P2P: Catalysing WASH from Possible to Profitable

Catalysing Water Sanitation and Hygiene (WASH): From Possible to Profitable (P2P) is a five year project (2015 – 2019) funded by the Embassy of the Kingdom of the Netherlands (EKN) and jointly implemented by the SNV Netherlands Development Organisation and Fidelity Bank Ghana Limited.

With a € 4,000,000 revolving fund, P2P, is a project that seeks to improve access to finance and technical assistance for households/house owners and micro, small and medium enterprises (MSMEs) for WASH investments and services.

Why P2P?
The project stems from the fact that private sector players within Ghana’s WASH sector find it increasingly difficult to access finance for their business activities from traditional financial institutions including banks and non-bank financial institutions (NBFIs). This has resulted in weak linkages across the water and sanitation service and value chains.

A study conducted in 2014 revealed that there was a high need for finance by WASH MSMEs, however, due to the relatively high interest rates in Ghana and robust collateral requirements, only 53% of Ghanaian MSMEs surveyed were willing to source loans through existing commercial banks and micro-finance institutions.

Given the current constraints observed, P2P is expected to assist meaningfully in:

• Bridging the gap between the WASH demand and supply value chains

• Providing affordable on-lending loans to trigger financial institutions lending to WASH

• Providing opportunities for Microfinance Institutions to increase their WASH client base

• Providing relatively lower interest rates and collateral requirements for borrowers

• Building governance structures and improving technical knowledge of MSMEs

• Stimulating the financial services sector in Ghana to lend to the WASH sector and initiate similar socially-oriented lending schemes for WASH and other socio-economically inclined sectors.

Goal and objectives
The goal of P2P is to increase access to WASH services at the household level by scaling up access to finance and capacity development services by MSMEs.

Expected results
The project is expected to reach different categories of WASH beneficiaries as follows:

• 2,600 households receive loans to access WASH services in urban areas

• 200 Micro business will receive loans

• 350 Small businesses will receive loans

• 300 Medium businesses to receive loans

• At least 7 large businesses to receive loans

Geographic targeting
P2P is a nationwide project covering households, Small and Medium Enterprises (MSMEs) and Microfinance Institutions (MFIs) in rural, peri-urban and urban areas in all the ten (10) regions of Ghana.

Products and services
The project has developed three (3) key financial products to facilitate the provision of loans to targeted beneficiaries:

1. Dealer Financing Product –for household latrine construction

2. Asset Financing Product (Special project for schools and Health facilities)

3. General WASH Supply and Value chains financing for households and businesses

P2P’s unique approach
P2P is using a private sector development approach to maximise value for money in the WASH sector. The project is tailored to provide access to finance at both the household and MSME level through a revolving fund domiciled at Fidelity Bank. Fidelity Bank as a custodian and fund manager, on-lends to WASH SMEs and MFIs at an attractive interest rate. The MFIs serves as the financial intermediary between Fidelity Bank and the households. The project uses the MFIs are a conduit in reaching households with the WASH loans. P2P will also provide the technical assistance required by MSMEs to enable them to establish the technical structures required to be able to obtain loans from financial institutions and be able to adequately respond to the growing demand for WASH services by households.