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"We have helped draft Ethiopia’s WASH financing policy with Ministry."

"We were able to convince the government to include private sector involvement in the WASH sector within Ethiopia’s national plans and financing policies. We are proud to say that private sector financing is now firmly part of Ethiopia’s WASH policy framework because of our efforts."

Salfiso Kitabo is the Director of Growth and Innovation for FINISH Mondial Foundation (FMF) in Ethiopia. With over 27 years of experience in Ethiopia’s water and sanitation sector, he has been at the forefront of shifting the country’s WASH landscape from charity-driven interventions to sustainable, market-based financing. Salfiso has played a key role in embedding private sector engagement into Ethiopia’s national WASH policies, integrating sanitation loans into the portfolios of banks and MFIs, and advising government ministries on systemic reforms. His work has made FINISH Mondial a recognized yet unsung hero in driving policy change and enabling long-term solutions for sanitation financing.

What was the sanitation financing landscape like in Ethiopia before the involvement of FINISH Mondial (FM)?

Ethiopia has a unique history compared to other African countries. For 119 years, Ethiopia had what was essentially an open defecation policy. In fact, a proclamation from 1898 (Ethiopian calendar) by King Menelik explicitly referred to punishing those who defecated in the open and then spread disease. Despite this, today, safely managed sanitation is below 7% of the population.

The reason is not lack of awareness. It is because the sector was seen as the responsibility of government and charities. Water, land, and sewerage systems have always been under government control, leaving little room for private sector or household-driven solutions. When I first started talking about sanitation financing with Water.org, people laughed. But with FINISH Mondial’s entry, the shift is visible—moving from dependence on charity to market-based financing.

How are small and medium enterprises (SMEs) now participating in sanitation?

Thanks to FINISH Mondial and WASTE, sanitation is slowly becoming bankable. Six businesses and cooperative unions—traditionally focused on agriculture—are now investing in toilets and clean environments. For Ethiopia, the real achievement is not the numbers but the attitudinal change: moving away from a charity mindset towards recognizing sanitation as a viable market.

What kind of capacity building is needed for private sector involvement?

The first priority is to show that sanitation is bankable. It is not about awareness of sanitation, but awareness that it is a business opportunity. The second is access to loanable funds. Liquidity in Ethiopia is limited, and banks usually classify sanitation loans as “consumption” rather than productive. Our work is to demonstrate demand, link households to financing, and make sanitation visible in financial portfolios.

What financing models has FINISH Mondial introduced in Ethiopia?

FINISH Mondial successfully introduced the Diamond Model of WASTE. This links households directly to MFIs and businesses for sanitation loans while also encouraging out-of-pocket investment. Today, sanitation lending is part of the conversation in Ethiopia’s financial system—something unthinkable five years ago.

How are financial institutions being engaged?

Ethiopia has 32 commercial banks and 61 MFIs, but traditionally none prioritized sanitation. Through FINISH Mondial’s advocacy, at least eight MFIs and two banks have added WASH lending to their portfolios. The challenge now is not lack of willingness from banks but lack of partners to connect households and farmers to these loans.

Have innovative financing tools like results-based financing or blended finance been introduced?

We have started discussions on results-based financing, thanks to training from FINISH Mondial’s India team. Blended finance and PPPs are talked about, but so far, the practical implementation is minimal. This is the next frontier.

Have households’ attitudes towards sanitation investment shifted?

Yes. Before FINISH Mondial, annual reporting showed only 145 toilets built by households themselves. By 2024, that figure rose to 5,167. In Ethiopia, where government controls land and sewerage, convincing an individual to pay for their own toilet is a mountain to climb. For us, every single toilet financed by households represents a systemic breakthrough.

How has FINISH Mondial worked with government to enable private sector engagement?

FINISH Mondial’s Diamond Model convinced the Ministry of Health to intervene directly. The Minister herself wrote to cement companies to supply SMEs with cement at subsidized rates, resulting in more than 6,000 quintals being distributed. The government has also facilitated land access for SMEs.

Most importantly, FM has worked hand in hand with government, knowing that in Ethiopia, government sets the rules. This has laid the foundation for policy changes that embed private sector roles in sanitation.

What new policies or frameworks have emerged as a result of FINISH Mondial’s work?

This is one of the biggest achievements. With FINISH Mondial and WASTE’s support:

1. Private sector involvement was included in the National WASH Plan for the first time.

2. FINISH Mondial contributed to the drafting of the WASH sector financing policy led by the Ministry of Health, which now explicitly mentions banks and MFIs as key actors in sanitation financing—something no government policy had done before.

3. FINISH Mondial is part of the WASH Financing Core Working Group that advises the Ethiopian government on systemic reforms.

These policy inclusions are groundbreaking. Now, government ministries call on FINISH Mondial to advise them, and even large NGOs are adopting models pioneered by FINISH.

What were the biggest challenges in mobilizing private sector WASH financing?

1. Policy gaps – WASH was not prioritized in national or banking policies. For example, the National Bank mandates loans for agriculture inputs but not for sanitation.

2. Liquidity constraints – Ethiopia’s banking system relies heavily on individual savings, making sanitation loans scarce.

3. Perception – Sanitation was not seen as bankable.

Despite these, FINISH Mondial convinced institutions like VisionFund (a large private MFI) to establish a dedicated water and sanitation lending department.

What message do you want to share with other countries working on WASH financing?

Lack of sanitation is not about awareness—it is about financing and opportunity. In Ethiopia, there are only 7 million people with clean toilets, but 75 million mobile phones. The challenge is not convincing people of sanitation’s importance but making the sector bankable.

My message is simple: “No health means no life.” Sanitation underdevelopment kills. The private sector should recognize this as both a business and a social responsibility. The era of donation-driven toilets is over. Loans, market-based approaches, and systemic reforms must lead.

By 2030, safely managed sanitation must be achieved. We have only a few years left. If FINISH Mondial’s Ethiopia experience shows anything, it is that policy change at the top unlocks transformation at the bottom.