This Brief considers the critical role of finance in community-led and local government-led urban development. Community-managed funds drawn from savings groups have long helped low-income groups cope with stresses and shocks. But these funds have grown in scale and scope and in their capacity to develop productive partnerships with local governments, in order to meet basic needs and reduce urban poverty.

The financial processes of community funds can be designed to draw in even the lowest-income groups, both to meet their needs and to bring them into decision-making processes. As described in this Brief, community-controlled finance can catalyse action to challenge marginalization and establish new development options. It changes relations, enabling neighbours to work together, and allowing community organizations to network at the city scale. Its ability to do this depends on vision and commitment, as well as micro-level organization.