equity bank presentation on microfinance for wash - east africa workshop on microfinance for...
DESCRIPTION
Stephen Macharia from Equity Bank (one of Kenya's biggest financial institution) gives an overview of the bank's partnership with Water.org for the provision of loans for water and sanitationTRANSCRIPT
Equity Bank LimitedPresentation
Stephen MachariaGM- Market Research & Product
Development
16.05.2014
EQUITY BANK
THE PURPOSE
We exist to transform the lives and livelihoods of our people socially and economically by availing them modern, inclusive financial services that maximize their opportunities.
2
MISSION STATEMENT
We offer inclusive, customer focused financial services that socially and economically empower our clients and other stakeholders.
4
Vision: To be the champion of the socio-economic prosperity of the people of Africa. Mission: Statement: We offer inclusive, customer-focused financial services that socially and economically empower our clients and other stakeholders.
WATER & SANITATION SITUATION IN KENYA
Kenya is considered as a water-scarce country with less than 647 cubic meter of water available per capita compared to the international benchmark of 1000 cubic meters per capita.
Only 9 out of 55 water service providers in Kenya provide continuous water supply. Seasonal and regional water scarcity aggravate the difficulty to improve water supply.
Research conducted in the country have revealed a Water demand of up to 70% in some of its regions.
Vision: To be the champion of the socio-economic prosperity of the people of Africa. Mission: Statement: We offer inclusive, customer-focused financial services that socially and economically empower our clients and other stakeholders.
The Government is unable to meet this huge demand and therefore the Ministry of Environment, Water and Natural Resources has invited Public Private Partnerships (PPP) to complement the government’s efforts in increasing access to Water.
On the other hand about 62% of the population has no adequate access to improved sanitation.
WATER & SANITATION SITUATIONAL IN KENYA (2)
Vision: To be the champion of the socio-economic prosperity of the people of Africa. Mission: Statement: We offer inclusive, customer-focused financial services that socially and economically empower our clients and other stakeholders.
EQUITY BANK WASH PROGRAM
Equity Bank entered into partnership with Water.org-USA in September 2011 to develop credit products and offer banking acquisition towards solutions to water and sanitation.
In this context, the Bank received a financing of USD 395,478 from Water.Org to stream line financial services and lending structures for Water and Sanitation in the region.
The Bank’s Research and Credit departments commissioned a market demand study in December 2011 within the 8 former provinces in the Kenya.
Vision: To be the champion of the socio-economic prosperity of the people of Africa. Mission: Statement: We offer inclusive, customer-focused financial services that socially and economically empower our clients and other stakeholders.
EQUITY BANK WASH PROGRAM
The study sought to try and understand :
The situation on the ground in regard to water usage, access, sufficiency, perceptions and future plans for improvement.
Understand the usage and perceptions towards Sanitation.
Identify availability, usage and attitudes towards financial support available for acquisition and improvement of the Water and Sanitation situation.
Vision: To be the champion of the socio-economic prosperity of the people of Africa. Mission: Statement: We offer inclusive, customer-focused financial services that socially and economically empower our clients and other stakeholders.
WHY WATER CREDIT
1. Dwindling donor funds2. Reduced ownership of donor funded community
projects3. No prior focus on private owned interventions4. Inadequate resource allocation to Water and
Sanitation by the Exchequer Vis avis growing population.
5. (Water Services Regulatory Board, WASREB estimates that 40 Billion Ksh need to be pumped to the Water and Sanitation sector every year for the next 10 years to normalize this trend).
6. Huge business opportunities in the Water and Sanitation sectors
WASH PRODUCTS
Equity Bank developed two broad products to address the gaps in WASH. The products were:
Maji loanThis is a funding acquisition of various water related interventions such as:•Rain water harvesting (roofing& gutters) •Water storage (Water tanks, water pans, and dams)•Well digging•Sinking of boreholes and Bore-wells•Water pumps and accessories’ financing •Connections where there is a ready source of water• Business finance for authorized water merchants and vendors•Water purification and treatment plants/ systems
WASH PRODUCTS (2)
Jamii safi loan
This is a Credit product specifically designed to cater for investments towards access or improvement of Sanitation such as:
1. All types of toilets/Latrines – Construction and improvement2. Installation of Biogas digesters and stoves3. Construction of septic tanks and Conservancy tanks4. Connection to sewer lines5. Exhauster trucks
OTHER PROGRAM PARTNERSEquity Bank Water & Sanitation Program has built several partnerships with suppliers and service providers to ensure smooth delivery of services to the customers, e.g:
1.Roto Moulders - Supply of Water storage Tanks2.Top Tanks - Supply of Water Storage Tanks3.Kentainers - Supply of Water Storage Tanks4.Umande Trust - Construction of Bio-sanitation facilities
INNOVATIVE FINANCING MODELS
EBL is building synergies with other partners to develop innovative financing models.
Examples of these are as follows:
1.Aid On Delivery with KfW (German Bank) and WSTF with rebates of 40% to Water Service Providers and/Water Companies2.Output Based Aid with World Bank’s Water & Sanitation Program3.Guarantee funds for people in Low income areas 4.Group guarantees 5.Chattels guarantees
Current Program Loan Analysis
As at now, 93% of loans disbursed are Maji loans with an average loan Size of Ksh. 30,000 (USD353). Sanitation Loans stand at 7% but have a bigger average loan size of Ksh. 40,000 (USD 470)
CHALLENGES FACED
Difficulty in Marketing sanitation due to cultural barriers-e.g. In some places in the country, shit is never mentioned; Shit from children is not considered harmful
People do not understand the direct economic benefit of good sanitation- in monetary terms.
Other more pressing needs such as food, school fees etc. that place sanitation as secondary to other needs thus less prioritized.
Limited reinforcement from Public Health Department in some areas.
High risk of lending especially to low income earners prompting financial institutions to raise interest rates to counter the risk.
SUPPORT NEEDED
1. Support is required in triggering demand/Marketing Sanitation: Selling the benefits of good sanitation.
2. Donors to provide Loan loss guarantees especially to people living in low income areas to facilitate financial institutions to offer loans at affordable rates.
3. Government to formulate and implement policies that make it mandatory for every homestead to have a sanitation facility for safe disposal of human waste.
THANK YOU
QUESTIONS
