A common problem in emerging markets is high levels of inflation, which discourages savings combined with undeveloped capital markets. These problems conspire to limit any activities that would rely on the availability of long-term funds. A solution to this problem seen in a number of emerging markets is the creation of housing provident funds (HPFs). They are essentially long-term saving schemes that operate through mandatory contributions. While this can be an efficient and rapid way of raising long-term funds in environments where this would not otherwise be possible, it can also engender a number of costs.