Sustainable Financing Models for Water Supply and Sanitation: Insights from an Evaluation

This evaluation assesses the overall management of water supply and sanitation (WSS) portfolios of financial institution (FI) partners under’s WaterCredit initiative, identifying their impact on the community, success factors and challenges for sustained lending in the sector.


Substantial strides have been made globally in the last few decades towards the Sustainable Development Goal (SDG) 6 of universal access to affordable, safe drinking water and sanitation. However, challenges remain due to factors like climate change, financial priorities, and infrastructural issues. Innovative financing, particularly microcredit solutions related to water, sanitation, and hygiene, can offer a sustainable and scalable approach to addressing the water and sanitation challenges that persist around the world.

LEAD collaborated with to conduct a comprehensive sustainability assessment of FI partners under the organisation’s flagship WaterCredit initiative in India. The project sought to understand how FI partners are managing their water supply and sanitation (WSS) portfolios and the impact of WSS lending on the community. The assessment also sought to understand the success factors and challenges experienced by FI partners to further WSS lending after graduation and the support required by the partners to sustain lending efforts in this sector.

The primary objectives of the study were: 

  • To understand the current status of the FI partners in terms of their WASH portfolio, their impact on the community, their knowledge and awareness of WASH financing and WSS products, their capacity to train new staff members on WASH and their overall financial health.
  • To ascertain the success factors (what worked) for the FI partners to sustain the WSS portfolio (with respect to WSS portfolio, expansion to other locations, linearity/increase in loans disbursed, capital mobilised, and people reached).
  • To understand the challenges faced (with solutions) and lessons learned by FI partners to sustain their WSS portfolio.
  • To determine the factors essential for graduating a partner from the mature stage, ensuring their sustainability without any technical/financial support.
  • To determine the support required by the FI partners from and how can engage with partners. 
  • To assess if the FI partners also practice/support climate resilience, SDG 6 and ESG through WASH lending.


The study employed a mixed-method design involving quantitative and qualitative methods for data analysis. The graduated partners who participated in the study included the Bullock Cart Workers Development Association (BWDA), Credit Access Grameen, Annapurna, Adhikar, and Sanghamithra, covering the states of Madhya Pradesh, Orissa, Tamil Nadu, and Karnataka.

Key Findings 

The assessment revealed a unanimous commitment to continue WSS lending, bolstered by support from the leadership team. Partners cited both financial and non-financial reasons for their continued involvement in WSS lending, which aligns with the broader social missions of their institutions. However, a divergence emerges in sustainability between larger, more profitable FI partners and those operating on a smaller scale. Larger entities find WSS lending in line with their overall business strategy, allocating appropriate capital to these initiatives. On the other hand, smaller entities, while committed to WSS goals, face challenges in maintaining these lending activities.

Thematic Area

Institutions and Society

Project Leads

Sujatha Srinivasan


Madhya Pradesh, Orissa, Tamil Nadu, Karnataka