H2O Investments

You mentioned that H2O Investments is a microfinance program. What is microfinance?

Microfinance is giving small loans to poor individuals who are stuck in a cycle of poverty. These small loans are used for any initiative that can help them enter into a better financial situation. The borrowers repay the loan slowly over time in small amounts, which makes repayment manageable for them.
Traditionally, banks do not lend to the poor because the poor typically have no collateral (i.e. something that the borrower can forfeit if he or she is unable to repay the loan) and banks believe the risk to lend to the poor is too great. However, people and institutions that fund microfinance know that the situation is different; the poor, in fact, are more likely compared to the wealthy to pay back their loan because they know that this credit is their only opportunity to create a better life for themselves. Moreover, they know they must be accountable and repay their loan in order to get a second or bigger loan next time to help fund activities or needs that improve the family’s situation. Find out more about microfinance on our website.

How do the families that receive a loan for the water and sanitation facilities afford to pay back the loan?

The loan is a small sum and can be paid back in even smaller instalments over long periods of time (e.g. 1.5 years).
Because the families now have facilities in their home, adults are now better able to hold employment and earn an income.
Before, women in the family would spend their day fetching water from rivers and ponds kilometers away, so were unable to spend their time on work that earned an income for the family.
Having proper water facilities also minimizes illness that the families experience due to drinking water contaminated with fecal matter or other harmful substances. Wage earners benefit from more stability – less days are lost to sickness, translating into more money earned. Medical costs and financial burden on the families are reduced, which means more money is available to pay for the families’ various expenses.

How do you ensure families repay the loan?

Our microfinance institution partners and local non-governmental organization partners work closely with borrowers, ensuring that borrowers can afford and find means to pay for the facilities. The families are provided support throughout the loan process.

Do borrowers ever default?

The microfinance institution that Water Well-ness Project (WWP) is partnering with has a repayment rate of 98-99% – this means that default on loans from borrowers is very rare.
Typically, in order to obtain a loan, individuals must form a small “Joint Liability Group” consisting of several people who are in a similar situation, socially and economically. Healthy peer pressure ensures that all members of the group repay their loans and the group can provide support to those who are having trouble.
The organizations we work with minimize risk by having money set aside for the rare event of default.

Who will be receiving these loans?

Our activities are currently centered in India. In the future, we will expand to other countries.
Close to 100% of loans are made to women.

What sort of facilities do you install?

Facilities include new water connections to houses, rain water harvesting units, toilets, water purifiers, wells, taps and tanks.
The facilities that are installed depend on the specific needs and conditions of each family or community. Several aspects are considered including what facilities are already in place, what terrain is the community situated on (relevant if implementing a well), or what facilities would the family most benefit from (e.g. a rainwater harvesting unit or a water pipe connection from a nearby well).

What is the size of the loans?

Loans vary in size based on what facility is being implemented, cost of the materials they are made of, labour required to implement the facilities, and complexity of the installation process. Typical loans range from Rs (Rupees) 5000 to Rs 20,000 ($100 – $400).

Do borrowers pay interest on their loan? What happens with that money?

Collecting interest for microfinance projects allows helping the disadvantaged to be sustainable. Our microfinance institution partners collect interest from borrowers at a rate between 12-24% on the diminishing loan principal. Money from interest is used by our microfinance institution partners for supporting expenses associated with the facility implementation process, to cover risk in the rare event of borrower default and to manage currency exchange risk when money is transferred internationally.
This structure ensures families internationally can continue to be offered loans for water and sanitation facilities.

If I make an investment, where will the money go?

100% of the money that has been invested by individuals will be lent to impoverished families and communities in India. Money collected through events and sale of products are used for the international projects and required administrative expenses. The team works strategically to minimize expenses and maximize the impact of all money received. From the beginnings of Water Well-ness Project, we have been committed to ensuring that all money collected is used in the way contributors intended – to improve the lives of the disadvantaged internationally. This is why 100% of the money invested is being lent to families in need.

If I make a contribution, can I get a tax receipt?

WWP is a registered not-for-profit organization, as opposed to a registered charity, so does not issue tax receipts for donations. Considering the nature of the programs we conduct (i.e. H2O Investments) and our movement towards predominantly accepting investments, we have chosen to remain as a non-profit organization at this time. Individuals who make an investment into our projects will receive their principal and return on investment at the end of their investment term, so tax receipts would not be needed.

How does WWP operate and what else does WWP do?

Currently, Water Well-ness Project operates using a team of highly passionate and devoted individuals who volunteer their time to carry out the organization’s activities.
WWP developed the concept of living a heart-based lifestyle and we promote this as a way to conserve and protect our fresh water resources. We are currently in the process of offering water-conscious products for purchase, with funds raised helping to sustain the organization’s operations.
Corporate and private sponsorship and grants are also sought to help support our operational needs.
These mentioned avenues promote sustainability of WWP and ensure that we can continue to improve the lives of impoverished international communities.