The Evolution of CLIFF


The Community Led Infrastructure Finance Facility, CLIFF, is a concept that was first implemented in India from 2002.

Based upon the findings of a research project sponsored by the UK’s Department for International Development (DFID) and conducted by Reall, then known as Homeless International, CLIFF began as a unique mechanism for financing organisations of the urban poor to build affordable housing at significant scale. In completing this research, we discovered that given the opportunity, the urban poor are good re-payers of loans. Secondly, our research found that Indian community-led NGOs were being denied access to market-based loans, despite them shouldering financial risk in their successful community projects. The research had uncovered a gap between the capabilities of these organisations and the finance they needed to build affordable housing at scale.

Meanwhile, the Indian government were committed to covering 70-80% of the cost of a house built by an NGO. However, these funds would only be reimbursed once the house had been completed. This combination of circumstances presented the ideal context for CLIFF intervention.

The model was quite simple: supported by DFID and the Swedish International Development Cooperation Agency (Sida), we funded Indian NGOs to deliver housing at scale, at rates that were affordable for the poor. Once the buildings were complete, the Indian Government would reimburse 70-80% of the cost back to the Indian partner organisation, who would use these funds to finance more housing. CLIFF 1's cyclical cost recovery technique allowed the Indian partners to achieve organisational sustainability, which continues to this day.

2002-2005: Sponsoring NGOs
to deliver housing at scale.
Costs recovered from the
Government, and used cyclically
to build more housing.

2005-2011: Moving towards
end-user cost recovery and away
from Government subsidy.
Working to develop in-country
Housing Development Enterprises
(HDEs).

2011-present: Became enterprise
oriented; providing loans to
HDEs and preparing for investment.


In the second phase of CLIFF from 2005 - 2011 the programme was adapted to remove the reliance on government subsidy and focus less on community mobilisation.

Following the success in India and with the continued support of donors, it was decided to extend the CLIFF model into 14 African and Asian countries. However, the government housing subsidy that existed in India was not available elsewhere. Instead, CLIFF 2 used end-user cost recovery at rates which were affordable for the poor.

CLIFF 2 also moved towards supporting in-country partners as opposed to community-led NGOs. Local organisations with expertise in housing development at the bottom of the pyramid were identified. With our support, these organisations would become Housing Development Enterprises (HDEs) – hybrid institutions with developmental mission objectives, alongside the capacity to deliver housing at scale through leveraging end-user repayment capital.

We recognised the potential that existed within the hybrid HDE model. To develop this further, from 2011 we became more enterprise oriented; trialling housing development techniques that are more commonly found in the commercial real estate market. We started to loan to HDEs rather than provide grant finance and increasingly projects were modelled to also cover operating costs.