The RAIN Foundation implements a big Rain Water Harvesting Program in Nepal. The last 3 years RAIN piloted the usage of Micro Finance products to finance the implementation of RWH household systems and RWH ponds. Now, RAIM wants to scale up the program reaching out to 20.000 farmers.
The current pilot is still on a small scale and only finances a small part of the investments made. So far all loans have been repaid without any default, this is of course a good result however, the question is how the ideal blend of grants and commercial finance will work out.
Getting good data on income and cost of living is a real challenge, however the local team in Nepal managed to interview 47 farmers, retrieving valuable data. MWF analyses the data and sets up a financial model calculating the ecxess cash flow on house hold level, in other words: how much money is available to pay-off loans?
In our vision, commercial finance especially micro finance will play an increasingly important role in financing water solutions at household level. Especially affordable rain water harvesting investment are very suitable to finance with relatively small loans. One of the threats however is the (unfair) competition with donor driven programs.
Social impact investing is on the rim to become main streamed, this will take another 3-5 years, but the trend is clear: more and more high net worth individuals prefer to invest instead of donate, taking a more business wise approach. Investing in Micro Finance Institutions (MFI) is a clear example impact investing pays off, from a financial point of view. However the social and environmental impact of commercial operating MFIs' is not a given fact of their business. Most of these institutes realize they have to improve, so why don't MFIs' invest in water and sanitation?More »