In Kenya, approximately 37% of the population[1] lacks reliable and affordable access to safe drinking water. This is particularly severe in rural areas and urban slums, where many people do not have or cannot get a connection to piped water infrastructure. As a result, many of them opt for fetching water from unprotected springs and wells.
Since 2009, Aqua Clara Kenya (ACK) has addressed this challenge by providing household and community water filters (hubs) at affordable prices, targeting primarily low-income customers. Around 65% of ACK’s customers are families living on less than USD$5.50 a day, as well as schools with distribution hubs serving between 700 and 1,000 pupils. These groups are often overlooked as they are not perceived as financially viable customers.
To expand its reach, ACK raised capital to develop a new water filter with a modern design, aimed at attracting a broader range of customers, including those from higher-income groups who are willing to pay more for improved aesthetics.
However, ACK recognised that this shift in customer segment could introduce the risk of a ‘mission drift’ – the pressure to prioritise higher-margin customers, potentially compromising their core mission.
Keeping impact at the core
In 2023, ACK signed a Social Impact Incentive (SIINC) with Aqua for All to support its scaling. The SIINC transaction will reward ACK for keeping its commitment to low-income customers and expand in areas where its products can have the most impact. To unlock the incentives, ACK must meet three specific metrics:
- Keep on increasing its sales to low-income customers.
- Install new hubs in areas where access to household and community water filters is likely to have the greatest impact.
- Ensure customers are maintaining their water filters on a weekly basis to guarantee the best drinking water quality possible.
“For me, Impact-Linked Finance is a great reminder of what your mission really is.
It lays the foundation to stay true to your impact goals and provides you with incentives to pursue them”
– John Nyagwencha, Co-founder and CEO of Aqua Clara Kenya
The transaction period has a term of three years, with impact verifications conducted every 12 months. More details of the SIINC transaction can be found in this snapshot.
The SIINC premium will help mitigate the risk of mission drift and strengthen ACK’s impact record, encouraging the enterprise to keep prioritising vulnerable and hard-to-reach families and communities.
Read the full interview with John Nyagwencha.
[1] https://www.sdg6data.org/en/country-or-area/Kenya