Sidian Bank and Aqua For All launches Challenge Fund targeting Small Scale Water Service Providers (SSWPs)

L-R: Sidian Bank’s Nahashon Wamugi - Director of Credit Risk, Victor Waweru – Senior Officer Partnerships, Loise Mwangi – Head of Branches, John Patrick Kamau - Senior Manager Partnerships and Micro Banking and James Kibui – Sales Lead Retail and SME Banking.

The partnership between Aqua for All, Sidian Bank and the water services regulator aims to bridge financial gaps for the water service providers.

The fund will provide financing solutions that align with the revenue streams of small-scale water providers, this initiative will unlock the potential for growth, efficiency, and sustainability in the water sector. Ultimately, it will contribute to increasing access to clean and reliable water supply for the majority of Kenyan citizens, particularly those residing in peri-urban and rural areas.

With over 20,000 small, piped water operators and point sources in the Kenyan market, including 7,000 small community-based systems that primarily serve low-income populations, access to capital has been a persistent challenge for these operators. Limited funds have restricted their ability to improve infrastructure, expand their coverage, and provide reliable water services to communities in need. The revenue-based financing model offered by Sidian Bank through the Challenge Fund will empower these operators to access the financial resources they require to thrive and make a meaningful impact on water provision in Kenya.

Sidian Bank will roll out a new revenue-based financing model to provide financing for SSWPs based on cashflows. This means that the SSWPs will be able to pay back the loans using the revenue generated from their water services. This innovative approach tackles the lack of traditional collateral, which has been a significant obstacle in the water sector.

The bank will work with Aqua for All and its partners to assist 150 small scale water service providers to raise KES 330 million (€ 2.7 million) in commercial finance for micro and small water infrastructure investment projects. Endline users will benefit from safe, clean access to piped water, and betterment of sanitation and hygiene. The fund targets to reach 200,000 Kenyans.

Speaking at the launch of the fund the Sidian Bank CEO Chege Thumbi highlighted that “The partnership between Aqua for All and Sidian Bank has resulted in the creation of the Challenge Fund, specifically designed to enhance creditworthiness and attract investment finance for micro and small water infrastructure projects in Kenya. The Fund aims to expand and improve water services, thereby addressing the pressing issue of limited access to clean and reliable water supply for the
majority of the population residing in peri-urban and rural areas.”

“Sidian Bank and Aqua for All invite water entrepreneurs and micro and small water infrastructure projects in Kenya to participate in the Challenge Fund. Through this fund, operators will have the opportunity to access financing that will drive their business expansion, enhance their creditworthiness, and enable them to make a lasting impact on water services provision.

The Challenge Fund introduces a groundbreaking "revenue-based loan financing" solution, which is tailored to the unique needs of water entrepreneurs. Unlike traditional loans that require collateral, this innovative model enables small-scale water providers to repay the loans using the revenue generated from their water services. By focusing on cash flows rather than traditional collateral, this financing model eliminates a major barrier that has hindered the growth and development of the water sector in Kenya.” He added.

Sidian Bank is intentional about supporting the Government address the Sustainable Development Goal – 6 through the Sidian WASH Programme to ensure access of clean water and sanitation for all Kenyans.

About Sidian Bank:
Sidian Bank is a dynamic and customer-centric commercial bank in Kenya that provides innovative financial solutions to individuals and businesses. Sidian Bank is committed to supporting entrepreneurship and driving economic growth by offering tailored financing options and specialized services to various sectors, including the water sector.

About Aqua for All:
Aqua for All is a leading international NGO that strives to create inclusive water and sanitation ecosystems. By mobilizing finance, knowledge, and expertise, Aqua for All works towards achieving sustainable and scalable solutions to water and sanitation challenges around the world.

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