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New Loan Scheme to improve Household Sanitation

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ACCRA, Ghana, December 19, 2018/ — Today, the Environmental Sanitation and Health Directorate under the Ministry of Sanitation and Water Resources, UNICEF and the Embassy of the Kingdom of the Netherlands have launched an innovative and affordable loan scheme for people living in urban areas to build their own household toilet. The new Sanitation Fund – of which Apex Bank is the contracted Funds Manager for 2019 – is established to address the challenges of basic sanitation in urban communities. 

There are approximately four million households in Ghana who do not have a toilet for exclusive use by their family.  While access to basic sanitation has increased from 21% to 25% in urban areas, statistics have proven that it is the poorest who are more likely to practice open defecation.  The establishment of this new loan initiative will provide many households in urban communities the opportunity to build their own toilet. 

The loans for household toilets –  which are being offered with an operational fee of 12 per cent and with less demanding lending criteria than other loans products – have the potential to change the landscape of urban sanitation for thousands of families. The rate of 12 per cent is much more favourable in comparison to average bank loan fees which can range from between 26 and 40 per cent, and often require two salaried creditors and other prohibitive criteria.  Such conditions make it restrictive and unobtainable for many sectors of society to access their own household toilet. 

“In our search for practical scalable solutions to our sanitation challenges, a revolving fund presents one of the best options, but without repayment of loans this potential immediately drops. We need those who access the loans to be responsible, but we also need to make sure our Assemblies are engaging with households to remind them of this responsibility and that participating banks are playing their part,” said Cecilia Abena Dapaah, Minister for Sanitation and Water Resources. 

Through a mass application process over the past two weeks involving Environmental Health Officers and Rural Banks, a total of 457 loans have been approved for households and 15 loans approved for business. These loans will be released to beneficiaries in three Metropolitan, Municipal and District Assemblies (MMDAs) to mark today’s launch. 

“Access to finance is necessary in the sanitation sub sector, to give access to sanitation service delivery and stir up entrepreneurship in the sanitation business. It is the sustainable way of reaching our SDG 6 target,” said Ron Strikker, the Netherlands Ambassador to Ghana. 

The Sanitation Fund is currently being rolled out in three major Assembly areas across Ghana: Ashaiman, Ho and Tamale. UNICEF is also building the capacity of Rural Community Banks (RCB) and Metropolitan, Municipal and District Assemblies to ensure the smooth implementation of the sanitation fund.  The Fund Manager, APEX Bank, has established the fund by selecting and scoping the Rural Community Banks. They will then receive and disburse funds quarterly to the rural community banks which will in turn disburse loans to businesses and households. The Rural Community Banks will also be responsible for loan recovery and refunds. 

“The ARB Apex Bank would like to confidently assure our partners that the funds will be strictly applied for the key purpose, that is the provision of loans to households and businesses for the construction of toilets and related sanitation facilities in the beneficiary communities” said Kojo Mattah, Managing Director of ARB Apex Bank. “To ensure the sustainability of the Fund, the Efficiency Monitoring Unit (EMU) of the ARB Apex Bank has deployed a three-cycle value-for-money monitoring regime for the project.” 

Currently, suppliers can construct five facilities per week. Ghana would therefore need approximately 1,400 small scale businesses working at maximum capacity between now and 2030 to reach the SDG target of universal basic sanitation. This additional financial support will make this task much more realistic. 

“UNICEF is committed to continue working with the Government of Ghana, Development Partners and other actors to make Ghana a much cleaner country, where families can enjoy a dignified life, where children can grow up in a safe and healthy environment, and where no one is left behind” said Anne-Claire Dufay, UNICEF Representative in Ghana. Distributed by APO Group on behalf of UNICEF Ghana.

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