The Community Led Finance Facility (CLIFF) is a financial mechanism that facilitates access to capital by organisations of the urban poor. Now in its third year of operation in India, as of December 2004 CLIFF capital funds had supported ten community-led development projects: eight housing developments, providing safe, secure and affordable shelter with secure tenure for 2816 households; and, two sanitation projects designed to benefit over 200,000 families living in slums in Mumbai and Pune, both in the state of Maharashtra.

A main aim of CLIFF is to leverage the financial and non-financial assets of slum dwellers so as to access resources from the public and private sectors. CLIFF has allocated capital funds of some GBPS£P4.2 million, which is projected to produce revenues of about £12 million, including £4.5 million in government contracts and subsidy payments, and £7.2 million from the sale of residential units. As at December 2004, a total of £1.7million has been leveraged from private sector banks.

Central to the CLIFF approach is that it responds to local demand and local capacity. It does not seek to plan, manage and implement slum development projects conceived by professionals, rather to catalyse support for large-scale solutions developed by poor communities and the organisations with whom they work.

CLIFF works with poor communities and their networks that have the capacity to manage money, usually built up through experiences of community-based savings and credit schemes. CLIFF helps those communities manage and mitigate the risks of their development projects, including political and financial risks, thereby helping them to achieve greater scale. For example, CLIFF-financed projects have reduced the delays in obtaining permissions from city and state authorities, which in turn reduces delays in receiving subsidies, contract payments and other revenues. An outcome of this process are precedent-setting for pro-poor changes in government policy and practice.

During the course of 2005, the first steps were taken to initiate the second CLIFF pilot scheme, this time in Nairobi, Kenya. The pilot will be undertaken in the huge Kibera slum by Kenyan partners Pamoja Trust, and Muungano wa Wanavajiji.