Financing issues received major attention in the discussions of human settlement development policy through the preparatory process for Habitat II and at the Conference itself. This paper presents an overview of the existing knowledge and policy experience in housing finance and urban infrastructure finance taking note of changes in economic environment such as globalisation, financial liberalisation and decentralisation as well as progress made over the past two decades using cases of good practice. Despite the positive developments such as micro-finance and private-public partnerships, the financing challenge of today is no smaller than before. It includes how to tap the enormous wealth generated through continued urbanisation to improve the conditions in housing and basic services of all income groups and how to translate the willingness to pay of citizens into efficient, accountable and responsive service delivery. The solution requires not only financial innovation but also good governance and political commitment.
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