The path to achieving the Sustainable Development Goals (SDGs) presents a unique opportunity for innovation, particularly in SDG6—clean water and sanitation for all. While progress has been slow, this challenge opens doors for transformative solutions that pair innovative thinking with sustainable financing.
The UN Sustainable Development Report 2024 underscores the critical need for innovative financial mechanisms and well-designed investment programmes to drive progress toward the SDGs, particularly in the world’s poorest countries. In the WASH sector, these approaches are essential for unlocking the potential of small and growing businesses (SGBs). By leveraging impact investment strategies and innovative financing, we can transform challenges into opportunities for sustainable and impactful change. Our impact investment initiative, Take-a-Stake (TAS), for instance, exemplifies how such financial initiatives can catalyse growth and scalability for WASH enterprises in developing markets.
Putting small and growing businesses in the picture
Small and growing businesses (SGBs) are a vital subset of small and medium enterprises (SMEs). In the WASH sector, SMEs are critical drivers of economic development, employing a significant percentage of the population—often up to 60% in some developing countries. These enterprises play a crucial role in reaching underserved, rural areas where larger companies may not operate.
In the Global South, SGBs in the WASH sector are uniquely positioned to drive progress toward the SDGs. They are agile, have a deep understanding of local markets, and can innovate at a scale that larger companies often find unfeasible. However, these businesses frequently fall into the ‘missing middle’—too big for microfinance but too small for traditional bank loans. This is a significant gap in the investment landscape, but it also represents a tremendous opportunity as SGBs deliver quality, sustainable services and create innovative, decentralised solutions that can transform communities.
Businesses which TAS puts at the forefront of its approach as it strives towards a world everyone has access to sustainable WASH and waste services connected in a circular economy. Businesses like Banka Bio, who is exemplifying the impact that SGBs can have. Since 2012, Banka Bio has built and installed over 10,000 bio-toilet units across the country, partnering with state governments, private organisations, CSR foundations, and public sector units such as Indian Railways.
Scaling for impact
The journey to investment for businesses like Banka Bio is challenging, but the potential rewards are immense.
“SMEs are always struggling to raise debt and being in the water and sanitation sector where the returns are slower it is more difficult for the SMEs to wait for long.” – Namita Banka, BankaBio Founder
This is where innovative financing and technical assistance come into play. To accelerate the journey from pilot to scale, we need to break down barriers and ensure more sustainable financing is channeled to SGBs.
Through the funds leveraged and support provided through TAS, BankaBio is now scaling its business. BankaBio has set up an asset platform Megalitre Varuna private limited, where it incurs upfront capital expenditure for setting up water treatment plants in housing societies and commercial complexes and receive revenue through monthly or quarterly payments from residents.
A world with secure and sustainable access to WASH services for all requires mobilising diverse yet interdependent stakeholders. The impact of initiatives like TAS is already evident—connecting investors with WASH businesses, proving their investment case, and mitigating perceived risks. But no one wants to be the first mover in uncharted territory. That’s why TAS is stepping up to lay the groundwork, demonstrating that these investments are not just viable but essential for achieving SDG6.
As we continue to build this momentum, we invite others to join us. Now is the time to chip in, to invest in the missing middle, and to support the innovative businesses that are shaping the future of WASH.
The path forward
To truly unlock the potential of these businesses, we must also focus on the enabling environment—ensuring that SGBs can navigate imperfect ecosystems and increase their visibility among investors. This means not only providing capital but also building capacity, offering incentives, and sharing the successes that can inspire further investment.
The future of WASH depends on the choices we make today. By collaborating, investing, and innovating, we can create a world where clean water and sanitation are accessible to all.
Join us as we delve further into the challenges, insights and strategies involved in setting up an Impact Investment Fund for WASH in developing markets at this year’s SIWI World Water Week. You will have the chance to hear experiences from the different stakeholders involved, including Namita Banka (BankaBio). Find out more here.
