April Rinne, Where Is Microfinance Most Powerfully Linked with Sustainable Agriculture, Renewable Energy, Water and Sanitation to End Poverty and Mitigate Climate Change?

aterCredit

Accelerating Water Supply & Sanitation Markets for the World’s Poor

OVERVIEW

• What is WaterCredit?

• Key Elements of Model

• WaterCredit Snapshot

• Lessons Learned

• Future Plans & Expansion

WHAT IS WATERCREDIT?

WHAT IS WATERCREDIT?

• Initiative of Water.org

• Enables microfinance institutions (MFIs) to launch & expand scalable, sustainable loan portfolios focused on the WASH needs of their clients

• Forges linkages between MF & WASH sectors

• Financial innovation: individual/HH level

KEY ELEMENTS OF MODEL

KEY ELEMENTS OF WC MODEL

• MFI-led

• Demand-driven

• Smart Subsidies

• Product Development, Market Assessments, Capacity Building, Credit Enhancement

• Interest rates not subsidized = sustainable

• Loan capital typically provided by MFI = alignment

• Help MFIs overcome real vs. perceived risks of investment in WASH sector

• Tap into orthogonal trends & “adjacent possible”

WaterCredit Model

MFIs

JLGs

Households

WSH NGOs

Water.org

“smart subsidy” grant for start-up, product & capacity development costs

credit enhancements (guarantees)

Utilities

water &/or sewerage services

Banks &

Capital Markets portfolio growth capital

connection fees

loans loan

repayments

“smart subsidy” grant for technical assistance

& capacity development costs

technical assistance

technical assistance

other WSH improvements

toilets

RWH tanks

drip irrigation

WATERCREDIT SNAPSHOT

WATERCREDIT: SNAPSHOT

As of September 2011

• 23 WaterCredit MFI partners

• 4 countries (South Asia & East Africa)

• 53,000+ loans made 350,000+ people reached

• 97% global repayment rate (since 2007)

• 90+% female WaterCredit clientele

• $135 average WaterCredit loan size

• $2.9M catalytic philanthropic investment by Water.org

• $5.5+M additional social/commercial capital leveraged

WATERCREDIT LESSONS

WATERCREDIT LESSONS (1)

• Lesson 1: MFI Partner Diversity

• Lesson 2: It Takes Two (Types of Expertise)

• Lesson 3: Build on Comparative Strengths of Each Stakeholder

• Lesson 4: Invest in Product Development

• Lesson 5: Carefully Understand & Segment Clientele

WATERCREDIT LESSONS (2)

• Lesson 6: Invest in Learning Platforms

• Lesson 7: Don’t Forget Demand Generation

• Lesson 8: Water Operators Can Be Key Promoters (or Not)

• Lesson 9: It Takes Time

• Lesson 10: One Size Does Not Fit All

FUTURE PLANS & EXPANSION

WC FUTURE PLANS & EXPANSION

• Geographic Expansion

– Latin America

– Southeast Asia

– Need to Balance Scale, Demand, Sector Depth & Ability to Innovate (Diversified Approach)

• Market Assessments

• Expanded Learning Platforms

• WASH ICT Innovation for MFI Clientele