The upfront cost for building toilets with septic tanks and connecting to water utility services is unaffordable for many low-income Indonesian families—deterring them from building and benefiting from the facilities.
To tackle this challenge, USAID IUWASH Tangguh collaborates with the Indonesian Ministry of Finance and financial institutions to formulate alternative financing schemes, including microfinancing, to help low-income families access better water and sanitation facilities.
On January 25th, 2023, USAID’s flagship climate-resilient water and sanitation activity USAID IUWASH Tangguh signed a partnership with the state-owned multi-purpose home financing agency PT Sarana Multi Griya Finansial (PT SMF), a state-owned enterprise focusing on secondary financing for housing. The partnership agreement will enable the USAID activity to support PT SMF in engaging microfinance institutions to disburse water and sanitation microfinance products within the project’s 38 focus areas.
USAID IUWASH Tangguh and PT SMF will start piloting the program in the districts of Sragen and Bogor. An estimated at least 500 households will benefit from improved access to piped water connections through installment loans, making it more affordable for those who cannot pay cash.
Director of Securitization and Financing, PT SMF, Mr. Heliantopo, elaborated “The MoU between SMF and USAID IUWASH Tangguh reemphasizes our mission to implement our four main pillars including access to water and sanitation through the delivery of affordable loans on housing.”
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