The WaterCredit Initiative in India

Richard E. Thorsten, Ph.DDirector of International ProgramsIndia WaterCredit Stakeholder Engagement ForumFebruary 19, 2013 - Delhi

WaterCredit in India: Milestones

2004

2007

20082011

2013

Sample WaterCredit MFI Model Diagram

MFIs

JLGsHouseholds

WSH NGOs

Water.org

“smart subsidy” grant for start-up, product & capacity development costs

credit enhancements (guarantees)

Utilities

water &/or sewerage services

Banks & CapitalMarkets

portfolio growth capital

connection fees

loansloan repayments

“smart subsidy” grant for technical assistance & capacity development costs

technical assistance

technical assistance

other WSH improvements

toiletsRWH tanks

drip irrigation

WaterCredit’s Strategic SubsidiesSoftware 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

Water.org’s RolesProgram DesignPhilanthropic InvestmentFinancial and Program MonitoringPartner Capacity BuildingWSH Facilities and Water Quality VerificationEvaluationBroader Sector Engagement

WaterCredit Loan & Borrowers’ Characteristics

CHARACTERISTC VALUE

Average Loan Size $150

Average Effective Interest Rate 16.7%

Average Loan Term 15 months

Cumulative 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) 3,415

Percent of Borrowers Below Poverty Line 52%

Percent of Loans Given to Female Borrowers 89%

Percent of Loans Given to Those in Rural Areas 80%

Making Progress in IndiaINDICATOR Progress to

DateExpected by April 2016

WaterCredit Partners 18 23

Water.org Partner Investment $4.9 million $9.65 million

Expected Financial Capital Leveraged

$20.7 million $48.2 million

Indian States Impacted 13 15

WaterCredit Loans Disbursed 98,600 325,000

Water and/or Sanitation Beneficiaries

490,000 1,500,000

Overview of ChallengesWater-Related Issues

Water Resource ManagementWater QualityWater Infrastructure

Other ChallengesMicrofinance EnvironmentAwareness of Sanitation OptionsScaling WaterCredit in New Markets

Evaluating Impact

0%20%40%60%80%

100%

BaselinePost-line

Future Evaluation EffortsPlanning more systematic evaluation of

WaterCredit work occurring between 2008-11.

Common evaluation survey and protocol administered by current WaterCredit partners in 2011-12Includes treatment and control groupsOver 11,000 baseline and 8,000 postline

surveysIncludes demographic, socio-economic, water

& sanitation, hygiene, WaterCredit, health, and other data

Contract with 3rd party researcher to evaluate 2011-16 initiative.

THANK YOU!