Water credit initiative in India_Richard Thornston (water.org)_ 2013)


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Water credits strategic subsidies, characteristics, milestones and models followed & challenges faced.

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  • 2004: First WaterCredit program launchedRLF scheme with Gramalaya, a WSH NGOGramalaya obtains microfinance training and develops successful water and sanitation loan products.Demonstrates that WaterCredit concept is viable in India.2007Support from Michael & Susan Dell FoundationPartnership with first MFI formedLoan made to BASIX for WaterCredit expansion in four geographiesDemonstrated that WaterCredit could be a successful model for MFIs in India. Loan repaid in full, WSH access expanded, BASIX decides to integrate WC within its standard product offerings across all branches.GUARDIAN formed – world’s first MFI dedicated to expanding water and sanitation acccess2008Water.org forms first partnership with PepsiCo FoundationExpands WaterCredit with additional microfinance institutions in IndiaCommercial capital leveraged by MFIs for the first time2011Water.org and PepsiCo expand partnership with exclusive focus on WaterCredit. Other partners (e.g. Caterpillar Foundation, Bank of America, Swiss Re) join Water.orgResults in WaterCredit expansion across many regions of India with MFIs2013 Milestones Achieved this Quarter$5 million invested by Water.org in partner organizations100,000 loan mark500,000 unique individuals served with water and/or sanitation
  • Map from October 2012 of Pepsi-funded MFI partners & locationsDoes NOT include other partnersTamil Nadu: Gramalaya, SCOPE, ODPKarnataka: MythriOdisha: AdhikarHyderabad: SIDURBihar: MHTWest Bengal: BandhanRajasthan: MHT
  • Results from postline evaluation of Pepsi I MFI WaterCredit programsFocus on water-related impacts. Others include disease incidence, economic gains, and satisfaction with WC activitiesMethodology – administered by partners and 3rd parties, random and intentional sampling, not consistent across partnersNumbers – 384 sites covered, 7,380 baseline and 7,266 postline surveys across MFI partners
  • Water credit initiative in India_Richard Thornston (water.org)_ 2013)

    1. 1. Richard E. Thorsten, Ph.DDirector of International ProgramsIndia WaterCredit Stakeholder Engagement ForumFebruary 19, 2013 - Delhi
    2. 2. WaterCredit in India: Milestones 2013 2011 2008 2007 2004
    3. 3. Sample WaterCredit MFI Model Diagram Water.org“smart subsidy” grant for technical assistance & capacity development costs “smart subsidy” grant for start-up, product & capacity development costs credit enhancements (guarantees) Banks & WSH NGOs MFIs portfolio growth capital Capital technical assistance Markets loan loans repayments technical assistance JLGs connection fees Utilities Households other WSH improvements toilets water &/or sewerage services RWH tanks drip irrigation
    4. 4. WaterCredit’s Strategic Subsidies Software costs of programs  Community mobilization, education, training  Hygiene education & sanitation demand generation Watsan loan portfolio  Market research  Loan product development  Pilot testing Investment capital  Seed capital for revolving loan funds  Credit guarantee for commercial and external financing Capacity development  Watsan training  Financial management training  GUARDIAN - start-up costs, M-Cril rating Areas NOT subsidized  Cost of improvements  Wholesale & retail loan conditions  Tariffs and O&M expenses
    5. 5. Water.org’s Roles Program Design Philanthropic Investment Financial and Program Monitoring Partner Capacity Building WSH Facilities and Water Quality Verification Evaluation Broader Sector Engagement
    6. 6. WaterCredit Loan & Borrowers’ CharacteristicsCHARACTERISTC VALUEAverage Loan Size $150Average Effective Interest Rate 16.7%Average Loan Term 15 monthsCumulative Repayment Rate 99%Water Loans as % of Portfolio to Date 38%Sanitation Loans as % of Portfolio to Date 54%Borrowers’ Average Monthly Household Income (INR) 3,415Percent of Borrowers Below Poverty Line 52%Percent of Loans Given to Female Borrowers 89%Percent of Loans Given to Those in Rural Areas 80%
    7. 7. Making Progress in IndiaINDICATOR Progress to Expected by April Date 2016WaterCredit Partners 18 23Water.org Partner Investment $4.9 million $9.65 millionExpected Financial Capital Leveraged $20.7 million $48.2 millionIndian States Impacted 13 15WaterCredit Loans Disbursed 98,600 325,000Water and/or Sanitation Beneficiaries 490,000 1,500,000
    8. 8. Overview of Challenges Water-Related Issues  Water Resource Management  Water Quality  Water Infrastructure Other Challenges  Microfinance Environment  Awareness of Sanitation Options  Scaling WaterCredit in New Markets
    9. 9. Evaluating Impact100% 90% 80% 70% 60% 50% 40% Baseline 30% Post-line 20% 10% 0% % Population % Population % Obtaining % Population % Population Using Using Enough Considering Washing Improved HH Improved Water to Water as Hands at Water Source Sanitation Meet Needs Potable Crucial Times
    10. 10. Future Evaluation Efforts Planning more systematic evaluation of WaterCredit work occurring between 2008-11. Common evaluation survey and protocol administered by current WaterCredit partners in 2011-12  Includes treatment and control groups  Over 11,000 baseline and 8,000 postline surveys  Includes demographic, socio-economic, water & sanitation, hygiene, WaterCredit, health, and other data Contract with 3rd party researcher to evaluate 2011-16 initiative.
    11. 11. THANK YOU!