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At an April press conference, the president of the World Bank, Jim Yong Kim, held up a handwritten number and announced, “2030. This is it. This is the global target to end poverty.” That historic moment also served to underscore some of the dilemmas actors in the WASH sector grapple with. How do we establish audacious, yet realistic goals? How do we announce an ambitious goal, such as full water and sanitation coverage in a number of countries, and have confidence that we have a reasonable chance of achieving it? This week is World Water Week, and in partnership with the Thomson Reuters Foundation, we asked some of the world's water experts exactly these questions. View the full debate here.
In the United States we wake up each day, make coffee, brush our teeth, and shower; meanwhile around the world millions of individuals are sick and dying from entirely preventable water-borne illnesses. In fact, 4,100 children under the age of five die every day from a water-related disease—that is 1 child every 21 seconds.
Given the World Bank’s goal to end extreme poverty by 2030, Water.org knows that it will be impossible to achieve this objective without investing in groundbreaking and sustainable ideas in the water, sanitation, and hygiene (WASH) sector.
Current (WASH) tactics are concentrated on providing 80 to 90 percent subsidized solutions that view everyone in need as equally poor or helpless. The philanthropic cost per person of this approach is high—so high it is not viable or scalable.
Building on the successes and failures of the sector, it is time to start shifting the question from “how do we give people WASH access” to “how do we help empower them to address their own water and sanitation needs?” In short, how do we help them tap into their intrinsic power as customers? The myth that the poor are all too destitute to pay for services must end. There are millions of poor who could get access to WASH services if they had access to the right financial tools. If so much is being financed through traditional top-down charity models, why not invest in alternative approaches that are game-changing?
The reality is that most people living in slums and informal settlements pay on average five to 15 times more per liter of water than their middle-class neighbors. These families and communities, while poor, are not helpless. Many are willing to invest in changes that will save the lives of their children, reduce the time they spend sick and gathering water, as well as give them the dignity of a toilet.
In an effort to address some of the bottlenecks to progress, Water.org has pioneered the WaterCredit model, a market-driven approach that puts microfinance tools to work in the WASH sector. Through this method, Water.org works with financial institutions (FIs) to provide small loans to individuals to finance their own WASH solutions—from a household water connection or a toilet to a rainwater harvesting tank. As loans are repaid, those dollars can be redeployed to more people, creating a cycle of change and empowerment that drives economic growth, enables people to invest in their own solutions, and dramatically reduces the philanthropic cost per person reached. So far, Water.org has invested $7.5 million in philanthropic capital which has in turn leveraged $28.8 million in loan capital. This has translated into 162,844 loans and empowered 880,000 people to meet their own WASH needs. In total, 93 percent of borrowers have been women.
The potential human and economic impact of access to clean water and sanitation cannot be exaggerated, particularly for women and children. The WaterCredit model is not just about financing WASH solutions— it is income-enhancing. An estimated 200 million hours a day are spent globally collecting water (women and girls account for 76 percent of that time). Each year children miss out on 443 million school days due to water-related illnesses. With improved water and sanitation access people, primarily women and children, will be freed up to go to school, secure a stable job, or open a business.
From our perspective, we can call the day a success if we have helped people get access to the capital they need to get WASH services, use that financing to secure the services, and then repay that loan so that the financial institution can continue to supply more loans to others.
The test will be to see how far down the economic pyramid solutions driven by commercial capital can go. We understand there will always be communities that live in extreme poverty that need subsidized assistance; but as we work to improve the overall efficiency of this space, and reach more people through commercial capital, this will free up philanthropic capital to meet the needs of the extreme poor. This is the type of innovation that we believe can get us closer to the goal of everyone in the world having access to safe water and sanitation.
We recognize that we can’t do this on our own. The WASH crisis does not exist in isolation, nor do the solutions to solve it. Through a mix of global engagement and advocacy activities, we aim to spur innovative financial solutions that can unleash the latent demand in the water and sanitation sector and move the poor from beneficiaries to customers. Billions of dollars are invested each year in this sector—but the real power will be in making those investments more effective and ensuring that the world’s most vulnerable have their voices heard and have a seat at the table.
Gary White is Co-Founder and CEO of Water.org, a non-profit organisation dedicated to empowering people in the developing world to gain access to safe water and sanitation.