Gathering the evidence on

Updated on February 7, 2023

Today, one in ten people around the world lacks access to safe water, and one in four people lacks access to a toilet. Since 2004 we have supported financial institutions in developing household water supply and sanitation portfolios, making capital available for households to invest in their own solutions. As of December 2022, we have reached 52 million people with safe water and sanitation through 11.6 million water and sanitation loans, amounting to $4.1 billion in capital mobilized.

We have focused on affordable finance because we see it as a key solution to solving the water crisis in our lifetimes. As we have done so, we have gathered evidence – to understand successes and failures, to inform and scale safe water and sanitation solutions, and to see the impacts. Gathering decades of internal data from our borrower and partner surveys, live data portal, impact evaluations and other research, together with a much larger body of external literature, has allowed us to analyze the evidence base underlying everything we seek to achieve.

Through this analysis, we can be sure of some important facts:

  • Our WaterCredit solution is contributing to reducing and bridging the financing gap of affordable and safe access to water.
  • It is reaching low-income households, and it contributes to increasing their resilience to the impacts of climate change.
  • Households’ investments in water and sanitation are reducing stress and improving safety and wellbeing.
  • These programs provide substantial economic value and boost household finances through several clear pathways, the most significant being time gains.

Much more detail is presented below under five crucial themes, which represent how water and sanitation connect with other key areas of sustainable development. We believe water is the best investment the world can make to pursue goals in all of these areas at once, and we have the evidence. The following pages also highlight the next steps to further our understanding and action in areas such as health outcomes, the determinants of financial inclusion, and what makes improved water supply and sanitation a force of empowerment for women and girls.

What we found: Strong evidence Emerging evidence Mixed evidence Limited evidence
Strong evidence Emerging evidence Mixed evidence Limited evidence

Household finances

Do improved water supply and sanitation break cycles of poverty?

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INTERNAL
EVIDENCE		EXTERNAL
EVIDENCE
Income gains Improvements boost household finances through direct (selling water) or secondary (using water) income gains
Emerging evidence Strong evidence
Time gains Improvements boost household finances through time gains, resulting in increased productivity
Strong evidence Strong evidence
Direct cost savings Improvements lead to direct cost savings by costing less than old sources
Emerging evidence Emerging evidence
Indirect cost savings Improvements lead to indirect cost savings, such as lower healthcare costs and less time spent caring for ill household members
Emerging evidence Strong evidence
Financial inclusion Water supply and sanitation microfinance leads to greater financial inclusion
Limited evidence Limited evidence

WaterCredit as an Accelerator

By leveraging additional financing and supporting the construction of more sustainable facilities, does WaterCredit accelerate progress towards universal access to improved water and sanitation?

INTERNAL
EVIDENCE		EXTERNAL
EVIDENCE
Scaling access Continue to develop and scale water supply and sanitation portfolios
Strong evidence N/A
Faster-growing access Access to improved water supply and sanitation increases faster through WaterCredit than alternative approaches, by addressing financing as a bottleneck to progress
Mixed evidence Emerging evidence
Sustainable access WaterCredit leads to more sustainable access to improved water supply and sanitation by enabling high-quality construction and future improvements and repairs
Emerging evidence Mixed evidence
Freed-up public funds WaterCredit allows more low-income households to achieve their own improvements, freeing up limited public funds to support the most vulnerable
Limited evidence Emerging evidence
Household influencers Households who use WaterCredit subsequently influence other members of the community to invest in improved water supply and sanitation
Limited evidence Limited evidence
Enabling environment WaterCredit strengthens the enabling environment for financial institutions lending to households for water supply and sanitation
Emerging evidence N/A

Climate change

Are WaterCredit-financed improvements more resilient to climate shocks and stresses? And do they contribute to healthier environments and reduce climatic changes?

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INTERNAL
EVIDENCE		EXTERNAL
EVIDENCE
Resilience Improved water supply and sanitation are more resilient to climate change impacts
Emerging evidence Strong evidence
Multiple sources Access to multiple water and sanitation sources reduces household vulnerability to climate change impacts
Limited evidence Emerging evidence
Strengthened actors Households, service providers and governments all play roles in building the resilience of water supply and sanitation to climate change impacts
Limited evidence Emerging evidence
Lower emissions and environmental impact Improved water supply and sanitation generate lower greenhouse gas emissions and less harm to the local environment
Mixed evidence Mixed evidence

Health and safety

Do improved water supply and sanitation lead to better health (including mental health), safety and wellbeing?

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INTERNAL
EVIDENCE		EXTERNAL
EVIDENCE
Health benefits Improvements lead to direct health benefits for individual households
Mixed evidence Mixed evidence
Safety benefits Improvements lead to direct safety benefits for individual households
Strong evidence Strong evidence
Reduced stress and increased wellbeing Improvements lead to reduced stress and increased wellbeing
Mixed evidence Emerging evidence

Women’s empowerment and equity

Does involvement in WaterCredit empower women with authority and opportunity? And do improved water and sanitation empower women and girls with health, safety, dignity and time?

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INTERNAL
EVIDENCE		EXTERNAL
EVIDENCE
Participation in WaterCredit Women are taking on WaterCredit loans for improved water supply and sanitation
Strong evidence N/A
Decision-making authority Improvements lead to increased decision-making authority for women
Mixed evidence Mixed evidence
Time gains Improvements lead to time gains for women and girls
Strong evidence Strong evidence
Financial inclusion WaterCredit enables other financial opportunities for women through credit history
Limited evidence N/A
Income opportunities Improvements lead to greater income opportunities for women
Mixed evidence Mixed evidence
School attendance Improvements lead to increased school attendance for girls
Mixed evidence Mixed evidence
Health benefits Improvements benefit the health of women and girls
Mixed evidence Strong evidence
Safety and dignity benefits Improvements benefit the safety and dignity of women and girls
Emerging evidence Strong evidence

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