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12.16.2013

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When microcredit facilitates access to on-site sanitation

As we know the absence or insufficiency of infrastructure for water purification in the poorest countries, is the cause of many infectious diseases. We also know that this type of disease is one of the leading causes of infant mortality in the world...

A new ray of hope

It is a fact, funding sanitation systems that meet Western standards represents a huge investment for developing countries. But, we know the importance and the need to implement such systems in these countries in order to resolve the various dangers involved by the lack of hygiene of local populations.

Fortunately it seems that various initiatives have already been implemented in order to propose viable and "affordable" solutions for poor countries which are largely devoid of stable financial resources. Moreover, it turns out that one of the proposed initiatives to this problem is link to the use of microcredit. Indeed, this initiative is the origin of fourteen experiments launched since 1981 in several countries in Africa, but also in India, Vietnam and Peru.

Innovation for sanitation

The use of microfinance is proving to be a very promising solution to assist populations affected by the spread of infectious disease due to the absence or lack of operational sanitation infrastructure in certain territories. In addition, microcredit appears here as an innovative financing relay for the development and deployment of autonomous and effective sanitation systems.

We know as well as the use of microcredit brings a lot of advantages, since it allows to produce a leverage effect making possible the construction of more sanitation facilities using limited resources. In addition, it provides a better allocation of available resources thanks to the Microfinance Institutions (MFI). Finally, we can also note that the use of microcredit brings to the concerned populations the promise of a certain durability for the most appropriate mechanisms.

A personalized offer

Another highlight, it seems that the matching of supply and demand for microcredit for sanitation requires that some MFIs mobilize. Indeed, we know that they must answer various questions to better understand the needs of people and their ability to acquire this type of financial service. Thus it results the customization of the offer of loans to provide adapted advice on the various projects launched in territories like Africa, India, Vietnam or Peru.

For more information regarding this topic please visit the CGAP web site to find the full report of all the solutions mentioned in the article: Microcredit for access to on-site sanitation

Sources: CGAP Microfinance Gateway

Tags: Africa, India, Vietnam, Peru, sanitation of water, hygiene, developing countries, microcredit, MicroWorld, CGAP