Household Savings and Residential Mobility in Informal Settlements in Bhopal, India

Strategies to address the problem of informal settlements have focused on slum upgrading, sites-and-services programmes and tenure security. There has been less attention on what enables slum-dwellers to transition into the formal housing sector without direct intervention. This paper investigates residential mobility among slum-dwellers in Bhopal, India. One in five households succeeds in leaving a slum settlement and a major determinant is the ability to save on a regular basis. Due to limited outreach of institutional housing finance, most slum-dwellers rely solely on household savings for purchasing a house. These findings underscore the urgent need to improve savings instruments for slum-dwellers and to downmarket housing finance to reach the poorest residents of rapidly growing cities in developing countries.