1. INTRODUCTION
The ACHR General Meeting held in April 1998
identified the establishment of a "regional fund" as a new
initiative to be taken up by ACHR for coming years.
Over the last several years, countries in the region have seen the
creation of various types of local funds in support of savings and credit
initiatives of the urban poor.
Among successful cases are those which not only contributed to economic
livelihood betterment through credit facilities, but also encouraged
community organizing, supported people-initiated settlement development
processes and facilitated linking of poor groups with other urban actors.
Some of such initiatives are now being introduced trans-nationally.
International linking is a natural trend after a number of groups have
tested and accumulated local experiences in individual credit activities
on a project-by-project basis.
We could now conceive a regional mechanism, in order to pool experiences
of national and local funds and assist in disseminating such initiatives
to new cities and countries.
2. CONCEPT
Discussions at the ACHR meeting suggested that
there may be two alternative possibilities in terms of the form of such a
regional mechanism
(1) a concentrated fund (money pool) created in
the region, accompanied by a team of technical advisors, and
(2) an agency for networking of existing local
funds and for liaison between donor agencies and banking institutions on
the one hand and local funds and groups on the other. Such mechanism may
therefore be called, at the moment, "regional facility" or
"regional fund". A regional facility / fund may of course absorb
the network and liaison functions as well.
3. OBJECTIVE
The overall objective of the fund is to ensure
the access of urban poor groups in Asia to financial resources, so that
people's self-determined, self-initiated development processes be secured
of the implementability without dependent on external criteria. Indeed the
development support methods should have clear focus on "ensuring
access to a fund" rather than on "financing specific
projects".
Furthermore, in order to promote the ownership of the fund by the
end-users being urban poor groups, contribution toward the fund, in both
funding and management, will be sought from the groups.
The fund would be established as a separate entity from ACHR, though it is
a matter of discussion whether at the initial stage it is better
affiliated with ACHR.
4. FUNCTIONS
What may be expected of a regional facility /
fund would be the following
(1) act as a financial guarantor for local groups
when they approach local banks so that they can be duly recognized and
negotiate with the banks in favourable terms; or backstop a local fund
that provides such guarantee to local groups;
(2) provide direct and transitional financing to
innovative local projects on an experimental basis where there is no such
funding facility easily available; this may involve advisory and technical
support from the regional facility/fund, and should lead to larger-scale
operations attracting funding from government, commercial and
international agencies;
(3) provide emergency loans to a local fund in
order to stabilize local financial situations for the poor; this might
also be done through short-term loan provision from a local fund to
another trans-nationally with guarantee from the regional facility/fund;
(4) organize relevant international activities,
sharing of experiences and information among local funds and groups, so
that innovations can be transferred between sister funds and between
communities trans-nationally;
(5) link up with donor agencies, banking
institutions and relevant international forums; and advise them to channel
financial resources to local funds in a right amount, pertinent timing and
in proper terms, or to the regional facility/fund.
5. PROCESS
Preparatory work has started at ACHR, and
technical notes have been exchanged globally among professionals and
practitioners on the concept of the facility/fund. A reconnaissance survey
by F. Fernandez of the Philippines is scheduled during 2000 to be followed
by a regional technical workshop.
Copies of past correspondence among
several resource persons on the subject may be obtained.
