This paper looks at the role of microfinance institutions (MFIs) in addressing the water and sanitation gap. Through a combination of a portfolio analysis; programmatic, independent evaluations; and WSP analyses, it shows that water and sanitation loans have strong social and economic benefits to low-income households and that partnerships with MFIs can help NGOs and governments better leverage investements.
- USD 120 million in microfinance lending has resulted in more than 573,000 household water and sanitation loans reaching more than 2.4 million people.
- Water and sanitation loans have risk profiles comparable to other loans.
- Approximately 80 percent of WaterCredit borrowers earn less than USD 2 per day, but have repayment rates of more than 99 percent.more than 573,000 household water and sanitation loans reaching more than 2.4 million people.
- Household water and sanitation lending stretches the impact of each philanthropic dollar invested by 10 times.
- The Reserve Bank of India recently added water and sanitation infrastructure to the priority sector lending, which could release USD 40-50 billion into the sector.
- Loan recipients enjoy socioeconomic benefits. In India, 39 percent of borrowers reported increased safety and nearly 25 percent of women were able to increase incomes due to greater productivity.