The COVID-19 outbreak led to an increased demand for safe water due to frequent handwashing and people staying at home. But water and sanitation micro, small, and medium enterprises (MSMEs) are struggling to survive, as they face revenue loss and increased costs to cater for the higher demand. This situation puts access to safe water for 48-million Kenyans served by utilities and private MSMEs in peri urban and rural areas at risk.
Our survey of a group of Kenyan water and sanitation enterprises in April 2020 revealed that these MSMEs urgently need capital for expanding waterworks and repairing infrastructure to ensure water supply. Some MSMEs need capital to make the transition to renewable energy sources, which will reduce consumers’ water bills in the future.
“The demand for water has increased significantly, but not the ability to pay for it”, explained a representative of a community water project in Kisumu County.
In general, Kenyan water and sanitation MSMEs have difficulties in accessing finance, as financial institutions are reluctant to offer them credit because of the high risks associated with the sector.
Innovative financial solutions for water and sanitation MSMEs
Aqua for All and Sidian Bank, formerly K-rep Bank, have partnered to establish an innovative financing facility, the COVID-19 WASH Loan Facility, to continue financing the capital needs of water and sanitation MSMEs in Kenya. The survival and growth of water and sanitation MSMEs are critical to support the Kenyan government’s emergency response to the COVID-19 pandemic and to protect vulnerable groups.
“The current crisis urges immediate action. Water and sanitation MSMEs must continue operating and expanding their reach to safeguard access to essential services for millions of Kenyans during the COVID-19 crisis. Especially for people on low incomes, paving the way to build the sector’s resilience in the future is crucial”, said Ms Josien Sluijs, Aqua for All’s Managing Director.
This partnership also aims at mobilising additional capital, which is aligned with Aqua for All’s efforts to bridge the financial gap to scale up water and sanitation enterprises and contribute to achieving SDG 6: Clean water and sanitation for all.