> Posted by Madeleine Dy, International Programs Manager, Water.org
More than 100 leaders from the water, sanitation, and finance sectors came together October 21-22, 2014 for the second East Africa WaterCredit Forum in Nairobi to share progress made and to brainstorm lasting solutions to the water and sanitation crisis affecting East Africa. In Kenya, for example, access to safe water supplies is 59 percent and access to improved sanitation is 32 percent.
Water.org, in partnership with The MasterCard Foundation, convened the Forum, part of Water.org’s five-year collaboration with the Foundation to bring safe water and sanitation to economically challenged communities in East Africa through the WaterCredit approach. Since 2010, the WaterCredit initiative in Kenya and Uganda has empowered almost 115,000 people to obtain financing from seven financial institutions (FIs) for long‐term, sustainable water and sanitation solutions.
In Kenya, Water.org’s four FI partners have disbursed more than 21,250 water and sanitation (WASH) loans serving more than 97,300 people to date. Over the last year, Water.org’s WaterCredit initiative expanded into Uganda, launching partnerships with PostBank Uganda and FINCA International. In addition, Water.org has worked with VAD Microfinance in Uganda since 2010, which has reached more than 7,500 individuals through water and sanitation loans. PostBank Uganda began disbursing WASH loans in July 2014 and has already offered loans to more than 9,500 individuals, including to 12 schools and community projects. FINCA International is currently conducting a market demand study in Uganda before developing its water and sanitation products.
At the WaterCredit Forum in Nairobi, participants discussed these accomplishments, reviewed lessons learned, and brainstormed long-term solutions to access safe water and sanitation in East Africa.
Some of the highlights of the Forum included high-level panels. One panel discussed why sanitation loans have not been as successful as water loans and how to promote improved sanitation in the region, with representatives from Kenya’s Ministry of Health, the World Bank’s Water and Sanitation Programme, Water for People, and two FIs sharing on-the-ground experiences. Some of the challenges on the uptake of sanitation loans are that the technology options, repayment terms, and/or price don’t fit the clients’ needs; other issues are the availability of sanitation products or the awareness or benefits of them.
Another panel saw a lively dialogue on collaboration between financial institutions and manufacturers in the water and sanitation sector, with insights from Pureit-Unilever, Polytanks Kenya, and two other FIs. The discussion concluded that major contributors to the success of the WaterCredit initiative so far have been strong partnerships between the MFIs, manufacturers, water and sanitation non-governmental organizations, and other stakeholders like microfinance networks and government.
Key outcomes of the Forum were identifying barriers to WaterCredit and brainstorming solutions to scale the initiative. The barriers included high interest rates on loans, delay on water and sanitation product delivery by manufacturers due to high demand, and a need for loan capital by the MFIs. Some of the solutions discussed were increasing efforts in developing more public-private partnerships and national advocacy to create an enabling environment that supports WASH financing; strengthening the sanitation value chain; and linking MFIs with social investors for WASH loan capital. Another outcome of the Forum was the sharing of lessons learned, best practices, and resources (such as Water.org’s WASH Microfinance Toolkits).
Water.org Director of International Programs, Dr. Richard Thorsten, said there is more demand than public and private funding available to finance global water and sanitation needs. He noted that there will never be enough subsidies in the world to solve these challenges, hence new models of financing and market engagement are required to achieve the goal of universal water and sanitation access.
“Many families, even though they are ‘poor’ by traditional economic definitions, are still spending countless dollars of precious disposable income each day on the most basic water and sanitation services they can afford,” he said. “Access to larger sums of financing could help them break free of the vicious cycle of poverty, and put in place permanent and sustainable solutions.”
As of August this year, Water.org had invested over US$9.7million in its WaterCredit programs in Kenya, Uganda, India, Bangladesh, Indonesia, and Peru, offering more than 370,000 loans, benefiting more than 1.7 million people. The organization is planning to invest more than US$2million in East Africa as part of ensuring accessibility to safe water and sanitation. To move forward with WaterCredit and meet its strategic and expansion objectives, Water.org anticipates working with a diverse set of financial institution partners and funders to attract additional capital to the WaterCredit ecosystem. In addition to Water.org’s seven FI partners engaged in WaterCredit in Kenya and Uganda, it expects to bring on board other FIs in Ethiopia before the end of the year.
Image credit: Water.org
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