Preliminary results of research [1] in India suggest that microlending may be an effective means of helping households in communities with existing trunk infrastructure to access improved water supply and sanitation services in their homes. The study represents “the first known investigation into the potential for microcredit to unleash latent demand for water supply and sanitation improvements among low-income households in developing countries”.

Through in-depth interviews with more than 800 households in the city of Hyderabad in India, researchers conclude that, even if provided with market (not concessional) rates of financing, a substantial proportion of poor households would invest in water and sewer network connections.

[1] Davis, J. … [et al.] (2008). Improving access to water supply and sanitation in urban India: microfinance for water and sanitation infrastructure development. Water science and technology ; vol. 58, no. 4 ; p. 887-891. Read full article here

Related publication: Fonseca, C. ... [et al.] (2007). Microfinance for water, sanitation and hygiene : an introduction. Delft, The Netherlands, Netherlands Water Partnership (NWP). Download here

Related web sites: WaterPartners International - WaterCredit Initiative : WASH news Finance - Microcredit

Contact: Jenna Davis, Stanford University, USA, email: jennadavis@stanford.edu

Tags: financing, sewerage, south asia, water distribution