Income-enabling, Not Consumptive: Association of Household Socioeconomic Conditions with Safe Water and Sanitation

Water.org’s program, WaterCredit, uses microfinance to empower the world’s poor to access water and sanitation. A major obstacle to scaling up this approach is the general assumption that loans for water and sanitation are too risky because they are consumptive rather than income-generating.

This publication challenges that argument by highlighting the financial gains people are able to derive to some extent from having water and/or sanitation infrastructure at home. Data that examine the economic implications of the reallocation of time formerly dedicated to water collection and defecation practices are provided from surveys and interviews conducted with WaterCredit borrowers in India. This paper has three goals: 

1. It seeks to build an evidence base for the real economic gains enabled by households having access to water and sanitation.
2. By demonstrating the clear link between income gains and water and sanitation access, it is hoped that the perception of micro-lending for water and sanitation as "consumptive" will be challenged in favor of "income-enabling". 
3. As a result of this data-based change of perspective surrounding micro-lending for water and sanitation access, ideally this paper will encourage government, the philanthropic and private sectors, and multi- and bilateral institutions to embrace this model and develop policies and programs that increase the availability and scale of market-based solutions to household-level water and sanitation access.