Blog Action Day 2010 & room to dream, room to play
You all have probably heard me talk about water, the water crisis, and Water.org a good deal by now. For Blog Action Day, I’ve been trying to think of what I could say that you haven’t heard, what you would find interesting, what you didn’t know, what interesting information I take for granted because I breathe it every day.
But honestly the thing that has been most on my mind the past several months actually doesn’t limit itself to water. I can’t stop thinking: what room do we have create new paradigms [to borrow my friend Josh’s favorite word] when it comes to addressing poverty, problems in our world; how do we dream up something different, look at it with some imagination? Am I capable of this? Is everything worth doing already been done and thought of? Who else is thinking like this, talking about it?
A few examples come to mind. When I was a junior in college, I learned about microfinance and microcredit and got really excited. It still a fairly new concept that began in Bangladesh the late 70s/early 80s by Muhammad Yunus, a Bangladeshi banker and professor of economics [now a Nobel Peace Prize recipient]. The microfinance model facilitates small loans [usually $20-$100USD] to those living in poverty that have no access to a bank or any form of credit [something I definitely took for granted that is just a part of life for us here]. Initially, banks didn’t want to take risks on the poor because they were skeptical about their ability to repay the loan. But the cool thing is repayment rates were and have remained close to 100% [way better than we have here in the States! Does this surprise you?], which is why commercial banks are now getting involved in this booming enterprise. It sparked definitely more attention and controversy this year especially.
But this concept of microfinance was one of the main reasons I was drawn to Water.org after college in 2008. It is the first water and sanitation [watsan] organization to bring microfinance to the watsan sector via its WaterCredit Initiative. Since WaterCredit pilot programs in 2003, it has been proven to successful [“that it’s almost scary”, to use the words of Matt Damon in this video] and continued to grow exponentially, in large part due to our largest grant to date for this work from the PepsiCo Foundation for $4 million. This past year it warranted the hiring of a WaterCredit director, as well as a WaterCredit officer in India. Needless to say, it’s been an exciting and key part of Water.org to watch and learn about.
Here are some of the quick facts about WaterCredit that I continue to find fascinating:
• Demographics: Approximately 90% of all borrowers are women.
• WaterCredit beneficiaries: More than 158,000 people have benefited from WaterCredit.
• Number of loans: 12,000 loans to borrowers.
• Disbursed loans: Borrowers have taken $2.5 million in WaterCredit loans.
• Loan repayment: 96%.
• Average loan size: For households, the typical loan size is USD$130.
• Average cost for a water connection: USD$110.
• Average cost for a home latrine: USD$125.
• Interest rates: Interest rates (including service fees) for borrowers range from 10-24%. This is less than the rate for a typical micro-finance loan.
• Interest rates borrowers would otherwise be forced to pay to loan sharks: 125%.
• Repayment periods: Between 12 and 24 months.
• Total investment: Water.org has invested $2.2 million in WaterCredit programs.
• Implementing partners: 11, all located in Asia and Africa.
• Commercial capital stimulated: $4.2 million in capital from commercial banks.
• Where WaterCredit is offered: Bangladesh, India, and Kenya. The pilot projects for WaterCredit began in 2003 in the urban slums of Dhaka, Bangladesh, and then in rural Tamil Nadu in southern India in 2004. In 2005, the WaterCredit Initiative was expanded to Kenya, where the focus has been on community-level loans for wells and infrastructure. In 2009, WaterCredit was expanded into East Africa.
Over the past two years I have learned more about microfinance and social entrepreneurship through the unfolding of a new social impact sector. Most of these conversations [at least that I have seen or participated in] have been led and sparked by the players such as Skoll Foundation and their Skoll Awards for Social Entreprenuership [founded by Jeff Skoll, the founder of eBay; Water.org Co-Founder Gary White received this prestigious award last year for the WaterCredit Initiative], the SoCap conference [the largest interdisciplinary gathering of individuals and institutions at the intersection of money and meaning], Social Edge [a blog By Social Entrepreneurs, For Social Entrepreneurs], the trailblazing organizations of Kiva and the Acumen Fund, as well as Water.org and some of its board members, to name a few. [If you know of more I’ve missed, I’d love for you to share so I can watch/follow as well.]
These concepts, this new landscape and their emerging conversations are only the beginning, a scratch on the surface, revealing how powerful entrepreneurship can be across all sectors and areas of life. I am convinced this kind of creativity is what our world is most hungry for. I’m not naturally a very business-minded person, but thinking about the potential and possibilities that exists is something that motivates me. I like that it’s about the questions and trying to approach problems from a different angle. And I think this should give us not only hope, but room to continue to play with imaginative ways to help the world’s poorest and make our world a little better. Dream with me?
If you have 8 min to spare, I love this video that shows WaterCredit at work in India.