Assessing the impact of ADA’s activities on vulnerable households

ADA has released its first impact report, presenting findings from analyses conducted between 2022 and 2024 to measure how effectively its programmes improve the living conditions of vulnerable people and to identify areas for improvement.  Households with insufficient access to basic services are one of the analysed groups of vulnerable people.

A large share of the world’s population still lacks access to essential services such as electricity, clean water and safe sanitation. This not only affects daily living conditions but also people’s ability to pursue economic opportunities and improve their well-being. Inclusive finance can help fill this gap by making high-quality, basic services more affordable for vulnerable households, even where public infrastructure or investment is limited.

The evolution of ADA’s approach

ADA’s early efforts focused on helping microfinance institutions develop loan products that enable households to purchase items such as solar equipment or sanitation facilities. While this met some individual needs, the approach remained limited in scale and did not fully address the structural challenges that prevent widespread access to basic services. In response, ADA has broadened its strategy to strengthen entire local value chains for the supply of water and energy.

Nowadays, ADA supports private providers of local basic services, such as operators of mini solar grids or private water suppliers, helping them expand sustainably through tailored financial and non-financial support. At the same time, ADA assists the end users of these services - households using the services for domestic purposes but also for micro and small businesses - by combining entrepreneurial support and appropriate financing with awareness-raising on sustainable practices. This integrated approach helps stimulate demand for basic services while contributing to broader community development.

Lessons learned and outlook

The impact report identifies the following lessons learned from ADA’s programmes that address the needs of vulnerable households:

• The complex mix of multiple private actors, the varying involvement of public institutions as well as specific local dynamics in water and energy systems make it challenging to understand local contexts. Effective interventions therefore require a detailed ecosystem analyses before implementation.
• Supporting local economic systems that expand access to basic services makes sense where public provision is limited. However, interventions must be aligned with public policies and planned infrastructure projects to ensure long-term viability.
• From suppliers to end users, all actors in the value chain need support. This includes tailored finance and technical assistance for providers and combined financial and entrepreneurial solutions for households that run small businesses.
• Microfinance institutions still lack familiarity with the water and energy sectors, but pilot projects help build mutual understanding and encourage the joint development of tailored financial products.
• Early evidence shows strong potential to improve living conditions and environmental protection, but real impact depends on the quality and long-term viability of services. Lasting technical assistance and holistic business support for private suppliers is therefore essential.

Further information can be found in the impact report, which also analyses water access project in Cambodia as well as projects for improving access to energy-efficient or solar-powered equipment in Bangladesh and Senegal in detail. 

Image

Further information on how ADA facilitates access to basic services