Ready to invest! Joining forces with Yunus Social Business to launch Take-a-Stake

Teaming up

This month, Yunus Social Business Funds gGmbH has joined forces with WASTE to address the need for more investments in the WASH and waste sectors. By combining both sector expertise and funding capabilities, we will work together in the preparation works to set up the “Take a Stake Fund” with a geographic focus on Uganda, Kenya, and India. Yunus Social Business works to ‘harness the power of business to end poverty, growing and supporting social businesses to solve the world’s pressing problems.’ This cooperation is a stepping-stone for the future creation of the fund and will test key assumptions, build funding cases, and attract follow-on funders.

WASTE started Take-a-Stake to address a piece of this problem, with the mission to strengthen the development of a sustainable supply chain of the WASH, waste management and re use businesses and sectors linked to the circular economy.

 

The funding gap is huge

The WASH sector faces a considerable funding gap. The total investment gap is estimated in US$2.5 trillion by 2030[1].More than 4.5 billion people still lack access to adequate water, sanitation and hygiene (WASH) services. Furthermore, already vulnerable communities are hit harder by climate change. Almost half of the world’s population is affected by water scarcity. Without intervention, this number is expected to escalate to two thirds of the global population by 2025, with massive social, political, and economic repercussions.Only to meet Targets 6.1[2] and 6.2[3] of the Sustainable Development Goals will require tripling capital investments to US$ 114 billion per year, not including operating and maintenance costs. However, most countries still report insufficient financing to meet national WASH targets[4]. To close this funding gap, private capital must be mobilized.

 

 

The ‘missing middle’

How? The Take-A-Stake Fund is being set up to address financial and capacity building needs of viable and scalable small and growing businesses (SGBs). Quality and sustainable WASH and waste services are best delivered by SGBs. Why? We see they have:

  1. Agile and low-cost management.
  2. On-the-ground presence, which means better customer service, practical and locally minded.
  3. The ability to address small and local markets that are otherwise unattractive for large companies.
  4. The ability to generate innovative de-centralized solutions.

Additionally SGBs have a strong potential for growth – and thus for creating economic, social and environmental benefits. SGBs are a crucial backbone for regional economic growth and employment.

However, despite their important role, SGBs lack access to finance, since they are too large for microfinance institutions (MFIs) and too small for institutional investors and banks. SGBs are the missing middle—stuck between micro-enterprises and larger businesses. By investing in these SGBs the Take a Stake Fund aims to address this gap and strengthen local economies.

[1] Organization for Economic Co-operation and Development (OECD)

[2] Achieve universal and equitable access to safe and affordable drinking water for all

[3] Achieve access to adequate and equitable sanitation and hygiene for all

[4] UN-Water Global Analysis and Assessment of Sanitation and Drinking Water, GLAAS report 2017.