Selling water instead of giving it away for free. The Rain 4 Sales project pilots the business case for Rain Water Harvesting. Instead of donating a 50,000 liter tank to a community, this projects actually sells the equipment to entrepreneurs, financed by a 5 year loan. The project started in 2016 and 4 entrepreneurs were selected from 28 applicants. At the end of 2016 two entrepreneurs will be in business, the other two will follow in the first quarter of 2017. The proof of the pudding is in the redemption of loans which will take place in 2017 and onward.
The installation will be constructed by URWA but the entrepreneur will provide the unskilled labour and also the locally available materials like water, stones, and eucalyptus poles.
After signing the delivery agreement, the entrepreneur will own the installation. By selling the water to the local community (UGX 300-600 / 20 liters), the busiess starts generating cash needed to pay off the loan. The average size of loans is about UGX 9 million and the entrepreneur will pay 15% in cash upfront.
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 »