Sidian Bank has advanced a loan to 368 small water utility companies in Kenya to improve water supply in the fight against COVID-19. The WASH Loan Facility has been established by Sidian Bank and Aqua for All in 2020.

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Water kiosk Spring Valley in Kenya
One of the many water kiosks in Kenya that uses the extra financing to meet the increasing water demand. (photo: Aqua for All)
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Water kiosk Spring Valley in Kenya
One of the many water kiosks in Kenya that uses the extra financing to meet the increasing water demand. (photo: Aqua for All)

Creditworthy and reliable enterprises

The COVID-19 WASH Loan Facility has disbursed an amount of over 2.94 million euro in loans to primarily micro and small entrepreneurs. The 368 small water utility companies each received an average loan of 5,814 euro. In terms of social performance, Sidian Bank estimates that these small enterprises reach about 3.1 million people in 21 counties, especially in Nairobi, Isiolo, Kirinyaga and Machakos. In these Kenyan counties, there are many water enterprises, such as water kiosks, providing clean water to households. 

The good performance of the COVID-19 WASH Loan Facility’s portfolio shows that water and sanitation entrepreneurs are creditworthy and reliable customers even in the midst of a crisis. Only three enterprises were unable to repay their loans due to their dependency on subsectors that have experienced slow activity due to COVID-19 restrictions. 

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Sidian Bank and Aqua for all started a COVID-19 WASH Loan Facility in 2020
Aqua for All and Sidian Bank launched the COVID-19 WASH Loan Facility in 2020. (photo: Sidian Bank)
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Sidian Bank and Aqua for all started a COVID-19 WASH Loan Facility in 2020
Aqua for All and Sidian Bank launched the COVID-19 WASH Loan Facility in 2020. (photo: Sidian Bank)

Increasing water demand

James is one of the 368 entrepreneurs who have benefitted from the COVID-19 WASH Loan Facility. In the middle of the COVID-19 pandemic he needed additional capital to expand his water business in Mombasa, Kenya. 

Due to the increasing demand for safe water, he had to transfer his purification plant and drill a borehole. While many local financiers limited loans to enterprises and individuals at a time when COVID-19 destabilised the economy, James borrowed KES 700,000 (5,435 euro) from Sidian Bank Mombasa to boost his water bottling and vending business. 

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Entrepreneur James who runs a water business in Mombasa, Kenya
Entrepreneur James in Mombasa used the loan facility to expand his water business. (photo: Aqua for All)
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Entrepreneur James who runs a water business in Mombasa, Kenya
Entrepreneur James in Mombasa used the loan facility to expand his water business. (photo: Aqua for All)

Market-based water services

According to Joshua Kibet, WASH Finance Advisor Kenya at Aqua for All, the entrepreneurs are in need of additional credit facilities to secure essential services for communities contributing to the prevention of COVID-19 transmission. 'Above all, the COVID-19 WASH Loan Facility unlocks the vast potential of market-based water and sanitation solutions that were unknown in the past', Kibet adds.

Besides small enterprises, the COVID-19 WASH Loan Facility has also provided loans to a national and a regional microfinance institution (MFI) operating countrywide and in the coastal region, respectively. Their customers consist of small holder farmers and rural micro-entrepreneurs who borrow loan tickets for water pumps storage/draining facilities for water harvesting.

This news item is based on content originally published on the websites of Sidian Bank and Aqua for All.