research in understanding different modes of housing provision of the urban poor that is related with the access to different form of finance to improve the housing condition of the urban poor. To do so two different cases from Gopalganj and Khulna city are presented, analysed and compared to deepen the understanding of how housing finance is operationalised in practice.