Rapid urbanization and an endemic lack of affordable decent shelter have compelled millions of people to live in overcrowded informal settlements. At least one-third of the urban population in the global South lives in such settlements, often lacking access to basic services such as electricity, running water and sanitation.(1) Access to decent-quality living conditions is essential for realizing the positive future envisioned in the UN Sustainable Development Goals and New Urban Agenda.(2) For the billions of people on low incomes across the global South, housing offers more than simply shelter – it represents the ownership of a financial, economic, social and cultural asset with the potential to break the poverty cycle. Improving access to housing can also yield several societal benefits, including increased political participation, macroeconomic growth and job creation. (3) However, the scale of the challenge remains enormous.

While delivering decent, affordable housing at scale is essential to global sustainable development, one formidable blockage is a lack of accessible housing finance for end users. People on low incomes have been perceived by lenders as high risk. They are excluded from financial systems and are forced to self-build using informal credit at exorbitant rates. This article engages with this problem, discussing practical examples and potential ways forward. It does so through case studies of models from Reall (a UK-based international development organization and social enterprise that promotes affordable homes) and its partner organizations in India, the Philippines, Nepal, Mozambique and Pakistan. The article evaluates the strengths and limitations of these models, and their potential for scaling up. Reall’s partners demonstrate that decent houses can be delivered at a cost that is accessible for potential low-income homeowners, while proving the viability of lending to borrowers in the bottom of the income pyramid. This is essential for demonstrating the commercial viability and impactful investment opportunity represented by affordable housing in urban Africa and Asia.