8.3 Case study: financing water filters in Asia
Market research in Cambodia and India indicated that while there was demand for household water treatment devices, access to these products was often limited by consumers’ inability to pay for them in one lump sum. In addition, while many lending institutions are active in both countries, these lenders historically have not been comfortable making loans to consumers for household items. To address this, PATH teamed up with two filter manufacturers, Hydrologic in Cambodia and Hindustan Unilever (HUL) in India, and worked with local microfinance institutions (MFIs) to create a consumer water filter loan program.
Under this program, Hydrologic and HUL salespeople accompany loan officers to regular meetings of joint borrowers, where they educate participants on the need to treat water and offer filters for sale on installment. Households that wish to purchase are then able to do so through a loan from the MFI, paying for the filter over several months.
To date, results have been promising in both countries. In Cambodia, Hydrologic’s sales more than quadrupled in the pilot area, while its MFI partner, VisionFund, is now enthusiastically adding filter financing to its lending mix and looking for ways to scale up the program. In India, HUL is committed to expanding its filter financing program with support from MFIs such as Ujjivan and Spandana, in spite of what is otherwise currently a challenging environment for MFIs in the country. HUL is also actively exploring an expansion of this program into several African countries.