Like any economic system, the sanitation economy includes supply and demand-side stakeholders and preferences. Historically. WSS practitioners have often focused more on the supply side (the acronym itself commonly means “water supply and sanitation”). But the demand side is critical too. As Chief Impact Officer for Water.org, I’ve overseen more than one hundred partnerships and interventions designed to improve access to water and sanitation solutions through innovative finance. Along the way, we’ve learned a great deal about the demand for better sanitation among those living in poverty.
Healthy and Latent Demand for Better Sanitation
Water.org’s WaterCredit solution has created new markets for the use of microfinance for household-level water and sanitation improvements across thirteen countries. To date, participating local financial institutions have disbursed over $1.8B in loans which have translated into more than 22 million people reached. About ½ of this impact has occurred just in the last three years. Although we first conceived of WaterCredit as a water solution in 2003, sanitation loans now account for 60% of our partners’ cumulative WaterCredit portfolios. Millions more people are able and willing to finance better toilets and other sanitation improvements. Governments and other stakeholders are taking notice. In India for example, our team and partners have been an important collaborator in the national government’s Swachh Bharat Mission – bringing in financing for people to improve sanitation and remain open defecation free.
People in Poverty Repay Sanitation Loans
Our global repayment rate for WaterCredit loans is 99%, and nearly 90% of borrowers live under $6/day (adjusted for local purchasing power). Water.org and its partners have demonstrated that families in poverty can be customers who have preferences about what they want and are able and willing to repay the loans they make for sanitation when offered on reasonable terms. Repayment rates for sanitation loans perform at the same level or better than other loans disbursed by microfinance institutions.
Women Are Leading the Way
Nearly 90% of WaterCredit customers are women. Female participation in WaterCredit lending empowers women to become decision-makers while also enabling them to provide their families with the safety, dignity, privacy, and health benefits of having improved sanitation in or next to their homes. It further builds their credit history to access additional financing for other needs and services. And our financial institution partners know that banking on women is great for both their financial and social bottom lines.
Join us at the Global Sanitation Economy Summit so we can work together to engage those living in poverty as customers and citizens within the Sanitation Economy!