Water.org Water Credit Director April Rinne
Fighting the Global Water Crisis, One Micro-Loan At A Time
Though there are many organizations dedicated to bringing the developing world access to clean water and sanitation (such as Charity: Water), Water.org has been among the most high-profile, due in part to co-founder Matt Damon’s PR efforts on their behalf.
While other charities may have similar goals, Water.org’s WaterCredit program is unique in that it is works in partnership with microfinance institutions to establish markets in which there is fair access to affordable loans for everyone. As WaterCredit Director April Rinne said, “Water.org forges partnerships with microfinance institutions (MFIs) and helps build and develop sustainable micro-loan products designed expressly to meet the water and sanitation needs of their clients.”
In Water.org’s quarterly conference call, Rinne answered questions from people around the world about the organizations efforts to address the global water crisis.
I was recently in Mali, and became painfully aware of water problems there, including a lack of sanitation. You’ve mentioned working in East Africa, Asia, India… but West Africa has very little in terms of microfinance projects. Have you considered anything along those lines?
WaterCredit basically requires two crucial sectors to be in good shape to succeed. One is we need a microfinance sector that is robust enough, sophisticated enough, both in terms of depth and breadth to develop new products and deploy capital that makes our investment worthwhile over time. Second, we need a water and sanitation sector that has enough ability to develop the infrastructure. Places, for example, where it’s just a complete desert; that’s not an issue of access to finance, that’s more a matter of if it’s going to cost a significant amount to bring water closer to a community. That’s going to price MFIs out of the picture, and in turn, their clientele. That’s where WaterCredit is a solution, not THE solution. For communities like that, it’s difficult.
We do a territorial assessment for any new potential country where we could work. We take a close look at what the microfinance and water and sanitation sectors look like. Having one and not the other is not going to do it for us. There have been multiple cases in which the MF sector looks great, but the water and sanitation sector not so great, and vice versa. The water and sanitation might be fairly innovative and have good access, but the MF sector might be very thin or not developed at all. That’s often the case in places such as China or Ethiopia, where there are limitations on how to get foreign capital into MFIs. Even if we wanted to get into these countries, it wouldn’t be practical for us to do so.
Turning to West Africa, we have looked at different countries. We certainly have not ruled them out. However, the number and size of MFIs tends to be pretty small, not necessarily financially and operationally sustainable. Those are not good indicators for us, because we need for an organization to at least reach financial sustainability and be poised for growth. Compared to some other Latin American and southeast Asian countries, somewhere like Mali is certainly on our list, but not a top priority because it would be a much more significant investment to reach a smaller number of people. There is so much demand for WaterCredit, but there are limited resources, even for us as an organization. We cannot be everywhere we’d like to be simultaneously.
I think the reason the water sector is not developed in West Africa is because the MF sector is so weak there. I understand that you need certain conditions to get involved, but I believe that the intervention of MFIs in the region will improve all the conditions for access to water. Local pump makers and technicians lack resources to make their enterprises operational.
We are very aware of that, and that we can’t be everywhere we’d like to be. One thing that we do in most countries, including most in West Africa, is a national-level MF association. It’s more of a practitioner network in which most MFIs in the countries are members, along with the ministry, finance, government, financial services consultant, and so fourth. We are a member of a global network that includes the MFIs of more than 60 different countries, and we are often featured in articles and attend conferences in which we get the word out to national level associations, for that to hopefully trickle down within the country so that they can then be the conduits of that information amongst their membership. We are happy to get interest from MFIs in the country, then we would have to get a broader territorial assessment. It’s a way for us to be a bit more effective and efficient with our use of funding and time. But we are seeking to build some of those macro-level financial infrastructures and overall awareness and empowerment of the MF community through some targeted associations we have. In all of the countries we work in right now, there is a national-level MF association that we engage with and are a member of, in addition to working with individual MFIs.
We’ve been doing some work in southern Sudan. I was curious if you provide educational materials to disseminate in communities that we could take advantage of?
One of the things we are in the process of developing, which is not yet complete, is a WaterCredit toolkit, which we will ultimately post on the website. It will be a resource document package of information– everything from slides to manuals to nuts and bolts of local resources that would be designed primarily for MFIs. There are more organizations we’d like to work with that we can’t because we are a small organization, so they would be able to go on the website and download the toolkit. Granted, it would not spell out every detail– obviously the needs of South Sudan are different than the needs of Bolivia, which are different than the needs of the Philippines. So we are trying to design a toolkit that will have some general applicability, then we can dive into more regionally-focused details over time.
I would encourage you to go to our website, where we have a library. We are actively seeking contributions from other organizations, and I didn’t underscore that point enough when I mentioned the website, WaterCredit.org. This is intended to be a public resource that highlights all activities that are happening between MF, water and sanitation, and, more broadly, financial innovation for water sanitation. This is not intended to just be about water credit. We have been trying to get more publications, documents, case studies, et cetera from other organizations anywhere in the world and we will gladly post them there. There are about a dozen or so documents there and hope there will be more over time. –Holly Young
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