Asia-Pacific, Credible Future - Can Micro Loans Make a Macro Difference?, Development & Aid, Headlines

NEPAL: For Squatters, Kathmandu Carries Scent of Reform

Marty Logan

KATHMANDU, May 25 2005 (IPS) - Crossing a bridge over the Bagmati River the women inside the tiny three-wheeled taxi or ”tempo”, clamp their shawls over their faces to block the stench of the polluted water.

Kathmandu’s filthy rivers are sometimes seen to symbolise the health of Nepal’s capital city, home to more than one million people and some say the fastest growing urban centre in South Asia.

In 2003, media reported that the World Bank found the city – nestled in the fertile but pollution-trapping Kathmandu Valley – had the dirtiest air in Asia. This infuriated the then city mayor Keshab Sthapit, who threatened to sue the Bank.

Today an incoming wave of internally displaced people (IDPs) fleeing fighting between the army and Maoists is further testing the city’s resources, “putting enormous strain on urban services such as health, water supply, education and transportation,” according to the United Nations Development Programme’s Project on Cities.

But a 20-minute drive from the ‘tempo’ bridge, on one bank of the smelly Bagmati, a group of residents you would expect to be struggling say life in the capital is improving.

”There have been tremendous changes” in the Sankhamul squatter community in the past 30 years, says Hukum Bahadur Lama. One is the office, which houses the national federation of squatters’ groups, the Society for Preservation of Shelters and Habitations in Nepal (SPOSH), of which Lama is chairman.

In the middle of a long, one-storey brick row house, the office stands out with its freshly painted green face and huge black water tank nearby, a back-up supply for the 120 families who live here. Inside, the floor is covered with tile, corrugated iron sheets form the roof and behind Lama’s small wooden desk is a tall filing cabinet. On the other side of the wall is a meeting room.

An original resident of the colony, Lama says the first families who came here created houses out of bamboo and plastic. They had no electricity, water or sewer services. Today all the community’s homes have toilets, power lines run along the packed dirt road, and every child attends school.

Residents partly credit a savings and borrowing programme introduced by the Lumanti Support Group for Shelter, a local non-governmental organisation (NGO), which also helped the community get organised. ”Now we are united and we can raise our voices … we don’t fear being evicted,” says Lama with a smile.

Further along the row of houses, past chickens that pace in small wooden cages and two small girls splashing at a hand pump in front of their house, Sarmila Gurung smiles in her newly renovated home, pointing out the wooden doors that have replaced iron sheets.

Her dwelling now has three rooms, a renovation financed by a 40,000-rupee (567.82-U.S.- dollar) loan from the savings cooperative that all the settlement’s families belong to (though only women can be members). Gurung has paid back half the money and will not be able to borrow again until the loan is fully reimbursed.

According to Lumanti’s Upendra Shakya, 100 percent of the loans made by the three co-ops in the micro finance programme are repaid, although some borrowers are late and must pay a penalty.

Gurung, who sells home-cooked food to construction workers while her husband supplies sand to building sites, says she initially was worried about reimbursing the money, but the family has already repaid a loan for a motorcycle. Today she is a board member of the Gyanjoti Cooperative.

Lumanti started this micro finance programme in squatter areas and slums in 1996 with eight savings and credit groups of about 18 members each. Seven years later that number had grown to 122 and the groups had pooled their resources to create three co-operatives that they registered with the government.

Today the co-ops control eight million rupees (113,571 U.S. dollars), says Lumanti Director Lajana Manandhar. Since the NGO started working with squatters, she adds, ”the biggest achievement is the communities (themselves) have changed … we have been able to get them organised.”

Many of the more than 50 squatters’ groups in Kathmandu ”are now invited, consulted by the government departments,” she added in an interview in the Lumanti office.

The authorities have lagged behind, Manandhar said. For instance, the national government made reducing poverty the focus of its current five-year plan but still neglects the urban poor to focus on rural areas.

An official from the Kathmandu Metropolitan City (KMC) told IPS that social welfare is not a major priority for his government.

But Manandhar also sees signs that these attitudes are changing. One year ago the KMC – along with the Asian Coalition of Housing Rights, Slum Dwellers International, Action Aid Nepal and Water Aid Nepal – created the Urban Community Support Fund to give low-interest loans to the city’s poor for things like housing, income generation and water and sanitation facilities.

This year Lumanti signed a three-year memorandum of understanding with KMC’s department of urban development. The partners’ first project will be a study on relocating five squatter communities.

Former mayor Sthapit has a plan for Kathmandu’s squatters, and every other ”opportunity” – he rejects the word ”challenge” – facing the maligned capital.

He would divide the lands where squatters’ live into three pieces: one for a municipal road, one for a housing development project and one to be sold. The revenue from the lands appropriated for sale would finance development.

The new housing area would also include services like health clinics and space for the former squatters to open businesses. ”They will have jobs, they will have rooms, they will have other facilities,” Sthapit said in an interview in his house on a busy corner of downtown Kathmandu.

But first, he added, the central government must pass a pending bill that grants KMC far greater powers than it wields today. Then, says the popular former mayor, who plans to run in an election announced for this year, he could also deal with the capital’s clogged roads and hazy skies.