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> Posted by Danielle Piskadlo, Senior Program Specialist, CFI
Biogas toilet made possible through WaterCredit
An estimated 2.6 billion people in the world lack access to basic sanitation. This reality is a root cause of much sickness and disease throughout the developing world. Like many things, water and sanitation problems disproportionately affect women and children. According to data from WHO/UNICEF, women globally spend an estimated 200 million hours each day collecting water, a child dies every 20 seconds from a water-related illness, and girls often do not attend school during menstruation, or drop out at puberty, due to the lack of clean and private sanitation facilities.
I had never thought much about how toilets might relate to microfinance but lately water, sanitation, and toilets seem to be all I read about.
I was vaguely aware of the efforts of WaterCredit.org to put microfinance tools to work in the water and sanitation sector by connecting MFIs with communities in need of clean water and toilets. I also knew a little bit about Peepoople, the makers of Peepoo, a personal, single-use, self-sanitizing, fully biodegradable toilet that after use, turns into fertilizer that can improve livelihoods and increase food security. This product is not only improving health and livelihood but has also created a series of work opportunities, both formal and informal. Read the rest of this entry »
> Posted by Danielle Piskadlo, Senior Program Specialist, CFI
The Investing in Inclusive Finance program at the Center for Financial Inclusion at Accion explores the practices of investors in inclusive finance. Across areas including risk, governance, stakeholder alignment, and fund management, this blog series highlights what’s being done to help the industry better utilize private capital to develop financial institutions that incorporate social aims.
In Chinese, the word “guanxi” translates literally to “relationships” but in reality it is a much more complex term that describes how business is often done in China. Guanxi also loosely means “networking” or “connections,” and is used to describe relationships that may result in the exchanges of favors that are beneficial for the parties involved. In a country rife with corruption, there is sometimes a very blurry line around the true meaning of guanxi.
Deborah Drake of the CFI’s Investing in Inclusive Finance team recently participated in a panel at the Harvard Social Enterprise Conference that examined the issue of corruption and ways of combating it. Among the solutions mentioned, perhaps surprisingly, was microfinance!
In China, as in many countries, one of the biggest obstacles to getting a micro-loan is preferential lending. Loan approval in China often has little to do with your credit-worthiness and everything to do with who you know or “guanxi,” sometimes involving a bribe. This has long been true at many of the locally owned and operated Rural Credit Cooperatives (RCCs) that dominate the micro-lending market in China. The survival of RCCs has been largely based on government regulatory protection, a lack of competition, and subsidized interest rates. Indonesia faced a similar situation decades ago with its government-owned Bank Rakyat Indonesia (BRI). But with the support of the Indonesian ministry of finance and central bank, BRI was turned into a microfinance bank operated on commercial terms. BRI became a microfinance pioneer and remains one of the largest microfinance institutions in the world.
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