Dear all,

Thank you for your contributions so far to our Thematic Discussion on "Urban Sanitation Finance - From Macro to Micro Level".

During the last couple of days we have discussed the issue of public finance both with regard to the national level as well as local taxation. These discussions are ongoing and I encourage you to share your experiences or ask the experts questions if you haven't done so yet.

At the same time, we will be launching the discussion on our second theme - Microfinance - tomorrow with an opening post by Sophie Trémolet (Director of Trémolet Consulting) and Goufrane Mansour (Consultant at Tremolét Consulting).

For this discussion, the two experts have asked me to point your attention to two additional readings:

- "Evaluating the Potential of Microfinance for Sanitation in India" (May 2013)
tremolet.com/publications/evaluating-pot...nce-sanitation-india

This study seeks to document existing experiences in providing microfinance services to households to allow them to invest in sanitation solutions. Its objective is to map out the existing provision of microfinance for sanitation, identify where opportunities for future market development lie and identify how the development of such a market could be fostered (through the targeted use of public funds or regulatory changes for example).

- "Small Scale Finance for Water and Sanitation" (April 2012)
tremolet.com/publications/small-scale-fi...water-and-sanitation

This report identifies ways in which governments and donors can increase access to finance for small scale WATSAN providers, by channelling public funding to support market development and leveraging private sector financing. It examines the extent to which micro and mesofinance is currently used in the sector (especially in India, Tanzania, Kenya or Vietnam), what benefits their use bring and how the role of these financing tools could be developed with (or without) external support.

Enjoy the read and join our conversation on "Microfinance" here !

Best,
Katrin

Dear Rainer,

Thank you for your contributions to the first part of our discussion!

We will open new discussion threads for each individual theme. Catarina kicked off Theme I with her opening post on Tuesday (and to which Idun sent you the link).

We'll have another post from our expert Guy Norman on "Public Finance at local level" tomorrow within the same theme and next Tuesday Sophie Trémolet and Goufrane Mansour will publish the opening post for Theme II: Microfinance here .

Looking forward to hearing your thoughts on the other topics!

Kind regards,
Katrin

Hi there!

You can find the introduction and discussion on the first topic, Public Finance, here .

Hope that helps!

Best wishes

Dear Katrin, thanks for this really overdue initiative. For my understanding, do we just post here contributions and/or questions as replies to the topic to you and you compile them? or with relevance to the themes during the period the theme is on to the relevant moderator? i.e.
• Theme I - Public Finance (23 June – 2 July)Catarina and Guy
• Theme II – Microfinance (30 June – 10 July)Sophie and Goufrane
• Theme III - City level sustainable cost recovery (9 July – 16 July)Antoinette and Kumi.

I am very interested in all topics, since we are currently coming into a phase of of PPP funding with our SOLWEZI (Zambia) Sanitation Task Force.

Kindly advise. With best regards

Dear all,

To help stimulate discussion and provide helpful background information on the topics of our discussions, the experts on sanitation finance have suggested the following preparatory readings for each theme:

Theme 1 – Public Finance:

(1) Norman G, Fonseca C & Trémolet S (2015): “Domestic public finance for WASH: what, why, how?” (www.publicfinanceforwash.com/resources/finance-brief-1)

This reading, just two pages in length, provides a brief summary of the WASH initiative. It addresses the following four questions: What exactly is domestic public finance? Why invest in water and sanitation? Why is domestic public finance necessary for universal WASH coverage? How can progress be achieved?

(2) Norman G & Trémolet S (2015): “Municipal finance for sanitation in African cities”
(www.publicfinanceforwash.com/resources/finance-brief-3)

Stating that municipal budget allocations for sanitation are typically very low, this two-page brief summarizes recent data on the topic for four African municipalities (Temeke, Ga West, Nakuru, Maputo). It concludes that the current picture is not encouraging. While in Temeke, Maputo and Ga West the per-capita allocation for sanitation is very low, in Maputo transparent accounts of sanitation spending are not published.

(3) Evans, B., van der Voorden, C., Peal, A. (2009): “Public Funding for Sanitation: The many faces of sanitation subsidies” (www.susana.org/en/resources/library/details/2010)

This is a longer, more in-depth reading that pulls together recent thinking and knowledge on sanitation financing, focusing particularly on the topic of sanitation subsidies. It serves as a valuable introductory reading to the topic as it outlines the global debate on subsidies and sanitation financing, provides guidance on how to select the most appropriate funding arrangements in different situations and also clarifies the terminology and language used in the debate about public financing of sanitation and subsidies in particular.

Theme 2 – Microfinance:

(1) Trémolet, S. & Mansour, G. (2015): “Embedding Access to Finance into Sanitation Programmes: a Step-by-Step Approach”
(tremolet.com/publications/embedding-acce...s-step-step-approach)

This report aims to develop a strategy for embedding microfinance into the sanitation programmes of WaterAid and other similar NGOs. It provides a quick introduction to the topic of sanitation microfinance, explaining why it is important to consider how access to finance can be facilitated as part of a sanitation programme and how this can be done by international NGOs such as WaterAid, based on a step-by-step approach.

(2) Trémolet, S., Mansour, G., Muruka, G. (2015): “Developing microfinance for sanitation in Tanzania”
(tremolet.com/publications/developing-mic...-sanitation-tanzania)

Over the last five years, SHARE (Sanitation and Hygiene Applied Research for Equity) supported a research initiative on sanitation microfinance. The findings presented in this report are the result of a one-year action-research conducted in Tanzania from December 2013 to January 2015 which constitutes the third phase of the research initiative supported by SHARE. Based on the observation from the SHARE research that microfinance is rarely used for sanitation, the action-research in Tanzania sought to address the following questions through “learning by doing”: (a) Are financial institutions (FIs) interested in sanitation? What type of assistance do they need in order to make the leap? (b) In instances where FIs are providing loans, how are these helping to increase access to improved sanitation?

(3) Trémolet, S. & Mansour, G.. “Toilets on Credit” (Video)
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This video provides footage from the action-research conducted in Tanzania by Trémolet Consulting. It asks whether lending money for toilet construction, which has proven successful in some countries like India for example, can also work elsewhere. Can microfinance pave the way for families to invest in a toilet and sanitation businesses to grow? Are microfinance businesses willing to extend their services to poorer families as well and what effects do such loans have on the income of these families? Are loans taken out to invest in sanitation income-enhancing or do they actually make these families poorer?

Theme 3 – City level sustainable cost recovery:

(1) Abeysuriya, K., Kome, A., Willetts, J., Chong, J. (2014): “Financing Sanitation for Cities and Towns - Learning Paper” (www.susana.org/en/resources/library/details/2185)

Summarizing key literature on financing for the water service sector that seeks to achieve the MDGs and the SDGs as well as presenting key insights from a discussion on ‘financing for urban sanitation investment’, this paper focuses on access to the upfront finance and other ‘lumpy’ finance needs, both for initial investment and for rehabilitation/replacement as physical systems approach their end of life. Doing so, the publication starts out by outlining foundational concepts and principles for sanitation financing, introduces the topic of repayable finance, presents the main sources of repayable finance available and their relevance for financing sanitation before discussing a number of innovative schemes for accessing repayable finance, illustrated by case studies.

We hope that these readings give you a good sense of our discussion topics, inspire your own thinking and further enrich our conversation.

Looking forward to your thoughts and opinions on the matter!

Kind regards,
Katrin