This report summarises the presentations and discussions, which took place during the second sanitation microfinance working group meeting in Dar Es Salaam on the 15th of May.

1. 1
SanFin Tanzania
Proceeding from the second working group meeting
15th
of May, Dar Es Salaam
May 2014

2. 2
1 Introduction
SanFin Tanzania is a working group focused on supporting microfinance for sanitation in Tanzania.
The working group first meeting was held on the 3rd
December 2013 with the support of a SHARE
(DFID)-funded action-research for developing microfinance for sanitation in Tanzania.
Following on from this first meeting, participants from eight microfinance institutions (MFIs) and
NGOs took part in a two-week training on developing microfinance products for sanitation provided
by MicroSave. Three of these organisations (Tujijenge, ECLOF and CCI) are currently developing
financial products for sanitation.
One main objective of the second SanFin working group meeting was to enable the three institutions
currently developing sanitation microfinance products to share their experiences with a wider
audience: what steps are they taking to develop sanitation products? Have they identified demand
from their customers for sanitation-focused financial products? What challenges are they anticipating
and what kind of support they would need?
Another objective was to inform SanFin members on the next phases of the SHARE action-research.
2 Attendance
The working group meeting was hosted at WaterAid’s offices in Dar Es Salaam and gathered
representatives from Mama Bahati Foundation, ECLOF-Tanzania, Tujijenge Tanzania, K-Finance,
YOSEFO, CCI, WAT-Human Settlement Trust, Habitat for Humanity, Tanzania Association for
Microfinance (TAMFI), VKS construction support services, Trémolet Consulting and MicroSave. A
full list of participants is available in Annex 2.
3 Proceedings
3.1 Introductory remarks
Following introductory remarks by Abel Eliezer Dugange (Director of SSTZ) on behalf of WaterAid
Tanzania country representative, Sophie Trémolet (Trémolet Consulting, Lead SHARE researcher)
gave a brief background on the SHARE initiative behind the initial formation of SanFin. Sophie
insisted that one legacy of the SHARE research would be the establishment of a working group
dedicated to microfinance for sanitation, beyond the period of the action-research due to end in
November 2014. Sophie invited local stakeholders, including WaterAid or TAMFI, to take the lead in
carrying out this activity and creating a community of thinking and practice around sanitation
microfinance. Such community could act as a focal point for external agencies interested in rolling-
out sanitation activities through microfinance.
3.2 A recap on the SHARE action-research – George Mugweru, MicroSave
George Mugweru from MicroSave gave the audience a brief recapitulation of the progress of the
action-research since December 2013. Through the action-research 14 participants from 4 MFIs and 4
NGOs received training on qualitative market research for sanitation, i.e. conducting focus group

3. 3
discussions (FDGs) to extract data on customers demand for sanitation-related products. Participants
were given skills to organise and lead the FDGs so as to extract appropriate data. During the training,
they were also familiarised with sanitation issues through presentations from sanitation specialists,
including from WaterAid, VKS and SAWA. This exposure to activities enabled participants to form
the FGDs questionnaires. Participants were also exposed to sanitation business activities through a
field visit to Kigamboni (in Temeke municipality in Dar Es Salaam) were they met the Director of
UMAWA, a community-based enterprise which has received the support from WaterAid to deliver
emptying services.
After the training, ECLOF-Tanzania, TujijengeTanzania and CCI expressed their interest in taking
part to the next phases of the action-research and receive further assistance from MicroSave to
develop their concepts. From February to May 2014, ECLOF-Tanzania and CCI carried out market
research activities. Tujijenge had already hosted market research activities during the January
training.
Following George’s intervention, three representatives from ECLOF-Tanzania, CCI and Tujijenge
gave presentations, which provided some background information on their institutions and the
outcome of the training they received.
3.3 ECLOF Tanzania, Dativa Mtui
Background
The Ecumenical Church Loan Fund Tanzania (ECLOF-T) was established as a department of the
Christian Council of Tanzania in 1961. Based in Arusha, ECLOF was re-launched as a NGO in 1994.
ECLOF portfolio grew from TZS 1.9 billion (USD 1,123,050) in 2010 to TZS 3 billion (USD
1,773,240) at the end of 2013. It currently employs 55 full-time employees. The institution’s annual
income grew from TZS 6.8 million in 2006 to TZS 1 billion (USD 591,000) in 2012. Its current
savings deposit amount to TZS 400 million.
ECLOF-T is currently serving the market through 6 products, the main ones being Jikwamue and
Jitegemee which consist of 65% of the portfolio.
Table 1 - ECLOF-T current range of products
Source: ECLOF-T

4. 4
Activities under SanFin Project
Two members of ECLOF-T received training with MicroSave in January 2014. Following the
training, ECLOF conducted market research in March 2014. A total of 8 Focus Group Discussions
(FGDs) were conducted in 3 days with 95 respondents. Through these FGDs, the following lending
product concepts for sanitation were identified:
 Toilet/Bathroom Construction/Improvement for households, businesses and institutions
 Integrated sludge collection pit and biogas production unit construction
 Working capital for sanitation businesses
Anticipated challenges
Although demand for the above products was identified, ECLOF expects that there will be challenges
for rolling out such products. These challenges are the following:
 ECLOF has limited funds to carry out WASH financing;
 Its credit officers lack of skills for assessing/appraisal of sanitation businesses;
 The institution lacks of experience in marketing/identifying sanitation type business opportunities;
 Customers have a poor perception of sanitation financing
 Loans for sanitation will multiply customers’ loans.
Lessons learnt so far
 There is high demand for the WASH activities/products;
 The customers appreciate the benefits of improved toilet and bathroom;
 By providing sanitation loans ECLOF Tanzania will improve the general well-being of its
customers
Technical Support Requirements
For ECLOF-T, overcoming the above challenges would require:
 Funds for supporting the WASH product;
 Training on sanitation to management team to generate buy-in;
 Training on sanitation businesses appraisal and marketing of the products;
 Sanitation awareness to customers.
SanFin activities likely to be carried out
ECLOF-T is likely to train its customers concerning the WASH products (awareness raising) to
increase uptake. ECLOF-T is likely to develop products like biogas loans because there is high
demand and they seem sustainable as they reduce other costs for households.
3.4 CCI, Teressia Ntanga
Background
The Centre for Community Initiative (CCI) is an NGO that was established in 2004. CCI mobilises
urban communities to form savings and credits schemes. Saving schemes contribute to Tanzania
Urban Poor Fund (TUPF). The TUPF operates at regional level through the Jenga Fund, a revolving
fund established for purpose of financing different livelihood projects including the purchases of land,
home improvements, water and sanitation projects and other development projects initiated by
Tanzania Federation of the Urban Poor.
Currently, 350 communities or groups have been mobilised in different regions: Dar Es Salaam,
Dodoma, Arusha, Morogoro, Mwanza, Mara, Zanzibar and Tanga. The total amount of savings within
the groups amounts to TZS 165,600,400 (USD 97,557). The Jenga fund has disbursed a total of 1,189
loans for housing construction, water connections, borehole and toilets construction. Since 2009, TZS
450,690,900 (USD 274,811) of loans has been disbursed. The Jenga Fund has an outstanding loan
balance of TZS 222,707,250 (USD 135,797). The current repayment rate is 30%.

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Outside the SanFin project, CCI has been financing WASH activities in urban areas. In regards o
sanitation, a total of 980 toilets have been constructed, with 780 of these financed on loans. CCI also
facilitated the financing of one public toilet through a loan to one of the community group. About
TZS 190 Million (USD 115,853) worth of loans has been disbursed for toilet construction.
Activities under SanFin Project
As a result of the training provided by MicroSave in January, CCI conducted a market research in
order to:
 Identify factors limiting the uptake of the loan;
 Establish the reasons for low repayment rate;
 Explore additional sanitation loan products that Jenga Fund could offer to its customers; and
 Evaluate the current delivery mechanism with a view to make more efficient and responsive.
A total of 16 FGDs were conducted in 4 days with 166 respondents. Research was conducted in
Karakata, Vingunguti, Chamazi, Kekomachungwa, Kekomwanga, Tandale and Msasani Bonde la
Mpunga.
Following the FGDs, CCI intends to work with MicroSave on revising the features of their current
toilet construction loan (including targeted customers and delivery mechanism). CCI will also define
loans for purchasing Gulper equipment and construction of DEWAT systems and for housing
improvement.
Anticipated challenges
One main challenge anticipated by CCI is that most customers perceive the loans given under the
Jenga Fund as a grant, which induces poor repayment rates. This situation means that there is less and
less fund available in the revolving fund for loans. Overall, the current disbursement and repayment
mechanism are lengthy processes as the Jenga fund relies on the federation committees to remit their
payments (savings and repayments).
In addition, low or irregular income in informal settlements threatens the viability of lending schemes.
One way to enhance income is to provide livelihood loans as well.
Lessons learnt so far
One important lesson that has emerged is the potential need to reform the Jenga Fund into a full-
fledged MFI, particularly to reach non-federation members and adopt mechanism to ensure
repayments. Another key lesson is to match financial services with customer needs, identified through
market research. This activity has confirmed that there is an unmet need for sanitation financing in
informal settlements. However, to increase sources of revenues, it might be suitable to introduce other
types of loans that are “income generating” – livelihood loans.
Technical Support Requirements
CCI requires technical support to revise their current loan process within Jenga Fund. The NGO needs
capacity building on loan managements through exchange visits and training of staff. In the event
where it would deem necessary to transform the Jenga fund into an MFI, CCI would need support in
this process.
SanFin activities likely to be carried out
CCI will engage in a process to revise their current loan products and process to make the Jenga Fund
more efficient and sustainable. They will carry out activities to increase uptake of the loans and
chances of repayments – activities aiming at changing people’s perception of the Jenga fund. CCI will
also look into including livelihood loans (business loans) to improve income levels in the informal
settlement.

6. 6
Box 1 – Discussion following CCI’s presentation:
Following Teressia’s presentation, the discussion was animated by two subjects: the Jenga Fund’s poor
repayment rates and CCI’s project to transform it into an MFI.
Japhet from SEDIT said that as toilets are non-income generating, CCI cannot expect to have the loans repaid
and questioned CCI’s procedure for issuing the loans. Harry from TAMFI added that if loans were targeting the
destitute, it is normal that the repayment rate is low.
Judith Sando from WAT-Human Settlements reminded the audience that in Tanzania there was only two
institutions officially registered as MFIs, i.e. which are regulated by the Bank of Tanzania. All other institutions
are considered as NGOs. Judith praised CCI for realizing the need to make improvement to their organization.
However, she advised CCI to carefully weigh whether they should leave behind the federation system. She
invited CCI to visit other countries (where federation systems work well). “Don’t abandon it!” said Judith. She
added: “NGOs are community-driven. Their perspective started changing a few years back as sources of income
started to fade. CCI needs to look for a middle ground: will you continue to be a NGO community-driven and
adopt an enterprise system? What would that mean as an institution? Be careful that what you transform into
does not take you away from the community. If CCI become MFI, you might lose this.”
George Mugweru from MicroSave clarified that it was not CCI that is transforming but the Jenga Fund itself.
Kenneth Sinare shared Judith’s concerns and advised CCI “to guard their mission”. He added: “Rather than
deviating giving livelihood loans, find a partner, and concentrate on what you do best – building the community
– In that way you complement each other.”
3.5 Tujijenge, Debora Kiwale
Background
Tujijenge Tanzania Limited is a microfinance company that started operating in April 2006. It
currently operates through five branches located in Dar es Salaam, the Coastal region, Mwanza and
Mara (in both urban and rural areas).
Tujijenge’s social mission is “to improve quality of lives of families in Tanzania through the
provision of microfinance”.
Tujijenge’s main focus is the provision of loans to its customers, via both via Group and Individual
lending methodologies. Other services include pre-loan training to group clients, savings services and
mobile phone banking (for loan disbursement and repayment). Currently, Tujijenge has over 8,000
active borrowers, with an outstanding loan balance is of TZS 4.9 billion (USD 3,062,500)
Activities under SanFin Project
In January 2014, two senior staff of Tujijenge attended the training on sanitation microfinance. With
support MicroSave, Tujijenge developed a draft of a sanitation microfinance product.
Having met with the director of UMAWA (a sanitation –focused community-based enterprise),
Tujijenge disbursed a loan of TZS 5 million to UMAWA at 36% IR. This was Tujijenge’s first step
towards funding sanitation-related activities that fit into their current lending activities.
Anticipated challenges
The main challenges for developing further sanitation related financial services are:
 Tujijenge’s staff lack of capacity for appraising sanitation-related businesses
 Start-up loans are deemed too risky - therefore Tujijenge needs funding to share the associated
risks of lending to sanitation start-ups
 For many people, sanitation is still not at the top of their priority chart
Lessons learnt so far
 There is still a big market for sanitation microfinance;

7. 7
 Staff selling the sanitation products must be groomed to be able to deal with sanitation-related
businesses as they are not conventional microfinance products;
 The products roll out might need to go along with education and awareness campaigns.
Technical Support Requirements
To develop the identified products, Tujijenge would require:
 Staff training on sanitation microfinance
 Training of credit officers on individual lending (which is new business for Tujijenge) and
marketing skills
 Lending funds to mitigate on start- up lending risks
 Networking with other stakeholders to unlock the product potential
 Conducting a mapping out of areas to identify those where sanitation elated activities would fit
into their lending activities
SanFin activities likely to be carried out
Through the mapping out activity, WASH enterprises could be identified and Tujijenge will be able
scale-up their sanitation business activities. Tujijenge hopes it can get a funding partner to do better
with the sanitation product in the future. Such funding will support financing sanitation businesses
start-ups.
Box 2 – Discussion following Tujijenge’s presentation
The discussion focused on Tujijenge’s first loan to a sanitation business and the need to train loan officers so
that they’re able to recognize sanitation businesses. Tujijenge’s loan officer had to go three times to meet
UMAWA before issuing the loan. According to Tujijenge, there was little evidence of cash flow (there were
cheques from the municipality, but no other means to assess the cash flow).
Tujijenge’s findings are surprising since UMAWA has been receiving support from WaterAid and BDS
partners, precisely to enhance their bankability. As a result of these activities, UMAWA is probably one of the
best trained gulper entrepreneurs that is currently operating in Dar es Salaam. However, this puts in evidence the
difficulties of building the capacities and business management skills of this type of businesses, so that they can
interact with financial institutions.
Goufrane Mansour from Trémolet Consulting wondered whether this absence (or poor) evidence of cashflow
was typical or not of businesses that Tujijenge usually deals with and if Tujijenge helps businesses (through
training) to package themselves in a way that is attractive for a financial institution.
According to George Muruka from MicroSave, the loan issuance was also the fruit of innovative thinking from
the CEO. Tujijenge normally provides individual loans to those who are members of a loan group and have
proved ability to repay (“Most of individual borrowers graduate from the group”) – this was exceptional for
them and demonstrates the high level of interest at the level of Tujijenge’s management for this new market.
George Mugweru recognized the need to provide training to loan officers on sanitation: “There is a need to build
capacity of financial institutions: how do you see an opportunity in a sanitation finance business – which is a
very different business from what they know. If I were an MFI officer and meet this man carrying sludge, I may
not see him as a businessman: need for us to build capacity of FI staff to be able to identify this opportunity.”
3.6 Other SanFin members
The working group also enabled taking stock of the other present institutions’ activities, particularly
focusing on those that had received the training provided in January.
Yosefo are not carrying out sanitation activities yet – but this is partly because they are busy
transforming the organisation into a microfinance bank.

8. 8
K-Finance finds that there is a business potential in sanitation but there are other issues to overcome.
(1) The problem of funds: sanitation is a new business (taking funds from the banks). It is risky to test
such product with funds from the bank. They would need soft loans to carry out such activities. (2)
Demand for sanitation is another challenge. (3) Training of loan officers and give them capacity to
assess sanitation businesses.
SEDIT has registered as an MFI on the side to complement its current activities. SEDIT currently has
a sanitation and hygiene project in Dodoma – linked with sanitation marketing. They are working
with Vicoba groups but are expecting to top up the capital of the groups through microfinance
institutions and capacitate members of the group in entrepreneurship.
SEDIT has just started this sanitation activity [under a WSSC/Plan funded programme]. SEDIT
expects that four month will be needed to train people so that they start saving for sanitation and
VICOBA groups start lending for sanitation related-activities.
Each Vicoba group has 30 people. A typical VICOBA group collects TZS 1,500 per person per week.
After 4 months, people will be able to take loans through the Sanitation Fund. SEDIT estimates that
each group will have contributed 180,000 TZS (USD 106.1) towards the Sanitation Fund. [1500 * 30
= 45,000 * 4 months = 180,000 TZS] SEDIT is looking to influence 261 VICOBA groups to
contribute towards the Sanitation fund. The sanitation fund will provide loans that will help them buy
small sanitation components. There are plans to distribution centres, which will buy and in bulk and
enable groups buy at reduced cost.
SEDIT plans that households will contribute to the toilet construction by providing some materials..
Artisans that will be hired will come from the Vicoba groups.
MAMADO implemented a microfinance project 4 years ago but they were not successful. They are
analysing the challenges that made the project not successful. The report could be shared at the next
working group meeting.
Habitat for Humanity started providing loans in 2009. They do not differentiate toilet loans from
other home improvement loans. They charge 2% flat rate. If the loan is taken and not used for home
improvement, H4H issues penalties. H4H is looking for regional expansion and for funds from other
partners.
3.7 Wrap-up: the main challenges to developing microfinance products for sanitation
Wrapping up the discussions, Sophie Trémolet identified the following key challenges or areas where
CCI, ECLOF and Tujijenge needed support:
 Identifying sources of fund to generate sanitation loans:
o Possibility of saving schemes?
o Establish links with providers of grants or soft loans
o Issue of interest rate: lower interest rates or lower the capital?
 Training of credit officers: it is important to develop and roll-out a programme for training credit
officers so as to sensitise them to the sanitation market and provide them the basis for evaluating
applications for financial support coming from the sanitation sector. This needs to be explored
further particularly to identify who can lead on this (e.g. whether there is a role for TAMFI (which
provides umbrella training) or for Water NGOs (such as WaterAid)

9. 9
 Training of CEOs and senior management of microfinance companies: similarly there is a need
to raise the awareness of CEOs and senior management of microfinance providers. Similar
questions arise as for the training of credit officers, although the answers might be different.
 Increasing viability of sanitation entrepreneurs
o Better communication about what is needed in terms of demonstrating financial viability
for sanitation businesses
o Who should support these entrepreneurs? Will they repay?
 Collaboration between organisations
o Distribute roles: who is the best placed to issue loans?
o Who can provide training and support?
o How can they best coordinate?
o How to involve local government? Who would take the lead in advocating stronger
enforcement? MFIs or NGOs?
o Role of the working group: who could host? What could be future activities?
According to James Mturi, WaterAid can take the lead to organise training to loan officers. Another
potential partner for this would be SNV (Dutch NGO) which has recently been awarded a Euros 28
millions service contract for the Sustainable Sanitation & Hygiene for All (SSH4A) Results
Programme.
3.8 Next phases
Finally, George Mugweru presented the estimated timeline for the next steps:
 19th
-23rd
May: finalizing concepts
 26th
-30th
May: concept testing
 9th
-12th
June or16th
-18th
June: pilot testing workshop
 12th
-27th
June: pilot planning and financial projection support
 1st
July: Pilot Launch
 October: pilot testing review
 Late November: final Working Group meeting under SHARE Research.

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Annex 1 – Agenda
9:00-9:15 Welcome and introductions Abel Eliezer Dugage,
Director of SSTZ,
WaterAid
9:15-9:45 Update on the action-research:
overview of the training and steps
undertaken since
Microsave
9:45-10:30 Market research and ongoing product
development: Eclof Tanzania
ECLOF
10:30-10:45 Coffee break
10:45-11:30 Market research and ongoing product
development: CCI
CCI
11:30-12:15 Market research and ongoing product
development: Tujijenge
Tujijenge
12:15-13:00 Wrap-up and next steps Trémolet Consulting
13:00 Lunch (provided by WaterAid)

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Annex 2 – Attendance
Institution Name Email
Mama Bahati Foundation Japhet Makau japhetmakau@ymail.com
ECLOF Davita Mtui dativa.bahati@gmail.com
Tujijenge Tanzania Debora Kiwale deborak@tujijenge.org
K - Finance Arthur Kaane akaane@yahoo.com; dnminzi@gmail.com
K - Finance Oscar P.Bwanakunu oscarpbwana@yahoo.com
YOSEFO Ndeu Naboja nmaboja@yahoo.co.uk
Tujijenge Tanzania Debora Kiwale deborak@tujijenge.org
CCI Teressia Ntanga teddyntanga@yahoo.com
Mama Bahati Foundation Japhet M.Jackson japhet.jackson@seditvicoba.or.tz
WAT-HST Judith Sando jdthsando@gmail.com
Habitat for Humanity Anna Kway akway@hfhtanzania.org
Habitat for Humanity Tonny Charles ctonny69@yahoo.com
TAMFI Harry Ndambala hjnndambala@gmail.com
VKS construction support
services Kenneth Sinare kensinare@gmail.com
WaterAid Abel Eliezer Dugange AbelDugange@wateraid.com
WaterAid James Mturi JamesMturi@wateraid.org
WaterAid Sally Faulkner SallyFaulkner@wateraid.org
Trémolet Consulting Sophie Trémolet sophie@tremolet.com
Trémolet Consulting Goufrane Mansour goufrane@tremolet.com
MicroSave George Muruka muruka@microsave.net
MicroSave George Mugweru mugweru@microsave.net