The Urban Poor Development Fund provides low-interest loans for housing, improved settlements and income generation for the benefit of those urban poor communities that are actively involved in a community savings process. Besides proving a much-needed source of affordable credit, the Fund supports the poor by adding capital to community savings accounts to help community residents overcome financial constraints and provide innovations in housing and settlement improvements, as well as negotiated tenure formats that demonstrate fresh solutions and test new kinds of institutional set-ups.
In 2004, the City of Phnom Penh launched a partnership with the UN Habitat for urban poverty reduction to strengthen the human dignity of the urban poor. The communities built working relationships with the Phnom Penh municipality and negotiated the financing and execution of site improvements identified in the community. The goals of the partnership were to strengthen the self-confidence, competence and dignity of the urban poor by reducing their poverty, vulnerability and social exclusion through multiple initiatives. These initiatives included empowering communities to improve their access to affordable basic services, improvement of community-based infrastructure in Phnom Penh and by encouraging the community in assisting the municipality in achieving poverty reduction goals.
Direct involvement of the poor communities was prioritized and considered crucial to the plan?s success. As a result of community engagement with the municipality, over 160 new community organizations were formed and more than 350 improvements in community infrastructures and basic urban services were achieved. More than 31,000 families benefited from these improvements, which also empowered participating communities.