Sanitation microloans in the Philippines lead to proper hygiene and better health.

A Summary of the Article – Investing in Sustainable Change: Community-Led Lending for Sanitation Solutions

Adequate Access to Safe Sanitation

People in the world who have never lived in poverty have the benefit of resources that many others lack. One basic resource that many people have easy access to is safe and convenient sanitation services. These are people who are able to “flush and forget” about their waste, and do not worry about the unpleasant and even unsafe environment a lack of adequate sanitation can cause.

This blog post is a summary of the research article written by Barbara Tozier and Elene Cloete, which explains the methodology of community-led lending for sanitation solutions. They explore its impact, benefits, and challenges.


Despite global efforts to improve sanitation, 3.5 billion people lack access to safely managed sanitation solutions, according to the UN. Many must resort to using open-pit latrines, which pose significant health risks from water contamination and safety concerns, especially for women and girls. The high upfront cost of quality sanitation infrastructure remains a major barrier for households, leading to disproportionate spending on sanitation needs.

A clean and safe latrine is the result of sanitation microloans.

What Is Sanitation Microfinancing?

Sanitation microfinancing involves offering households small loans to finance sanitation solutions. Unlike subsidies, these loans require the loaner to pay them back. This encourages ownership and accountability of sanitation projects, and empowers individuals to learn, act, and gain confidence while they reach these development goals. An obstacle to these microloans is that they can come with limitations such as short repayment schedules. And funding often comes from non-local sources, leading to the risk of predatory lending practices.

A Local Solution: Community-Led Sanitation Microloans

Outreach International supported community-based organizations in the Philippines to address these issues. Participating communities subsidized a portion of the building costs and repaid the remainder of these loans over a five-year period, with interest. This approach empowered communities to administer these loans. The result was that people applying for loans felt they could trust their lenders because they were local, and payment schedules and interest could be fair, flexible, and sustainable.

New toilets make for cleaner surroundings in the Philippines.

Sanitation Microloans: The Numbers

  • 118 latrines constructed
  • Over 722 individuals served
  • 56% of expected repayment sum collected
  • Additional projects got funded, including household toilets and infrastructure improvements

Community Empowerment

The initiative has not only improved sanitation for these participating communities but also has empowered them economically. By reinvesting repayment and interest funds into additional microloans, communities have supported households and grown their assets from interest paid. This has stimulated economic growth and development, leading to greater prosperity and self-reliance for participating families.

Outreach International Fosters Community-Led Development

Community-led sanitation microfinancing offers a promising solution to address the global sanitation crisis. By empowering communities to take ownership of their sanitation needs, this approach promotes economic growth that is sustainable. While challenges remain, the success of this and other initiatives by Outreach International highlights the potential for transformative change through community-led action.

Get the Full Story

Read the full article about community-led sanitation microfinancing.