The process of construction of low-income settlements in developing countries has been frequently regarded as something entirely different from what takes place in the "formal" part of cities. However, such a process is also permeated by market relations. This work demonstrates the pivotal role played by small-scale private contractors in the producton of housing for the poor. Such contractors have gained wide attention in development thinking and assistance. From analysis of papers and policies related to the issue, and using research investigation and policy analysis, recommendations are made.