As violent protests over lack of housing and service delivery erupt in Cape Town, it is useful to contrast the city’s experience with that of Durban. Cape Town’s problems can be understood from various angles. It is no worse off than Durban in terms of human settlement needs — indeed, in terms of absolute numbers, its problems pale in comparison.

Throughout the developing world appropriate microfinance has helped address the poverty and vulnerability of millions of poor households in the informal sector. The United Nations has declared 2005 the Year of Microcredit. With a few exceptions, however, South Africa lacks the sort of poverty-oriented microfinance institutions common in Africa, Asia and Latin America. Why is this?