Abstract
This paper suggests that too much attention may be given to financial sustainability within projects whose objective is to reduce urban poverty. External agencies might usefully recognize the long history and remarkable persistence that charitable giving and state redistributive processes have shown whilst markets sometimes fail. Experience suggests that poverty reduction - higher and more stable incomes, stronger asset bases, secure adequate-quality homes with basic infrastructure and services and protection from the law - may best be achieved by increasing the capacity of urban poor groups, individually and collectively, to draw on the market, the state and charitable finance (including grants or soft loans from international and domestic sources) to reduce their poverty. It is support for this capacity of urban poor groups that needs to be sustained. Market mechanisms can play important roles - as shown by the key role of savings and credit schemes organized and managed by the urban poor themselves. But these are a means, not ends in themselves. And market mechanisms may be most easily and readily used by those who are not the poorest.