WASTE / Amref Flying Doctors / Amref Health Africa / Take-a-Stake Fund / ACTIAM / Sidian Bank / Ministry of Health Kenya / Imarika SACCO / Aqua for All

Accountability for Scaling Market Based Sanitation Financing

Thursday 30 August | 09.00-10.30 | Room: FH Little Theatre
Amref Flying Docters

Market based sanitation starts with demand. The Ministry of Health and Amref Health Africa will outline that in the case of sanitation in Kenya demand needs to be generated through a succession of CLTS and sanitation marketing. Demand needs to be accompanied by improvements in the supply side, be it in skills of local sanitation entrepreneurs or material availability and choice. WASTE will outline that this lowers prices and the ensuing standards allow for commercial financing to move in easily. A well organised saving and credit cooperative has entered into this new market and offers financing to household and entrepreneurs for sanitation. The Sidian Bank serves similar clients but also schools and SACCOs. There are entrepreneurs in the sanitation market that are not yet served as Take-a-Stake Fund will make clear. That this is of interest to impact investors is made clear by Actiam. These sequentially logical presentation will be summarized in a draft accountability framework and metrics. The audience can question each of the presenters in a Q&A session, yet focus will be on questions and comments on the draft accountability framework and metrics.

Gold standard events are committed to ensure the gender balance in speakers/panellists and young professional representation in the session.

Programme

DEMAND: The Ministry of Health and Amref Health Africa will outline that in the case of sanitation in Kenya demand needs to be generated through a succession of CLTS and sanitation marketing.

SUPPLY: Demand needs to be accompanied by improvements in the supply side, be it in skills of local sanitation entrepreneurs or material availability and choice. WASTE will outline that this lowers prices and the ensuing standards allow for commercial financing to move in easily.

FINANCE: A well organised saving and credit cooperative (Imarika) has entered into this new market and offers financing to household and entrepreneurs for sanitation. The Sidian Bank serves similar clients but also schools and SACCOs (Imarika). There are entrepreneurs in the sanitation market that are not yet served as Take-a-Stake Fund will make clear. That this is of interest to impact investors is made clear by Actiam.

These sequentially logical presentation will be summarized in a draft accountability framework and metrics.

SCALE: Based on a shared vision and combining the strengths of each partner and being accountable for it, we are ready to scale in Africa. 

The audience can question each of the presenters in a Q&A session, yet focus will be on questions and comments on the draft accountability framework and metrics, a social media account will be kept open to continue the dialogue.

Conclusion

The Diamond Model used by Financial Inclusion Improves Sanitation and Health (FINISH) programme in Kenya (INK) assign logical roles of the key stakeholders. The session focused on the mechanisms through which each is held accountable for its responsibilities to deliver on the common overall goals of 8,000 improved & 20,000 basic toilets constructed and used – 2 working sanitation markets created (Busia and Kilifi Counties) and € 9 Million invested locally in sanitation through commercial institutions and mobilising savings of people. 

For successful scaling sanitation, demand creation for improved sanitation systems must be backed by social and political accountability mechanisms. These emphasize involvement of entire communities, empowering them to demand better sanitation and generally having them propel themselves to improve their status.

Supply side accountability starts with selection of high-potential locally based entrepreneurs. The focus has been on the youth to create employment opportunities and empower them financially The entrepreneurs are supported in developing technical and business skills by specially developed standard operating procedures.

For the financial institutions, sanitation loans (currently over € 6 Million) have been embedded into the financial partners growth strategies. Staff are allocated targets to deliver on sanitation loans, a sanitation loan product that has undergone rigorous scrutiny prior to approval and further unique identification in their information systems. Regular reporting is done to partners, financial institutions management and shareholders. Repayment rates are extremely high (upper end of micro-finance) and sanitation portfolios make refinancing by external financial partners a realistic option that is currently being explored.

From the audience: the repayment rates are extremely high (upper end of micro-finance). This makes refinancing sanitation portfolios of FINISH INK financial partners a realistic option, thereby attracting more commercial funding to the sector.

Recommendations:

1) The existing knowledge gap on sanitation and its perceived risks has resulted in low acceptance by the financial sector. Demystification of the segment through social accountability is therefore crucial for its growth and viability by attracting entry of a wider range of financial institutions.

2) Many countries are not ready to take up full market based financial solutions. To bridge the gap, blended finance is still required. For sustainability, a transitional strategy should be employed to reduce the reliance on grants, empowering local players to provide market-based but friendlier financial options. 

Initiatives:

1) Better health results in reduced medical related expenditures. Communities are better positioned to save and repay sanitation loans. This is a motivational factor for more financiers to consider the sanitation loan segment. Through linking sanitation (preventive) with curative health provisioning cost of the latter will be much lower, FINISH will attempt to quantify this. 

2) FINISH invested in an information technology platform to improve result reporting and linking them to SDGs. Organizational and program goals are linked to specific country goals. On-line reporting is part of the scaled version of FINISH, Finish Mondial. Through its scale SDGs are addressed meaningfully. It uses locally tailored diamond (stakeholder) models covering 6 countries and intends to mobilize hundreds of € Millions in commercial sanitation financing.