WaterCredit, an initiative of Water.org, puts microfinance tools to work in the water and sanitation (watsan) sector. WaterCredit is the first comprehensive program of its kind that connects the microfinance and watsan communities to scale up access to credit and capital for individual- and household-based watsan needs. Through WaterCredit, Water.org aims to channel and redeploy financial resources more efficiently, enabling increasing numbers of people to meet their water and sanitation needs through demand-driven, market-based services.
Under the WaterCredit model, Water.org provides targeted subsidies and technical assistance to microfinance institutions to enable the development and launch of water and sanitation loan portfolios. The approach incentivizes financial institutions to get into the business of water and sanitation yet requires them to provide commercial loan capital to finance the watsan loans. With newfound access to new water and sanitation loan products, poor households are empowered to finance their own water and sanitation solutions. Households are able to invest in the watsan technologies that best suit their needs, and as loans are repaid, the capital is redeployed to new borrowers. The WaterCredit model recognizes that that those living in poverty are not equally poor and that everyone spends money to meet daily water and sanitation needs. By segmenting the market and developing market based solutions where appropriate, Water.org is able to maximize the impact of its philanthropic investments, and in turn, increase the number of people gaining access to life saving water and sanitation.
WaterCredit Indicators and Metrics (as of September 2012)
Total Investment in MFIs: Water.org has invested $6.2 million in WaterCredit
Implementing Partners: 24
Number of Loans Disbursed: 88,657
Value of Loans Disbursed: $14.1 million
WaterCredit Beneficiaries: Over 523,000 people have benefited from WaterCredit
Cumulative Loan Repayment: 97 percent
Average Loan Size: $162
Borrower Interest Rates: Market driven, typically 10-24 percent annually
Repayment Periods: Generally between 12 and 24 months
Women and WaterCredit: Approximately 87.5 percent of all borrowers are women