MICROFINANCE PAPER WRAP-UP: “A Brief Introduction to WASH for Impact Investors;” by Joana Afonso, Sachin Kumar, Alvaro Ma; Published by e-MFP, Aqua for All

This report on funding water, sanitation and hygiene (WASH) cites the UN’s Sustainable Development Goal (SDG) 6 – Clean Water and Sanitation – as well as data indicating 3.6 billion people worldwide have limited access to sanitation services and 2.3 billion people lack basic handwashing infrastructure at home. Meanwhile, funding in this area is dominated by “public funding, subsidies or charities” and remains insufficient. An estimated annual investment of USD 112 billion is needed to provide universal access to WASH. The middle-income countries with the most valuable potential WASH investment opportunities are China at an aggregate of USD 26 billion and India at USD 19 billion.

The reasons for low levels of private investment in WASH include the following “myths”: (1) the public sector is the rightful funder of WASH; (2) WASH services must be provided at no cost to users; and (3) sanitation problems are “all about toilets.” In reality, sanitation needs regularly extend beyond in-home fixtures to the transportation (by pipeline or truck), treatment and disposal of waste. Meanwhile, there are encouraging factors in WASH investment, such as: (1) the involvement of microlenders in WASH lending; (2) the low levels of risk documented in WASH lending; and (3) increasing activity by small and medium-sized enterprises in the WASH ecosystem.

WASH investment can be supported through means including those offered by the Dutch NGO Aqua for All, which provides technical assistance, de-risking instruments and results-based finance for WASH projects.

This is a summary of a paper by Joana Afonso, Sachin Kumar and Alvaro Ma; published by
e-MFP (European Microfinance Platform) and Aqua for All; September 2022; 13 pages; available at
https://www.e-mfp.eu/sites/default/files/resources/2022/09/A-brief-introduction-to-WASH-%20for-impact-investors.pdf.

By Renata Samadova, Research Associate

Additional Resources

European Microfinance Platform homepage
https://www.e-mfp.eu

Aqua for All homepage
https://aquaforall.org

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https://www.microcapital.org/?s=wrap

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