Sanitation Microfinance in Asia

Claire KellyAsia and the Pacific, Field Team Blogs, Microcredit

Claire is the Asia/Pacific Regional Director for Whole Planet Foundation.  She is responsible for overseeing and expanding a portfolio spanning the region – from Pakistan to Samoa.

Whole Planet Foundation’s partner in Indonesia, KOMIDA, analyzed their client information and determined that about 60% of their clients do not have access to sanitation in their homes. Therefore, in an effort to better adapt their services to their clients’ needs, KOMIDA piloted a sanitation loan product in 2014 and officially began implementing the product in 2015.

The sanitation loan provides clients with the lump sum cash they need to build a latrine, allowing them to repay the MFI in small installments over time, making the latrine affordable. KOMIDA also provides technical expertise for quality construction. KOMIDA’s product was developed with and is being rolled out throughout KOMIDA’s branch network as local technicians are trained and on-boarded. As of September 2016, the organization had disbursed in total almost $2 million in sanitation loans to a total of 6,781 KOMIDA clients. They plan to continue to scale up the program. Sanitation loans are already offered in some of the first WPF-funded branches and the product will reach some of the newer WPF-funded branches in Kalimantan next year. If you visit the KOMIDA website, you can see the details of the sanitation loan product.

sanitation_finance_1Another Whole Planet Foundation partner who has partnered with to develop a sanitation product is Negros Women for Tomorrow Foundation (NWTF), WPF’s partner in the Philippines. For example, NWTF client Lunniela, who is pictured to the left with her husband, first borrowed from NWTF to help expand her business. She invested about $106 in her shell craft business to supplement her family’s income. Along with her business loan, Lunniela was also able to take a sanitation loan from NWTF to finance the construction of a latrine in her home, pictured below. The sanitation loan is often called a WASH loan which stands for “water, sanitation and hygiene.”

At NWTF, local masons recommended by the clients are trained in toilet or latrine construction. Often a client’s husband will go through the training and do the construction himself. While the loan is disbursed in cash to the sanitation microfinanceclient, the mason also signs the contract to clearly indicate who will be the one responsible for buying the materials (it could be either). Different packages range from 6000-10,000 PHP (≈$133-$233), and the average loan size is
$200. At NWTF, clients pay the same interest they would normally pay on a business loan and also a fee of about $6-8, which covers the training and certification of technicians. Loans can be repaid over periods of 3 months up to 2 years.

NWTF started disbursements in July/August 2015 and they are disbursing about 3-400 WASH loans/week across their operations. In the WPF-funded project area of Eastern Samar, Whole Planet Foundation capital is used to finance all of the branches’ loan products, including the WASH/sanitation product.

According to a recent WSP and report, lending for household water and sanitation products can leverage dollars invested by 10x. This is because of increased health outcomes and gains in time and productivity. When MFIs provide financing for sanitation products, it makes them affordable to people who couldn’t necessarily pay upfront. According the report,’s global portfolio finds that about 80% of sanitation loans are made to households at the $2/day level.