Guardian MFI: Providing consumer finance for better water and sanitation
“There is huge demand across the country for clean sanitation products”, explains Paul Sathianathan, CEO of GUARDIAN, “yet, finance is a major obstacle. Most households prioritise their expenses towards necessities such as healthcare, communication and education, with water and sanitation coming up right at the end.At GUARDIAN, we have discovered that with the right combination of cost-affordable toilet designs and effective financial assistance, families are more than willing to adopt toilets in their households.”
GUARDIAN extends credit to poor urban and rural households (after extensive interactions on the ground to estimate their repayment capacity)for the construction or renovation of toilets, plumbing installations, construction of rainwater harvesting and other water recharge structures and installation of biogas plants.
An acute issue in sanitation is that the trigger towards positive hygiene and health practices is felt most by women yet the decisionon making all purchases is taken by men. GUARDIAN addresses this by providing loans tomarried women between 18 and 60 through Joint Liability Groups (JLGs)of 5 members each that GUARDIAN and its partner Gramalaya help to form among individuals interested in the taking up sanitation loans. The tenure of all loan products is a uniform 18 months with an annually reducing interest rate of 21%, a 1% loan processing fee and INR 100 insurance fee for a 2-year period, which is low compared to any standard MFI.
“Rs 600-900 every month is not a major amount and it can easily be repaid by saving Rs 30 per day,” says Paul Sathianathan of how GUARDIAN ensures a repayment rate of over 97%. The client base of Guardian has grown at 7.4% CAGR during the last 7 years.