How can microfinance enhance access to water and sanitation for the poor?
This paper identifies opportunities to address demand for water and sanitation (watsan) at the Bottom of the Pyramid (BOP) through effective business models. Over 1 billion people lack access to safe drinking water and basic sanitation facilities worldwide. One of the U. N.’s Millennium Development Goals (MDG) is to reduce this number to half by 2015. About 100 million people need to gain access to watsan per year to meet the MDG target.
The paper presents findings on the state of the watsan sector in India. It describes demand and supply characteristics, key design elements for successful watsan business models and the role of microfinance. Conclusions include:
- Key demand areas for business intervention are access to water, enhancing water quality and access to sanitation;
- Private sector interventions can play a critical role in addressing unmet demand through well designed solutions that are fairly priced, scalable and sustainable;
- Microfinance could enable borrowers to spread the connection cost over a period of time, thereby lowering entry barriers to affordable water and sanitation;
- Meso level financing vehicles will have a role to play in catalyzing and effectively supplementing watsan efforts focused on low income segments.
Posted on October 04, 2012