Outline: Brief of Ga West’s 5-year Compound Sanitation Strategy HFC Boafo’s micro-finance loan products Findings from sanitation financing interviews

Ga West’s 5-Year Compound Sanitation strategy Key principles The PLAN to get toilet to every compound Harness the Intentions of a progressive MA EHSD: Champions of igniting demand Catapulting the private sector into a pole position Monitor, Learn and Adapt

1.Collaborative and aggressive marketing campaign 2.Create a customer and business-friendly environment 3.Engaging sanitation providers 4.Mobilizing private finance Relevant Delivery Principles Catapulting the Private Sector into Pole Position

HFC BOAFO MICRO-FINANCE LOAN PRODUCTS 5 Loan Products Available: 1.Multiple landlords (ABUSUA)Up to GHC 30,000 to be granted 2.Singe landlord (EFIEWURA) Up to GHC 30,000 to be granted 3.Landlord + tenants (Nkabom)Up to GHC 50,000 to be granted 4.Adjoining houses (OMAMA)Up to GHC 20,000 to be granted per house 5.Sanitation providers (WASAB)Up to GHC 50,000 to be granted NB. o Source of funds for loanHFC Boafo’s own funds o Interest rate 3% per month o Repayment period4 to 36 months

Key results of sanitation financing interviews conducted by PATH – 8 Interviews: Microfinance Institutions (MFIs) (2) Banks (2) Government (1) o Greater Accra Metropolitan Area (GAMA) Sanitation and Water Project (World Bank funded) NGOs (2) o YSEF, Slum Dwellers International Clean Team (1) Goal: Gain understanding of role, operations, potential involvement of finance organizations in Ghana.

Ghana: Macroeconomic instability and credit contraction “Approved loan clients are down 25% in the last three months” - MFI Financing requirement of the government is effectively vacuuming credit and liquidity out of the private sector. o Inflation: non-food rate 23%. o Government of Ghana 180-day Treasury bonds yield 26%. All banks/MFIs noted three strategic initiatives: o Reduce loans. o Buy Treasury bonds. o Increase deposits. “Loan recoveries are a problem. We are buying government bonds” - Bank

$1bn International Monetary Fund rescue loan tied to a structural adjustment program. o Stabilization to be a painful multi-year process through at least Credit is very expensive: o Commercial loans >30% o MFIs 40%-60% Overall effect: Private-sector financing is restricted. Ghana: Macroeconomic instability and credit contraction

Reliance on concessionary international capital o Possible to Profitable (P2P) project  Dutch Ministry of Foreign Affairs, SNV, and Fidelity Bank  €2M grant (project administration), €4M revolving fund; target households and 500+ MSMEs o Opportunity International (UK) and Sinapi Aba  Department for International Development, Opportunity International, and Sinapi Aba MFI-cum-bank  Pending funding, broadly similar to SNV-Fidelity Bank project o GAMA Sanitation and Water Project  World Bank and municipal government of Accra  $34/150M for sanitation, 5-year grant project; target 50,000 HH toilets Major sanitation finance projects in Ghana 100% grant funded Revolving loan demonstration project could pave new approach Near-term opportunities with World Bank project

Key Takeaways o Severe credit contraction eliminates most financing options. o Notable Sanitation Financing pilots in Ghana depend on grant capital. o Low-hanging fruit opportunity with World Bank project in Accra. o Challenging access to low-cost capital for MFIs: Identify and connect with social ventures/donors to provide seed capital for revolving funds Lower cost capital = lower interest rates charged while remaining profitable to MFI partner. Lower interest rates = greater loan ‘affordability’ and potential beneficiary reach.

There are opportunities to: o partner with well-capitalized Sanitation Financing projects such as SNV-Fidelity to extend and enhance their impact; and o collaborate with World Bank GAMA PCU project in Accra.

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