Investment Funds for Water and Sanitation: Y/N?

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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?

Impact investments are focused on increasing productivity. Although research has been done to measure the productivity effect of water and sanitation investments, the results are not taken seriously. It seems to be easier to understand a cow, producing milk increases income. A toilet does not give milk.

If you visit slums world wide, you will notice water and sanitation is a business. Water vendors, water kiosks, van pullers delivering water at the doorsteps, toilet blocks, etcetera, are comon phenomenon in highly densed populated areas. In reality, people earn money out of water and sanitation businesses, so the question should be framed differntly. Who finances these businesses, and why are these businesses not financed by impact investors?

Coming weeks I will try to answer this question. MWF is advising one of its clients how to set up a water and sanitation fund. We do support these initiatives as we strongly believe increasing access to water and sanitation is important, and public and donor money will never be sufficient to cope with the current situation. We also believe, financing businesses and projects is not only the domain of donors.

Tell us what you think what might work: mwf@microwaterfacility.org

 


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Investment Funds for Water and Sanitation: Y/N?

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?

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