Microfinance as a Potential Catalyst for Improved Sanitation

Sanitation microfinance has the potential to sustainably improve sanitation access in developing countries. Due to resource limitations, subsidy-based sanitation programs are typically unable to provide desirable sanitation products. This, among other factors, has frequently resulted in abandoned infrastructure and ineffective investment. Microfinance provides the possibility for middle- and lower-income households to invest in a desirable sanitation product that meets their long-term needs and preferences through market-based structures.

Water For People has been piloting various sanitation microfinance models with diverse partners in seven countries (Bolivia, Guatemala, India, Malawi, Peru, Rwanda and Uganda). Based on these experiences, this study investigates how best to design and implement sanitation microfinance programs and the merits and pitfalls of microfinance itself. Additionally, the study highlights common findings from Water For People’s experience with sanitation microfinance in seven countries.

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