The Tamil Nadu Urban Development Fund (TNUDF) is a municipal development fund, operating in the southern Indian state of Tamil Nadu since 1996. The Fund has uniquely positioned itself as a strategic intermediary linking capital markets with development projects and capacity augmentation in the urban areas. The Fund has been widely held as a success, in connecting the hitherto inaccessible financial markets and institutions to local development projects and poverty eradication. It has brought to the fore an exemplary kind of network among various stakeholders of lenders and borrowers, that included the multilateral donors, domestic financial institutions, local governments as well as beneficiaries in development financing. TNUDF case is unique that needs to be replicated, in the urban and semi-urban areas of developing countries needing investment in social and economic infrastructure.