Microfinance for Water and Sanitation: An Example of Client-Focused Innovation

Did you know that more people in the world have a mobile phone than a toilet? Did you know that a third of humanity does not have access to adequate sanitation? Did you know that over a billion people do not have access to safe water? It’s hard to imagine how the world would look if fewer people had trouble securing their water supply. It would probably translate into a drastic global increase in productivity.

The prospect is tantalizing, the challenge colossal. Yet, satisfying results remain frustratingly elusive. Microfinance has often been seen has key to making a global difference by reaching people on an individual basis. Surprisingly, the microfinance world has long struggled to find an elegant solution to water supply challenges. Admittedly, numerous wells have been drilled but, more often than not, lack of funding for maintenance and skill training has entailed the short to medium term failure of the effort. Now, a new microfinance organization is taking a shot at a new model of delivering efficiently targeted funding to ensure long lasting results. Water.org has launched an initiative called WaterCredit that plans on tackling the problem of water access by focusing on the related bottleneck that is access to water.

What‘s interesting, and innovative with the WaterCredit model is that Water.org doesn’t simply handout one-shot grants but builds a portfolio of initiatives. These initiatives are funded provided they result in a simultaneous increase in infrastructure, local know-how and overall capacity. The model is having tremendous success and now boasts over 57,000 loans distributed by 24 WaterCredit partners in four countries in Asia and Africa. The WaterCredit model is actually lighting the path to a new idea of microfinance, instilled with ideas of eco-sustainability that may very well be the future.

India’s social enterprise ecosystem: Recent developments and perspectives

Much is made around the bustling entrepreneurship of Silicon Valley and its flurry of start-ups. But Silicon Valley is not the only place where small, ambitious and innovative businesses are making a difference. In India, social enterprises have been flourishing over the past decade. Admittedly, their influence is great as they reach out to the almost 37% of Indians living below the poverty line. However, they are still largely under the radar of media coverage.

Fortunately, a new report by consulting firm Intellecap is shedding light on the recent developments in the sector. The study, On the Path to Sustainability and Scale: A Study of India’s Social Enterprise Landscape highlights key defining features of this type of entrepreneurship. First and foremost, the sector is still quite young, more than three-quarters of all social enterprises have existed for fewer than five years and 42% of all these entities were created within the past two years. Another important feature is that, unlike old-school businesses, these enterprises are extremely mobile. More than half have head offices in India’s main cities, while their operations network the country. Albeit small, they are already extremely powerful. They start with a limited pool of beneficiaries (17% have 500 or fewer beneficiaries) yet are able through the injection of venture capital to scale up very quickly. Twenty-eight percent already have 50,000 beneficiaries or more. Considering the young age of the sector, the immense public they reach and their proven capacity for growth, social enterprises are slated to carve out the features of the Indian business landscape.

While in some cases the growth of microfinance has had negative consequences in the past, the recent development of socially responsible enterprises seems to be on a different path. Not only because the lessons of the past have been learned but also because their heavy reliance on venture capital and crowd funding has made them more accountable than their predecessors. New social enterprises 2.0 are spearheading what promises to be a huge wave of developmental initiatives.