Bridging people’s process and city structures with city-based Community Development Funds (CDFs)
Over the past ten years, community networks in cities around the country have been setting up a variety of local community funds to address various needs: welfare funds, housing savings funds, children’s savings funds and environmental savings funds. All these funds gave community members more ways to save, more ways to participate, and more ways to invest in building community-based systems for looking after their immediate needs, using their own pooled resources. Eventually, a few pioneering community networks felt the need to bring these funds together under the umbrella of a single city-based community development fund (CDF). CDFs are an independent financial mechanisms which community networks in a city can control themselves, within their own constituencies, and CODI gave its full support to the idea. A series of national meetings were convened to discuss the issue and to begin exploring ways for networks in each city to financially stand on their own feet, as much as possible.
City-based CDFs, which are managed by community networks and link together all the savings groups in city, are not just a way of making locally-controlled financial systems for the poor, but of pooling local resources, strengthening relations and collaborations with their local governments, and pulling other poor communities into the citywide development process. CDFs give community networks more flexibility in how they respond to urgent needs within their city and more scope for addressing poverty in their cities in more locally-driven, more long-term and more partnership-based ways.
The first city-based CDFs in Thailand were set up in 2009, by two pioneering community networks in the northeastern town of Chum Phae and in Bangkok’s Bang Khen District, where the smaller funds these networks had already been running were brought together under one umbrella and topped-up with small capital seed grants of $30,000 each, from the Asian Coalition for Housing Rights (ACHR). CDFs in five more cities followed in 2010, also supported with ACHR seed grants of $20,000 each. The establishment of these first city funds generated a lot of excitement, and the city fund concept was taken up enthusiastically by community networks across the country. By January 2019, CDFs were fully functioning in about 60 Thai cities.
When the CDFs started forming, it seemed natural to bring the community-managed welfare funds under their umbrella, and CODI began channeling seed grants of 20,000 baht ($670) per city for community-managed welfare through these new city funds. This money was very little, but it was sufficient to bring people together to discuss their needs and set up their own community welfare system, using the mechanism of the new city fund. Community networks also began adding their own regular contributions to these city funds and using them to finance a variety of other community projects, including housing, upgrading, livelihood and community enterprises.
Most of the Thai CDFs are now composed of several distinct funds, for specific purposes (such as housing, welfare, insurance, livelihood and upgrading), which are managed together under the umbrella of one city-level CDF. In most CDFs, these funds are kept financially separate, with separate community contributions, separate membership, separate accounts and audits, but managed by a single committee, made up of representatives from the communities and networks that are members of the CDF. Many of the CDFs started with the welfare funds (to which all community member usually contribute one-baht-a-day, or about $1 a month), and many CDFs also have savings funds (in which community savings groups deposit an agreed-upon portion of their monthly community savings and individual savers also invest in shares), and housing insurance funds (in which members of communities that have completed Baan Mankong housing projects contribute 200 baht per year, or about $6).
DIAGRAM 1: STRUCTURE OF CITY-LEVEL COMMUNITY DEVELOPMENT FUNDS (CDFs)
LINKS TO DOCUMENTS ON CITY FUNDS:
- CODI in ACHR Community Funds Newsletter Feb 2002.pdf
- CODI in ACHR Savings & Fund Newsletter Nov 2007
- Community Finance in 5 Asian Countries April 2018.pdf
- Community Finance Seminar Bangkok Nov 2007.pdf
- Lessons from CODI on co-production Oct 2018
- The role of housing finance in achieving shelter for all Nov 2002