Bringing Microfinance to the Water and Sanitation Sector

In 2004, the Michael and Susan Dell Foundation awarded more than $1 million to finance WaterPartners International ( in its efforts to provide safe water and sanitation to the poor in developing countries. WaterPartners International launched a pilot WaterCredit Initiative which incorporated microfinance approach into water and sanitation projects. It is expected that participation in the project will also empower women and increase their involvement in community based projects. Currently WaterCredit is offered in India, Bangladesh, Uganda and Kenya and the average loan size is $120. The project targets the poorest populations because they tend to pay the highest price for vended water and lack access to safe drinking water. WaterCredit provides loans to finance household water and sewerage connections, toilets, sinks tube wells and water harvesting equipment.

Project objectives

  • Enable households and communities to gain access to credit to access water and sanitation
  • Provide sanitation and hygiene education to over 25,000 urban slum dwellers


  • The project’s success attracted the interest of commercial banks and an over $2 million loan commitment was secured from an Indian bank to finance water and sanitation projects
  • Microcredit loans have nearly 100% repayment rate
  • Hundreds of presentations on hygiene education took place
  • Over 4,800 household water and sanitation improvements
  • Installation of 150 child-friendly toilets used exclusively by children. These toilets are constructed adjacent to the community toilets and the caretaker of the community toilet teaches children the importance of hand-washing


  • Countering the perception of water as free gift or right that must be subsidized
  • Community-based models have not fared as well as self-help group models
  • Providing semi-urban areas with clean water in a reliable and sustainable way requires the establishment of complex infrastructure which typically is not financed by WaterCredit
  • Potential repayment challenges can arise if the time saved by the new water access is not converted into an income generating activity

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