George Muruka describes the main steps of the action-research and what support SanFin partners have received. The presentation takes lessons in terms of the type of support needed by MFI so that they can deliver loans for sanitation. Finally, G. Muruka looks at the wider context of the East Africa region, highlighting the potential size of the sanitation microfinance markets (considering the need for accessing improved sanitation in the region). G. Muruka considers potential actions from sanitation practitioners which could make the sector more attractive to microfinance institutions.
2. MicroSave
2
A consulting company in financial inclusion, 15 years of
experience, 100+ consultants.
Support financial institutions to develop new products,
operational strategy and improve access to financial services
among the low income people.
Current Service areas: Banking operations, digital financial
services, Social performance management and livelihoods
enhancement financing
Livelihoods enhancement financing: (i) support with Water,
Sanitation, Energy, Housing microfinance and agriculture.
Africa: 2 officers, 30 staff,18 countries. Asia: India and 10
SEA countries.
3. Role in SanFin Tanzania Project
Activities3
1. Formation of the working group
MicroSave and Tremolet Consulting actively sought to form a
working group of both WASH organizations and financial institutions.
2. Engagements with Microfinance Institutions
Contacted at least 10 financial institutions to participate in the SanFin
project e.g. DCB, FINCA Tanzania, CRDB, KCB Tanzania, TGT, xx
community Bank,
Results:
Few commercial banks were interested.
2 MFIs participated indication of challenges related to motivating
financial institutions to actively participate in the sanitation sector.
3. The Microfinance Housing Working Group: Had a positive view of SanFin
and enabled us to identify the important linkage between sanitation and
housing.
4. Training and capacity building: This has been the core role of MicroSave.
4. Sanitation Microfinance
Framework
Product
Roll out
Under development with SinFin Tanzania experience
Strategy &
Product
Diversification
Product
Development
6 moths
Sanfin Team
Pilot Test
6 12 moths
MFI/NGOs buy-
In,
Training ,
Demand
mapping &
creation
(continous)
5. SanFin Project Components
5
1. Clients / Customer Needs Assessment
MicroSave trained partners on skills in market research
Aimed to help partners identify potential clients sanitation and
financing needs
A total of 14 staff trained on Market research held in February 2013.
2. Financial Products Concepts Refinement/Development
Partners supported to undertake potential clients needs assessment
Results:
CCI undertook a market research on the financing needs among its
target members/clients.
ECLOF Tanzania undertook a research in Arusha.
Tujijenge Tanzania (trained earlier by MicroSave) decided to adopt
an existing product.
3. Online/offsite support to key staff of piloting organisations.
7. Market Research for Sanitation
Financing
7
Importance
Identification of clients needs
Identification of financing approaches and product concepts
Types of Design:
(i) Qualitative to capture potential clients views, ideas and concerns.
(ii) Quantitative: using structured questionnaire to measure the proportion of clients
Results:
Generally, the research results should inform you about the types of client to focus on and
the financial requirements
Outcome of MicroSave research training:
(i) SanFin Tanzania partners determined the potential demand for sanitation finance
(ii) Partners identify areas of improvement on existing programs e.g. Jenga Fund
adopted the approach of extending loans outside the Federation groups,
TTz refined its existing business loans.
(iii) New product development e.g. ECLOF Tanzania developed new
USAFI range of financial products.
8. Product Pilot-Testing and Rollout
8
Coverage
Pilot testing of new or refined products is very important
Testing enables the organisation to adjust systems and learn from any mistakes
Participants Trained
3 days course undertaken in June
A total of 8 staff members participated
1 CEO attended (Special thanks to CEO of ECLOF Tanzania for the commitment shown)
Outcome
CCI commenced its pilot in Temeke
ECLOF Tanzania launched a pilot in December 2014
TTz disbursed Tsh. 23 million to Sanitation enterprises to improve sludge and solid waste
collection in Dar es Salaam
Lessons
The need for ongoing engagement with managers and staff in an organisation to see
business.
Toilets are public utilities. There is need to actively involve community members/leaders for
successful implementation e.g. Temeke elders.
Testing requires some extended time (12 24 months) span for organisations to test
10. MDG Targets and Achievements
10
MDG Target 7.C: Halve, by 2015, the proportion of the
population without sustainable access to safe drinking
water and basic sanitation.
77 countries have met the MDG targets for sanitation
79 countries are off track to meet the MDG target for
sanitation
2.5 Billion people will lack improved sanitation in 2015
Source: http://www.wssinfo.org/
15. Microfinance Situation
15
Access to finance is increasing generally with
many interventions in financial sector e.g.
(i) Microfinance policies and laws,
(ii) banks going down market
(iii) Digital finance
Tanzania: Reduction to 32% (adult population not
accessing formal finance)
Kenya: Reduction to 26%
16. Why the slow Response to Sanfin?
1. Limited understanding of the sanitation sector
o FIs are familiar with business and trading sectors
o Lack of strategy on sanitation financing
o Low staff capacity
2. Sanitation operators slowly commercializing their activities
o Weak legal structure e.g. CBOs, FBOs, individuals etc
o Government funding expectation
o Excessive focus on advocacy, capacity building/training
o NGOs are not familiar with the demands of FIs e.g. Financial
proposal
o Limited commercialization of WATSAN activities
3. Unclear regulatory environment
o Unclear policy especially on private systems
o However, public actors slowly appreciating role of private
operators due to limited public funds
17. From Self-Helps to Sanitation
Enterprises
17
Sustainable Sanfin = adoption of market / enterprise
approaches
Types of Sanitation enterprises:
1. Private: Individual/Small company
o Individuals operating a small water kiosk, Toilet and bathroom
blocks
o Individual operating a public toilet facility on a lease
arrangement with country or municipal council e.g. Iko Toilet
o Company providing mobile/portable toilet facilities for e.g.
funerals, weddings, public rallies etc.
2. Group Owned Enterprise
o A group operating sanitation services to the community e.g.
youth groups, providing HHs with polythene bags and collect
HH waste on regular schedules
o SHGs in communities operating Water, Toilet and bathroom
18. MicroSaves Future Engagement
18
MicroSave will be available to any of the SanFin Tanzania
partners in 2015.
We can provide limited online response to queries.
Hiring MicroSave for specific training or study e.g.
CCI
Basic Microfinance training
Lending systems (procedures and delinquency management) advise
Tujijenge Tanzania:
Possible sanitation enterprise mapping study
ECLOF Tanzania
Pilot Test Review and Evaluation to identify areas of strengthening
Pilot Performance documentation for resource mobilisation
19. THANK YOU VERY MUCH
19
Feel free to contact us
George Muruka
[Muruka@microsave.net]
MicroSave
[www.microsave.org]