Loan for toilets : Catalysing WASH: from Possible to Profitable

BY: Edmund Smith-Asante
WASH sector stakeholders at the conference.

Naturally, the Whatsapp message I received got me curious and interested. What! There is now a loan for water, sanitation and hygiene (WASH) facilities in Ghana?

“Kudos EKN, SNV and Fidelity Bank. Now I can walk to any Fidelity Bank and take a loan to finance my septic tank, Veronica bucket, toilet, bath, litterbin, borehole etc. In fact any WASH at 10 per cent per annum,” the message stated.

The message came from the 26th edition of the longest running national conference on WASH in Ghana organised annually by the Coalition of NGOs in Water and Sanitation (CONIWAS) and dubbed the ‘Mole Conference Series’ because it started at Mole, 170 km west of Tamale in the West Gonja District of the Northern Region.

And yes, the message I received as a member of a Whatsapp group was true, my confirmation came later.

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The P2P Project

Apparently, a presentation was made at the two-day Mole Conference held from October 22 – 23 on the theme, “Financing WASH within the SDGs: Options and Strategies", in Bolgatanga, on a new project named, “Catalysing WASH from Possible to Profitable” (P2P). It is an innovative access to finance project for water, sanitation and hygiene (WASH) under the Ghana Netherlands WASH Programme (GNWP).

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The aim of the project is to scale up access to finance and technical assistance for micro, small and medium enterprises (MSMEs) and households in Ghana, to eventually increase access to WASH products and services by urban and rural households in Ghana.

According to the implementers, the Netherlands Development Organisation (SNV), the project was informed by the inability of MSMEs in Ghana to access loans mostly from traditional sources, which hindered their ability to sustain investments and services.

Other motivating factors are the lack of good governance structures and in adequate technical knowledge, high interest rates and collateral requirements and the de-linked demand and supply chain of sanitation, where, although NGOs create demand, the supply components have been lacking.

“Households are expected to be the main beneficiaries of services provided by MSMEs in the sector but are also financially constrained due to the significant upfront payments they are required to make,” the SNV stated.

The organisation maintains that P2P is stimulating local entrepreneurship in the WASH sector and allows households or groups of households to obtain water and sanitation facilities, such as latrines, toilets and connections to potable water.

To advance the cause of the project, appropriate lending products are to be developed for the WASH sector, including loan products that will look at income, size of business and gender.

Access to finance is facilitated through the establishment of a €4,000,000 revolving fund, which is managed by the Fidelity Bank. The fund is expected to be disbursed to 2602 households and 800 MSMEs over a five-year period (2015 - 2019). In addition, over 500 MSMEs within the sector will benefit from pre and post-loan business development support to facilitate loan acquisition and repayment.

Nonetheless, unlike the traditional way of funding where NGOs and agencies are provided with upfront funding, SNV now uses an approach that ensures that agreed deliverables are delivered by these bodies and independently verified before payments are done.

P2P, a hybrid of the regular socially inclined project and regular commercial facility with emphasis on commercial, is expected to foster strong collaboration with the Government of Ghana and GNWP partners under the communication channels of GNWP.

It is also hoped that it would serve as a model for a finance and private sector-driven approach to sanitation financing in Ghana.

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