Overview of financial instruments used in India and Kenya | Financing sanitation series #1

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Sanitation as catalyst for development

Why this focus on financing sanitation, you wonder? As Guy Hutton and Arthur Wood have summarised in their UNESCAP 2012 report called “Development financing for tangible results: a paradigm shift to impact investing and outcome models”.

Sanitation offers several significant, but largely unexploited, advantages to provide a testing ground for new and innovative development models. It is linked to many other development issues such as health, environment, education, gender, disability, tourism and economic growth. The potential business opportunities in sanitation are significant. The entry of the private sector into the sanitation space is one of the current significant but unexploited investment opportunities that are gaining momentum.

Financing sanitation paper series

The Financing Sanitation Paper Series is a unique collection of six articles about different aspects of sustainable financing of sanitation (in emerging markets) – from financial inclusion to private funding and from micro insurance to climate financing.

You will find that many of the themes we write about are new in the context of sanitation financing. We are not only talking about sanitation financing but have taken a broader scope of financial inclusion. The idea of not having a toilet is perhaps as outlandish to many as the idea of not having a bank account or not being insured or not having any arrangements at all for old age, or more in general not being able to access financial services. Yet for many people having no toilet and being financially excluded are the reality. Financial inclusion can be facilitated by Governments, but as a rule it is left to market forces. Sanitation having a direct impact on public health has a much stronger Government influence, but does sanitation assets need to paid fully by Governments or donors? I do not think so. After all when people pay for something themselves they tend to appreciate it more than when it is a gift, yet there are some people who are too poor to pay. Dealing with this diversity is what financial inclusion is all about.

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