New Learning Note Released on Financing Sanitation for the Poor in India by WSP and

> Posted by Ben Mandell, International Programs Manager, Water.orgAccess to safe drinking water and hygienic sanitation are true necessities for healthy families. Yet, access rates for water and sanitation remain stubbornly low in most low-income countries. The negative health implications can be dire and include diarrheal disease which can result in premature mortality and childhood malnutrition and stunting.  From an economic perspective, “The health consequences of poor sanitation are substantial and contribute to over US$50 billion in GDP loss annually,” according to a new India focused learning note jointly developed by and the World Bank Water and Sanitation Program (WSP).

In the learning note, and WSP, both active globally in working to expand access to water and sanitation, collaborate to share their research and findings on how household lending can help drive improved water and sanitation uptake as well as provide economic and social benefits to local financial organizations., through its WaterCredit program, provides capacity-building grants and technical assistance to create, pilot, and scale water and sanitation financing. Currently, WaterCredit provides funding to microfinance providers and NGOs to support the creation of programs and these partners then leverage funding from banks and capital markets to disburse loans to people in need. Accordingly, “ has provided US$11.3 million in subsidies to financial institutions and NGO partners worldwide, which in turn have disbursed over US$120 million in loans reaching 2.4 million people.”

The joint learning note presents an analysis of’s India loan portfolio of 245,000 loans and highlights three case studies of water and sanitation lending partner organizations: Grameen Koota, Hand in Hand, and Guardian. The key findings include:

  • Low income households desire water and sanitation loans – From the portfolio analysis of 245,000 loans, the average loan size was US$122, the average family monthly income was US$64, the average loan duration was 19 months, 94 percent of borrowers were women, and 97 percent of borrowers were rural.
  • Borrowers will repay water and sanitation loans – The report analysis showed that for the three partners, “The percentage of the water and sanitation loan portfolio at risk over 30 days ranged from 0 – 1.38 percent, well below the industry benchmark of 3-5 percent, and the 13.66 percent average for all financial institutions in India.”
  • Water and sanitation lending can be financial sustainable – Loan volumes and efficient operations can produce a financial return. The operating self-sufficiency ratio for Grameen Koota grew to nearly 107 percent and WSP’s two partners in Cambodia also achieved a greater than 100 percent operating self-sufficiency ratio.
  • Water and sanitation loans are income enhancing – Time savings, improved productivity, and other factors suggest that households can earn more income when they have access to water and sanitation facilities. “Before taking a loan, 53 percent of WaterCredit borrowers earned at least 3,000 Rupees (US$47.30) per month but after the loan this proportion nearly doubled to 97 percent.”
  • Household financing multiplies funding for social outcomes through efficient investments –’s US$11.3 million philanthropic investments resulted in US$120 million being disbursed by local financial organizations. By comparison, “For every $100 invested, 21 people gained access to improved sanitation. A traditional model would require ten times the funding.”

Household financing for water and sanitation solutions is still a new concept and there are many opportunities for improvement and expansion. To that end, the and WSP learning note aims to analyze the largest portfolio of its kind and the results offer several insights including that low-income households desire water and sanitation loans, are able to repay the loans, and that they benefit from the health and economic perspectives. For financial organizations, the benefits include substantial social return, low risk lending, and a modest financial return. For donors, public health stakeholders, and governments, water and sanitation household lending can be one of the most efficient and scalable solutions with the potential to attract the necessary large amounts of capital that are a prerequisite to achieving universal access to safe drinking water and hygienic sanitation.

The full version of the India Learning Note and a companion Global Learning Note can be found at

The World Bank Water and Sanitation Program (WSP) helps catalyze markets for water and sanitation services for the poor by providing technical assistance to governments, businesses, utilities and MFIs. WSP also strengthens the broader operating environment for service delivery by building the capacity of entrepreneurs, supporting research and development of new low-cost technology, and generating demand through education and marketing. is an international nonprofit organization that has positively transformed millions of lives around the world by providing access to safe water and sanitation. Founded by Gary White and Matt Damon, pioneers innovative, sustainable solutions to the global water crisis, giving women hope, children health and communities a future.

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