Financing Sanitation for the Poor: Household-level Financing to Address the Sanitation Gap in India

This learning note includes a portfolio analysis conducted in 2014 of one of the largest water and sanitation (WASH) loan portfolio data sets available, as well as an independent impact assessment of Water.org’s WaterCredit program, offering insights into the viability of WASH lending. The portfolio analysis included a sample of more than 245,000 loans in India. About half of these loans were for sanitation—primarily for household toilets. The WaterCredit portfolio analysis, along with WSP analysis, help show why development partners, governments, and financial institutions should work together to scale water and sanitation loans as part of the solution to the sanitation crisis in India.

• USD 80 million in financial lending has resulted in more than 315,000 household sanitation loans reaching more than 1.4 million people.
• Sanitation loans have risk profiles comparable to other loans. Approximately 80 percent of WaterCredit borrowers earn less than USD 2.00 per day, but have repayment rates of more than 99 percent.
• Household level sanitation lending stretches the impact of each philanthropic dollar invested by 10 times.
• The Reserve Bank of India recently added sanitation infrastructure to the priority sector lending, which could release USD 40-50 billion into the sector.
• Loan recipients enjoy social and economic benefits: 39 percent of borrowers reported increased safety and nearly 25 percent of women were able to increase incomes due to greater productivity.