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Building Prosperity through Neighbourhood Development
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Project description

Kisumu is the third largest town in Kenya, with an estimated population of approximately 500,000. Approximately 60% of the Kisumu population lives in informal settlements, and the population continues to expand as people from the districts surrounding the Lake Basin move into the city. The key challenges that Kisumu faces today are urban sprawl and slum expansion, a high level of unemployment and inadequate service delivery.
Location: Kisumu
- Urban Finance Section
Partner: French Development Agency and the Millennium Cities Initiative, Municipal Council of Kisumu and local branches of private banks HFCK, K-Rep, National Housing Corporation and local community groups and MFIs.
- Water Sanitation and Infrastructure
- Urban Finance
Budget: USD 1,000,000

Focus Area(s)

- FA5: Strengthened human settlements finance systems


The UN-HABITAT Urban Finance team has identified potential innovative housing and infrastructure finance opportunities in collaboration with the French Development Agency and the Millennium Cities Initiative, in order to generate a sustainable citywide slum upgrading and affordable housing development project , building on existing capacities in Kisumu with the Municipal Council of Kisumu and local branches of private banks HFCK, K-Rep, National Housing Corporation and local community groups and MFIs.This appraisal has demonstrated that there is the opportunity to develop a Local Finance Facility project with a revolving credit enhancement fund to leverage public-private partnerships into affordable and social housing for Kisumu as a part of the municipal and housing finance strategy for Kisumu.Generating a citywide housing finance development project will allow MCI, MCK, UN-Habitat and AFD to interact with the different multilateral and bilateral donors already involved in urban development of Kisumu, and attract international donors, private companies, commercials, MFIs and cross border funds as investment into the municipality.It is also important that this initiative addresses the entire low income population in the city. Given the history of recent donor interventions in housing in Kisumu, which have proceeded on the basis of in depth intervention in specific communities, the municipality in Kisumu would welcome as well a city-wide effort accessible to all low income borrowers rather than only those members in selected geographic subdivisions of the city.This Local Finance Facility concept of UN-HABITAT has been implemented successfully in Ghana, Tanzania, Indonesia and Sri Lanka.  This project in Kisumu would draw from UN-HABITAT experiences and lessons and is a promising opportunity to extend the concept to all the Millennium Cities in Africa.


To improve the delivery of social and affordable housing and infrastructure in Kisumu, Kenya, through the development of a sustainable local credit enhancement facility in cooperation with existing local capacities and municipal, bank, developer and community group involvement to reach the 60% of the city population living in informal settlements (300,000 people or approximately 60,000 family units).

Target Group

Resident of Kisumu, and the Kenya government .

If you may be interested in funding this project, please contact us: info.rmu@unhabitat.org
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