WaterCredit Market Assessment Dissemination Workshop held in Addis Ababa on July 23, 2014
WaterCredit Market Assessment in Ethiopia was organized and carried out by the Water.org in March-April 2014 in close coordination and cooperation with Care, WaterAid, WASH Ethiopia Movement and COWASH. The research was done by an Indian consultant company M2i. The consultants were Mr. Rahul Bist and Mr. Deepak Alok. Water.org, WaterAid, WEM and COWASH organized the one day workshop on July 23, 2014 in Desalegn Hotel, Addis Ababa to review the draft assessment report and to discuss on how to bring Micro-Finance Institutions closer to WASH sector in Ethiopia and to provide loans for different kind of WASH products and services.
The event was facilitated by Arto Suominen. The opening was planned to be done by WaterAid Country Representative and the Chair of WASH Ethiopia Movement. Unfortunately he could not make it. Instead Abiy Girma, NWCO Coordinator, opened the workshop after his presentation on the sector development and financing gaps.
Elizabeth Were from Water.org made presentation on introduction to WaterCredit - Experience from Kenya, Uganda and India and after this Mr. Rahul Bist from M2i consultants presented the results of WaterCredit Market Assessment in Ethiopia. Other presentation was made by Arto Suominen on the findings and experience of the WASH/MFI workshop held on October 2012.
Issues such as a) how to create favorable enabling environment for MFIs to perform loans for WASH sector use, b) what kind of financial support should be organized to get the MFIs on board, c) what are the practical measures the sector should take in order to start working with MFIs, d) how to create demand for WASH credits and what methodology in creating the demand should be used, e) how to get Ethiopian Government on board in MFI use in WASH, f) do we need to create some kind of network to keep the stakeholders adequately and continuously informed on WASH/MFI development.
Other relevant issues such as dependency syndrome on development aid and grant projects, market driven demand for WASH products, attitudinal change on the belief that water is free, issue of loans versus grants at policy level, is WASH credit risky business, need of collaterals, credibility and legality of institutions, demand or no demand, interest rates, legitimacy, credit products needed for WASH, supply chain issues, WASH % from portfolio requirement, lack of suppliers and knowledge of available suppliers and products, information dissemination on credit products, financing mechanism for WASH credits, social business of MFIs, financial business of MFIs, linking social business to commercial business, market assessments at defined area by MFIs, organizing suitable and affordable credit products, size of the products, size of the loans, terms of the loans, loan disbursement modalities, group lending modalities, individual lending modalities, institutional lending modalities, production loans, consumption loans, reasonable profits, soft loans, subsidies, Credit Guarantee Fund, external collaterals, incentives, SACCOs, role and use of Health Extension Workers and WASHCOs, technology choice and technology quality, artisans, viable business, roles, responsibilities and mandates of different partners, willingness to pay, affordability to pay, technical support needed and provided, line of credit, etc….
- The major outcomes of the workshop were:
- Consensus on the need to establish Credit Guarantee Fund by the government and donors
- Provision of technical support by donors and NGOs need at all levels
- The MFI sector roles and use should be reflected in the revised water policy under review at the moment
- NWCO should lead this initiative. Other partners who should join in are: MWA and EWA from NGOs side, MoFED and FeMSEDA in addition to NWCO from GoE side, Association of Ethiopian Micro-Finance Institutions and Bussa Gonofa MFI from MFIs side, WSP-AF and USAID from development partners side, Water Supply Contractors Association and Tulip filters from private sector side and Water.org,, WASH Ethiopia Movement and COWASH as other important partners.
- The WASH-MFI development should be part and led by the WASH Technical Committee under the umbrella of the Water Sector Working Group
Presentations are found here: