WaterCredit: Revolutionizing the Way Water is Supplied to the World.

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WaterCredit: Revolutionizing the Way Water is Supplied to the World.

United States
Project Summary
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WaterCredit unites micro-finance with water supply, empowering those in need of safe water and sanitation to access credit to finance their solutions.

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Positioning of your initiative on the mosaic diagram:
Which of these barriers is the primary focus of your work?

Lack of access to equity/credit in the sector

Which of the principles is the primary focus of your work?

Financing for the new consumer

If you believe some other barrier or principle should be included in the mosaic, please describe it and how it would affect the positioning of your initiative in the mosaic

This field has not been completed

What is your signature innovation, your new idea, in one sentence?

WaterCredit unites micro-finance with water supply, empowering those in need of safe water and sanitation to access credit to finance their solutions.

Describe your innovation. What makes your idea unique and different than others doing work in the field?

The WaterCredit Initiative represents the creation of a new space at the intersection of water and sanitation and micro-finance. Current financing models that dominate the water and sanitation sector are not scalable because they rely on philanthropy and subsidies, rather than working within the slipstream of market forces. WaterPartners’ extensive experience around the globe has led to the insight that sustainable, demand-driven business models are a meaningful complement to traditional grant-driven approaches. These WaterCredit models not only cost less (because they leverage end-user payments), but they also leverage market forces, which enable the models to naturally scale through local resources. Users with a financial stake in their water supply solutions also have a greater incentive to ensure proper operations and maintenance. Generating investments from within local economies will be a key element in allowing developing countries to reverse the dependence on external aid that has shown only mixed success in meeting long-term water and sanitation needs.

Delivery Model: How do you implement your innovation and apply it to the challenge/problem you are addressing?

WaterPartners works through its network of local partner organizations to develop and implement credit-based water and sanitation products tailored to the local circumstances. The partners provide loans through a variety of channels including individuals, joint-lending groups, women’s self-help groups, and community-based organizations. Borrowers utilize the funds to construct safe water and sanitation facilities. Loan repayments are then re-lent to new borrowers for additional facilities. This allows more people to be served with the same dollar.

How do you plan to expand your innovation?

Since 2003, WaterPartners has gained extensive experience working with its local partner network to implement WaterCredit programs in India, Bangladesh, and Kenya. Based on these experiences, WaterPartners has designed the next phase of WaterCredit to significantly scale up this initiative. It starts by supporting current partner MFIs and NGOs and marketing WaterCredit to additional MFIs that are willing to innovate and enter the water lending space. This support will include “smart subsidies” that take the form of grants to conduct market research, secure technical assistance, and conduct performance assessments of their programs. Additionally, WaterCredit will help match its MFI partners to bridge capital and credit enhancements so they can secure commercial credit to fund their water and sanitation loan portfolios. Grant support will also be provided to engage NGOs to provide community mobilization, training, and social marketing to spur additional demand for loans for water and sanitation services. Thus, WaterCredit will achieve scale by leveraging commercial capital and market-based approaches, while continuing to ensure social impact.

Do you have any existing partnerships, and if so, how do you create them?

WaterPartners works through its extensive network of local NGOs and MFIs to implement water and sanitation projects. WaterPartners carefully evaluates and certifies these partner organizations using a process developed and refined over the past 18 years. The evaluation process ensures partners have the capacity and experience to execute high quality projects that are demand-driven and sustainable. Because of the local partner model, WaterPartners can ramp up capacity quickly through existing partners and by certifying new partners.

WaterPartners is also building partner relationships with apex MFI organizations such as Unitus and Opportunity International. These networking organizations will allow us to efficiently reach hundreds of in-country MFI candidates with the WaterCredit opportunity.

WaterPartners is committed to rigorous monitoring and evaluation. Independent research partners such as Stanford University, Emory University, and the Aquaya Institute have all evaluated our programs. These evaluations allow us to further strengthen our work and create greater impact.

Provide one sentence describing your impact/intended impact.

Empower people to seek their own water and sanitation solutions through access to reliable and affordable credit.

What are the main barriers to creating or achieving your impact?

Despite the latent demand for credit to finance water and sanitation solutions and the proof that the poor are capable to repay loans (thanks to micro-credit efforts around the world), scalable finance models for meeting demand have not emerged. MFIs are the most efficient channel for delivering credit to the poor; however, because water loans are not seen as directly income-generating and because of the high failure rates of water projects, MFI’s are reluctant to loan in this space. This is the greatest barrier to achieving the impact we desire. We must help MFIs understand that water and sanitation are a bankable credit product.

How many people have you served or plan to serve?

To date, WaterPartners has implemented multiple WaterCredit programs for water, sanitation, and hygiene education benefiting approximately 65,000 people. Based on the churn from repaid loans that have already happened, it is expected that an additional 61,000 people will be reached by 2011. And it doesn’t end there. After those 61,000 people repay their loans, the funds will be free to serve even more people. Thus, the number of people served will continue to grow.

With new funding for WaterCredit programs currently in place for 2008, WaterPartners plans to reach an additional 40,000 people this year. Building on these successes, WaterPartners now seeks to take the WaterCredit Initiative to a larger scale and add new partners to take part in WaterCredit.


As of January 2007, over half a million dollars were disbursed through WaterCredit programs that benefited over 65,000 people directly. The loans have provided nearly 43,000 people with clean water and 22,000 people with safe sanitation facilities. WaterPartners’ partner organizations have collected over $220,000 in loan repayments that will be used to reach the next generation of beneficiaries.


Because WaterCredit has spurred partners to seek financing from sources besides WaterPartners, this is difficult to quantify. The following case studies provide an estimate of indirect beneficiaries:

• Stimulate additional lending activities - Working through self-help groups, one India partner spurred demand that overwhelmed its working capital. It facilitated $128,000 in loans directly from commercial banks to the self-help groups, reaching more than 6,000 people with services. This accomplishment eliminated a significant barrier that had prevented poor women from accessing capital directly.
• Leverage the loan funds for additional capital - One of our India partners collected $54,000 in loan payments. They plan to use these payments as a loan guarantee for $375,000 from commercial banks. Additionally, the partner received confirmation from a development bank that will provide a loan for $1.5 million. The projected number of people served is 41,000.
• New MFI - WaterCredit spurred the creation of a new MFI in India that has established a water and sanitation loan portfolio.

Please list any other measures of the impact of your innovation?

WaterCredit empowers people to immediately pursue water and sanitation solutions rather than living in the hope that solutions will be financed by external largesse. Typical impacts include: child-mortality rates drop; women and children spend less time collecting water and have more time for school, participating in community life, and earning wages; family health is improved; women borrowers are empowered in their homes and communities.

Is there a policy intervention element to your innovation, if so please describe?

In order for a WaterCredit project to work, a supportive policy framework must be possible within the local environment. In Kenya, this meant supporting the creation of micro-utilities as promoted under the national water reform with access to WaterCredit loans. It also meant coordinating with members of parliament to leverage matching funds for projects serving their constituents. Programs work with community members and local government offices to ensure communities have legal rights to the projects and appropriate legal status when necessary. This involves educating community members of their legal rights and teaching them how to contact their local officials regarding water and sanitation improvements. Additionally, the local organizations help the borrowers identify and obtain government subsidies for water and sanitation facilities.

Exactly who are the beneficiaries of your innovation?

WaterCredit has benefited over 65,000 people in Bangladesh, India, and Kenya to date. WaterPartners envisions WaterCredit as a financing tool that can be used by hundreds of millions of people in the developing world. As seen in micro-finance best practices, women are at the forefront of this innovation as the primary borrowers. WaterPartners recognizes that WaterCredit will not be a viable option for everyone in need of safe water and sanitation; therefore, this initiative targets those with sufficient resources to take on micro-loans.

How is your initiative financed (or how do you expect your initiative will be financed)?

The ultimate measure of success for WaterCredit is its ability to engage global capital markets to respond with funding for water supply and sanitation projects. However, this type of financing will only be feasible after philanthropic-driven “smart subsidies” lead the way. Currently, WaterPartners’ programs are financed through grants from individuals, governments, and foundations that support the development of ground-breaking models for applying credit to the water and sanitation sector.

WaterPartners then provides its MFI and NGO partners with smart subsidies to implement WaterCredit programs. These smart subsidies fund market research, build the expertise needed to lend in the water and sanitation space, and position partners to attract commercial credit. This approach has already led to one partner securing commercial financing in India.

Provide information on your finances and organization:

• Current annual budget for 2008 is $4,000,000
• Annual budgets for past two years: 2007 - $3,500,000; 2006 - $2,000,000
• Annual revenue generated 2007 -- $3,200,000; 2006 -- $2,100,000
• Current sources of revenue are contributions: Foundations 80%; Individuals 17%; Corporations 2%; Other 1%
• Only other source of income is interest and investment income on cash balances; no earned income from other business activities
• Because we rely on a network of MFI and NGO partners, we do not directly execute projects, making it challenging to derive earned income.

What is the potential demand for your innovation?

Hundreds of millions of people could finance their own water and sanitation solutions. But solutions are capital-intensive and people must be allowed to pay on an installment basis. WaterCredit is the unique initiative that makes this possible by extending loans to those in need of safe water.

What are the main barriers to financial sustainability?

Almost every business incurs losses during start-up. This means the main barriers to financial sustainability are the initial barriers to market entry. By providing “smart subsidies” to fund the start-up of a commercially viable credit market for water and sanitation loan products, WaterCredit removes these barriers and catalyzes a new financially sustainable market.

The Story
What is the origin of this innovation? Tell us your story.

WaterPartners has always been an innovator, conceiving new ways to tackle the global water crisis that have greater impact and are more efficient than traditional approaches. It is in this spirit that we launched WaterCredit. WaterCredit was a natural next step for WaterPartners, an organization with over 18 years experience in the water and sanitation field. This initiative has allowed WaterPartners to use its expertise to bridge best practices from the water and sanitation, and micro-finance sectors to help leverage scarce resources. When you consider that more than five million people die every year from water-related disease, the sense of urgency grows.

Since 2003, WaterPartners has piloted a number of WaterCredit projects. To date, WaterPartners has delivered strategic capital to conduct market research and build the capacity of its network of local partner organizations for pilot projects in India, Kenya, and Bangladesh and has overseen $500,000 in loans, serving over 65,000 people. Through these projects, WaterPartners has tested a number of different models in different environments and has begun to develop an important body of knowledge about how to best implement credit-based work for water and sanitation.

WaterCredit has captured the imagination of many people and organizations. Through its work to date, WaterPartners has developed a unique blend of insight, expertise, and entrepreneurial spirit needed to scale this initiative and bring MFIs and other key organizations into this space. While many unknowns lie ahead, WaterPartners is committed to expanding WaterCredit models and discovering the strengths and weaknesses of each.

Please provide a personal bio. Note this may be used in Changemakers marketing material

Gary White is co-founder and executive director of WaterPartners, an NGO that helps people in the developing world gain access to safe water and sanitation. White developed the WaterCredit concept as a key innovation for WaterPartners. White holds an M.S. in Environmental Engineering, emphasizing water supply and sanitation in developing countries, from UNC-Chapel Hill, and an M.S. and a B.S. in Civil Engineering from the University of Missouri-Rolla. White is a founding board member of the Millennium Water Alliance and Water Advocates.