Water.org's WaterCredit

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Water.org's WaterCredit

Water.org's New Program, WaterCredit, Will Invest $2 Million Connecting Micro-finance Tools to the WASH Sector

WaterCredit is the first program of its kind that puts micro-finance tools to work in the water, sanitation and hygiene (WASH) sector. By connecting financial institutions to communities in developing countries in need of clean water and toilets.

Water.org is also looking to expand the WaterCredit programs by working with a diverse set of financial institution partners and funders. So far, Equity Bank, Kenya Women Finance Trust, SMEP and Post Bank Uganda have developed water and sanitation products after successful market assessment and prototype development.

Water.org Director of International Programs, Dr. Richard Thorsten:

"We are keen on identifying and prioritizing new markets and models for WaterCredit expansion; including new products and channels for deployment and directing "smart subsidies" to microfinance institutions to establish WaterCredit portfolios. Water.org now has seven microfinance (MFI) partners engaged in WaterCredit in Kenya and Uganda, and we expect to bring on board a few other MFIs in Ethiopia before the end of this year."

WaterCredit Overview

WaterCredit is the first program of its kind that puts microfinance tools to work in the water, sanitation and hygiene (WASH) sector. By connecting financial institutions (FIs) to communities in developing countries in need of clean water and toilets, small loans are then made to individuals and households. As loans are repaid, they can be redeployed to additional people in need of safe water, reducing the need for subsidies, which can then be freed up to help those who need it most.

The Benefits of WaterCredit

The benefits of WaterCredit are numerous, including:

  • Dollar for dollar, catalytic philanthropic investment enables the water and sanitation needs of more people to be met than with traditional grants because WaterCredit is designed to leverage additional commercial and social capital. This frees up grant capital to serve the poorest of the poor (for whom microcredit is not a viable solution).
  • Empowerment of female clients and their families.
  • With access to water and sanitation via WaterCredit, time (which was previously spent fetching water and/or in ill health) can be spent on productive activities such as income generation and education.
  • WaterCredit borrowers are able to increase their families' discretionary, disposable income due to cost savings of having a water and/or sanitation connection (rather than paying the local "water mafia" price).
  • WaterCredit borrowers and their families enjoy better health, as the spread of water-borne disease is reduced.
  • FIs gain in-house water, sanitation, and hygiene expertise.
  • Small water- and sanitation-based enterprises can be developed over time.
  • MultipleMillennium Development Goals (MDGs)are addressed simultaneously.

Source: Creative Ambition

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