…328 enterprises trained as programme targets barriers to credit and business growth
The Development Bank of Nigeria (DBN) is providing N24 million in grants to 24 top-performing sanitation and hygiene businesses, as 11 financial institutions develop financing products to expand access to credit for micro, small and medium-sized enterprises (MSMEs) in the sector.
The grants, worth up to N1 million per enterprise, are part of a capacity-building programme implemented by DBN in partnership with the Sanitation and Hygiene Fund (SHF) to strengthen sanitation businesses and improve their readiness to access commercial financing.
MaryEsther Ezeadi, head of credit operations at DBN, disclosed this at an event organised by LoftyInc Allied Partners Limited on Thursday in Abuja to showcase progress under the programme.
She said the grants would support business expansion, asset acquisition, adoption of digital tools and technology, and improvements in service delivery, rather than personal expenditure.
“The purpose of the grants is not to fund personal expenditure or acquire additional property. They are intended to support business improvements, including expansion, asset acquisition, digital tools, technology adoption and service delivery,” Ezeadi said.
She explained that the programme was designed to address challenges on both sides of the credit market, particularly the limited capacity of sanitation enterprises to meet lenders’ requirements and the inadequate understanding of the sector among financial institutions.
“We recognise that sustainable access to finance requires stronger enterprises, capable financial institutions and an enabling ecosystem. This means addressing both demand and supply,” she said.
According to Ezeadi, more than 11 institutions have developed sanitation financing products, creating additional channels through which businesses can seek funding.
She added that some programme participants had also been selected for a more targeted accelerator programme to help them improve their operations and prepare for further growth.
Femi Oluwagbemi, growth partner at LoftyInc Allied Partners Limited, said the programme had confirmed the potential of sanitation financing but identified gaps in enterprise readiness and lenders’ understanding of the sector as barriers to unlocking investment.
He said the programme received more than 1,000 applications, with 313 enterprises confirmed for participation, while more than 30 businesses were matched with lenders for financing discussions.
An endline survey showed that 97 per cent of participants had applied lessons from the programme to their businesses, while 65 per cent said they had applied them significantly. Eighty-one per cent of participants considered the programme highly relevant to their businesses.
Oluwagbemi said the initiative focused on helping businesses improve financial records, understand credit requirements, strengthen business models and demonstrate their capacity to repay loans.
On the lenders’ side, participating institutions were supported to design water, sanitation and hygiene (WASH) loan products, assess their readiness to serve sanitation enterprises and establish plans for taking the products to market.
The programme also facilitated direct engagements between businesses and financial institutions to help both parties better understand financing requirements and the commercial realities of sanitation services.
Oluwagbemi said the intervention was necessary because many sanitation businesses had customers and revenue but remained unable to secure loans due to weak financial documentation, limited business management capacity and inadequate credit readiness.
He cited an estimated $10 billion annual financing requirement for water, sanitation and hygiene by 2030, against investment of just 0.32 per cent of Nigeria’s gross domestic product, compared with a stated requirement of 1.3 per cent.
He also said about 40 million Nigerians still practised open defecation, underscoring the need to expand sanitation services through sustainable business models rather than relying solely on public funding and charitable interventions.
Sanitation businesses struggle to access credit
Chukwuma Nnanna, executive director of Toilet PRIDE, a Nigerian social enterprise, said access to finance had remained a major constraint to expanding sanitation services and helping small toilet businesses remain operational.
He said the organisation had worked with partners for seven years to build market-based approaches that could help more families access sustainable sanitation facilities, while supporting local businesses that supply toilet products and services.
However, he said many small sanitation businesses continued to face difficulties accessing loans from commercial banks and microfinance institutions, alongside gaps in technical capacity, marketing, business modelling and demand generation.
“We can’t get money from banks, commercial banks or MFIs. It’s difficult,” Nnanna said.
He said the programme helped bridge the gap between sanitation enterprises and lenders by enabling businesses to understand what financial institutions require before committing funds.
“The one-on-one match-up we had with MFIs allowed us to see things differently. We got to a point where we began to understand that for an MFI, for an investor to put money on the table to release their money, we must make strong cases. We must make a business case,” he said.
Nnanna added that Toilet PRIDE had supported more than 100 small sanitation businesses, but expanding the model required better access to products, finance and business development support.
He said the organisation hoped to use the lessons from the programme to strengthen its operations and reach more communities, particularly families unable to afford adequate sanitation facilities.
A representative of the Sanitation and Hygiene Fund said the organisation was pleased with the progress made under the first phase of the programme and was working towards a second phase to build on the gains.
The representative said the initiative demonstrated that sanitation could support viable businesses while addressing a major public health challenge in Nigeria.
The SHF representative also stressed that government alone could not provide the sanitation infrastructure required across the country, making private-sector participation and access to finance critical to expanding services.
“The government cannot do it alone. Only the private sector can do it together with the government,” the representative said.
The programme, titled From Diagnostics to Bankable Enterprises, sought to improve the capacity of sanitation businesses and participating financial institutions to build a functioning market for sanitation finance.
Its next phase is expected to provide more customised support to selected businesses, helping them address gaps in credit readiness, formalisation, financial management and business operations.
The initiative aims to establish stronger links between sanitation enterprises and lenders, allowing businesses to expand services while helping more Nigerian households gain access to improved sanitation.
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