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Microfinance for water supply services [Quality Assurance: John Butterworth, Rachel Cardone and Jim Doherty]

Author(s): Fonseca, Catarina  |  Butterworth, John  |  Cardone, Rachel  |  Doherty, Jim

Publisher: WEDC
Place of publication: Loughborough University, UK
Year: 2006

Series: WELL Fact Sheet
Collection(s): WELL

Links:

• http://www.lboro.ac.uk/research/wedc/well/

Microfinance is topical because it can make an important contribution to the achievement of the Millennium Development Goals (MDGs). Used properly, it can help to reduce income poverty, lessen the vulnerability of the poorest and empower women. For the water sector, it can help the poor to have access to water services.

Microfinance has existed for centuries around the world, including Africa, but 2005, the UN year of microcredit, was instrumental to inform and advocate for microfinance. Mainstream banks such as Citigroup, Deutsche Bank, Credit Suisse, the Brazilian Unibanco and ICICI Indonesia have now found out that the poor, like everyone else, attach great value to being able to save and to face unexpected expenses.

Historically, microfinance has focused on other sectors (such as trade, small scale producers). As the topic of financing water supply services has moved up the policy agenda, it has received considerably more attention in recent years within the water sector.

This factsheet explores examples of microfinance for the water sector. For additional information, readers are advised to consult the WELL Factsheet on microfinance for sanitation, and the WELL Briefing Note 16 on local financing mechanisms for water.

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