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How Startups Can Address Challenges in Informal Settlements

Winnie Awuor July 1, 2025 2 min read

Informal settlements pose a significant challenge to urbanization, particularly in developing countries. However, startups, especially the ones focused on social entrepreneurship can help change lives for informal settlement dwellers.

Informal settlements, often known to as slums, are areas where people live without official approval and usually without proper planning. These neighborhoods are typically marked by overcrowding, inadequate infrastructure, and limited access to essential services.

Slams are mostly in urban regions, especially in developing countries, where rapid urban growth and poverty creates a significant lack of affordable housing. In Kenya, these settlements present some of the harshest living conditions. Places like Kibera, Mukuru, and Mathare stand out as some of the largest slams in Africa.

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According to 2024 report of Kenya Institute for Public Policy Research and Analysis (KIPPRA), Approximately 60 per cent of Nairobi population live in informal settlements. As of 2019, Nairobi County recorded a number of 200 informal settlements, occupying about 6 per cent of the county city’s land.

“Informal settlements in most cases have insecure land tenure, and most houses are developed on government land or privately owned land, and therefore construction of unplanned and poor house structures, with approximately 50,000 people per square kilometer. KIPPRA report reads.

“The houses are shanties and are constructed on 10 by 12 feet size pieces of land that houses approximately 4 persons against a global size of 215 square feet per person. Moreover, most houses lack windows for adequate ventilation and are made-up of iron sheets, waste materials which may create easy access to burglars and frequent disasters such as fires outbreak.”

How Did Informal Settlements Come About?

Informal settlements have popped up due to a mix of factors, such as Rapid Urbanization, Poverty and Lack of Affordable Housing and Inadequate Urban Planning. These issues bring about significant consequences for the environment, the residents, and the surrounding community. We’re talking about poor living conditions, insecurity, and crime, along with limited access to essential services. Environmental degradation is something that affects these areas time and again.

Startups are stepping up to tackle the challenges faced by informal settlements with some truly innovative solutions. They’re coming up with affordable housing options like modular homes and community-led initiatives for instance, Karmod a startup focused on creating affordable, modular homes for low-income families,

Moreover, Startups are also working on creative waste management and sanitation solutions, including mobile toilets and waste-to-energy systems. Company like M-Kopa Solar, is delivering solar-powered energy solutions to off-grid communities. The Urbanspace startup, on the other hand is all about developing digital platforms for urban planning and service delivery. harnessing digital platforms to provide essential services like healthcare, education, and financial service to the residents of these areas.

Tags: Informal settlement Startups Sustainability

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