It is common knowledge that housing conditions in the Third World are very poor for large sectors of the population and that, in many nations, they are deteriorating. One project within the International Institute for Environment and Development’s Human Settlements Programme has been studying the extent to which the major multilateral aid agencies have been providing funds for housing, services or other settlement-related projects. This project has produced a number of papers describing the lending activities of 15 multilateral agencies operating in the Third World in the settlements field.’ Three of the agencies included in our study, the World Bank Group (WB), the United Nations Development Programme (UNDP), and the OPEC Special Fund, operated in Africa, Asia and Latin America. Others are regional agencies: the Inter-American Development Bank (IDB), the Caribbean Development Bank (CDB) and the Central American Bank for Economic lntegration (CABEI) in Latin America and the Caribbean; the Asian Development Bank (AsDB) in Asia; and the African Development Bank Group formed by the African Development Bank (AfDB) and the African Development Fund (AfDF) ~ in Africa. The Islamic Development Bank (IsDB), the Arab Bank for Economic Development in Africa (BADEA) and the Arab Fund for Economic and Social Development (AFESD) support projects in Arab countries. The European Development Fund (EDF) has its origin in an agreement between the European Economic Community and overseas nations and territories which had special relations with EEC member nations. (Today, around 50 independent nations from Africa, Asia and the Pacific have associate status with the EEC; most are former colonies of EEC members in Africa.) Finally, we included the Andean Pact’s financial institution the Andean Development Corporation (ADC) and the Latin American Bank for Savings and Loans (LABSL) which is only active in the housing field since its aim is to support national housing institutions in Latin America. The main purpose of this paper is to clarify which size of settlement is most favoured by multilateral aid backed settlements projects. It is to this that Sections 5 and 6 are addressed. To give the reader some background to this subject, Section 2 gives a brief summary of how and when the agencies began their involvement in housing and settlement-related projects, Section 3 describes the tlistribu-