|
Ghana
|
|
The Promoter
The promoter is a registered limited liability company in Ghana. The company began its operation in January 2009 after receiving the Certificate of incorporation and was licensed by Bank of Ghana in November 2012 as a Tier II licensed institution to carry on lending and savings activities. The promoter is also an active member of the Ghana Association of Microfinance Companies.
The promoter is committed to assisting micro enterprises and SMEs by providing them with high quality technical and financial services to enable them start, grow and expand. It specializes in providing tailored short-term cash flow solutions to Small business operators and also mobilizes micro savings. The promoter’s clients are mostly the unbanked who are provided with the needed banking services like credit, savings, deposits and investments. They also offer training and business managing as well as financial management to its clients. Most of its Borrowers are women who are petty traders
The promoter is proposing to develop and market a WASH microfinance credit product called the WASH Credit Facility. The goal is to increase access to credit for the construction of household water and toilet as well as sanitation systems at the household level in Ghana. The promoter’s intend to deliver a three pronged strategy that includes:
The WASH project will be designed to maximise value for money and results. The project is tailored to provide access to finance at both the household and MSME level.
THE PROPOSED PROJECT
The WASH sector in Ghana faces numerous challenges due to the gap in services offered by the government. While the Ghana Water Company provides coverage for water provision in urban areas and the Community Water and Sanitation Agency provides for water in rural areas and peri urban/small towns, newly developed areas on the fringes of large cities are often neglected. Likewise, regular water shortages mean that many households rely on private delivery of water, either from tankers, household vending through polytanks or in the form of sachet water.
For sanitation, service level is considered very low from the government or parastatal with responsibility for sanitation. While opportunities are significant for the private sector, demand is often limited and linkages up and across the sanitation value chain are often broken or weak. The private sector in Ghana, and specifically MSMEs in the WASH sector, face a myriad of limitations and obstacles in particular, regarding access to finance.
The difficulty of MSMEs to participate effectively in the formal economy and derive inherent benefits such as accessing funding from the traditional banks can be attributed to the following:
Additionally, the promoter has found that high collateral requirements and high interest rates means that available credit is prohibitively expensive, undermining MSMEs ability to both access credit and be innovative or risk taking in their business models. The stimulation and support of household demand for WASH services is essential for the growth of the urban WASH sector, as well as for the ability of the private sector to respond adequately to household needs. Although household demand often exists, without affordable access to credit or capital to pay for services, the demand is often unrealized. Household WASH credit products are non-existent within the traditional banks and linkages between borrowers and MSMEs in the sector are not facilitated or supported by the financial sector. Households also face similarly high interest rates and collateral requirements, even for non-WASH specific loans.
This unrealized demand at the household level then stunts the ability of the private sector to grow, as the private sector is demand driven. Government and donor subsidy often also undermines the growth of the private sector, as household demand is satiated, at least in the short term. Without clear financial incentives to grow – as well as the technical ability to assess opportunities, facilitate segment organization, and work cooperatively with other actors on the sanitation chain – the private sector stagnates in a perpetual underdeveloped state. Opportunity exists; credit is the catalyst or spark that makes those opportunities evident and relevant to the private sector. It is in line with this that the promoters intend introducing the WASH Credit Facility to communal house dwellers and middle-income earners to construct toilet facilities and water systems to help reduce the water-borne diseases and restore human dignity to the people.
WHAT THE CREDIT WILL COVER:
PRODUCT FEATURES:
BENEFITS OF THE PRODUCT:
TARGET:
OUTPUT OF PROJECT
It is expected that by five years (2021), 200 homes with a minimum of 2,400 occupants would have benefitted from toilet facilities and with over 3,000 benefiting from access to portable water.
The promoter is a registered limited liability company in Ghana. The company began its operation in January 2009 after receiving the Certificate of incorporation and was licensed by Bank of Ghana in November 2012 as a Tier II licensed institution to carry on lending and savings activities. The promoter is also an active member of the Ghana Association of Microfinance Companies.
The promoter is committed to assisting micro enterprises and SMEs by providing them with high quality technical and financial services to enable them start, grow and expand. It specializes in providing tailored short-term cash flow solutions to Small business operators and also mobilizes micro savings. The promoter’s clients are mostly the unbanked who are provided with the needed banking services like credit, savings, deposits and investments. They also offer training and business managing as well as financial management to its clients. Most of its Borrowers are women who are petty traders
The promoter is proposing to develop and market a WASH microfinance credit product called the WASH Credit Facility. The goal is to increase access to credit for the construction of household water and toilet as well as sanitation systems at the household level in Ghana. The promoter’s intend to deliver a three pronged strategy that includes:
- The development of appropriate financing mechanisms for urban and peri-urban households and WASH SMEs;
- Granting credit at reduced interest rate to households who usually could not afford credit
- Coordination and collaboration with dealers to deliver quality services to clients.
The WASH project will be designed to maximise value for money and results. The project is tailored to provide access to finance at both the household and MSME level.
THE PROPOSED PROJECT
The WASH sector in Ghana faces numerous challenges due to the gap in services offered by the government. While the Ghana Water Company provides coverage for water provision in urban areas and the Community Water and Sanitation Agency provides for water in rural areas and peri urban/small towns, newly developed areas on the fringes of large cities are often neglected. Likewise, regular water shortages mean that many households rely on private delivery of water, either from tankers, household vending through polytanks or in the form of sachet water.
For sanitation, service level is considered very low from the government or parastatal with responsibility for sanitation. While opportunities are significant for the private sector, demand is often limited and linkages up and across the sanitation value chain are often broken or weak. The private sector in Ghana, and specifically MSMEs in the WASH sector, face a myriad of limitations and obstacles in particular, regarding access to finance.
The difficulty of MSMEs to participate effectively in the formal economy and derive inherent benefits such as accessing funding from the traditional banks can be attributed to the following:
- The non-availability of timely finance by those who need them, as a result of difficulty in meeting the borrowing criteria of financial institutions.
- The failure of Government’s interventions such as the Venture Capital Trust etc.
- The failure of the traditional banks to design and offer products strong enough to mitigate the risk inherent in lending to this group of borrowers
- The existence of larger lower risk borrower competing for the same resources as MSMEs.
Additionally, the promoter has found that high collateral requirements and high interest rates means that available credit is prohibitively expensive, undermining MSMEs ability to both access credit and be innovative or risk taking in their business models. The stimulation and support of household demand for WASH services is essential for the growth of the urban WASH sector, as well as for the ability of the private sector to respond adequately to household needs. Although household demand often exists, without affordable access to credit or capital to pay for services, the demand is often unrealized. Household WASH credit products are non-existent within the traditional banks and linkages between borrowers and MSMEs in the sector are not facilitated or supported by the financial sector. Households also face similarly high interest rates and collateral requirements, even for non-WASH specific loans.
This unrealized demand at the household level then stunts the ability of the private sector to grow, as the private sector is demand driven. Government and donor subsidy often also undermines the growth of the private sector, as household demand is satiated, at least in the short term. Without clear financial incentives to grow – as well as the technical ability to assess opportunities, facilitate segment organization, and work cooperatively with other actors on the sanitation chain – the private sector stagnates in a perpetual underdeveloped state. Opportunity exists; credit is the catalyst or spark that makes those opportunities evident and relevant to the private sector. It is in line with this that the promoters intend introducing the WASH Credit Facility to communal house dwellers and middle-income earners to construct toilet facilities and water systems to help reduce the water-borne diseases and restore human dignity to the people.
WHAT THE CREDIT WILL COVER:
- Construction of Household toilet facilities
- Provision of household portable water facilities and systems
- Construction of household drainage systems
- Provision of bio-gas systems
- Financing SMEs and dealers of water and plumbing materials
- Financing Waste Management SMEs
PRODUCT FEATURES:
- Individuals and SMEs as targets
- Interest rate at 20% per annum
- A maximum 36 months loan duration
- House as collateral
- Processing fee of 4%
- Loan size USD 2,500
BENEFITS OF THE PRODUCT:
- Reduced open defecation
- Reduced water-borne diseases
- School kids would not have to walk miles to get water before going to school. This will put the girl and the boy child in school
- Hygienic environment
- The product in addition to providing access to credit for the construction of toilets and water facilities will also create jobs for the artisans. This will help build their expertise and also create
- Wealth for them.
TARGET:
- Compound houses without toilet facilities
- Compound houses without water
- Public sector workers
- Schools
- Churches
- Homes
OUTPUT OF PROJECT
It is expected that by five years (2021), 200 homes with a minimum of 2,400 occupants would have benefitted from toilet facilities and with over 3,000 benefiting from access to portable water.