Risky waters: Household debts for financialised inclusion

Abstract

This paper critically examines the financialisation of water access in the global South through household indebtedness. It introduces the concept of ‘de-risking by the poor’ to describe how financial risks are transferred from water providers and investors to low-income households under the guise of inclusive development. Drawing on three case studies—WaterCredit microfinance in South Asia, post-payment water connections in Morocco, and debt-collecting prepaid meters in Colombia—the paper shows how water inclusion is increasingly mediated by debt-based arrangements that protect providers from financial and political risks in the interest of full cost recovery. These arrangements function through three key modalities of risk-shifting: tranching (segmenting users and services by risk and cost), conditionalisation (making water access contingent on debt servicing), and responsibilisation (imposing behavioural expectations on users). Unlike traditional blended finance models, this form of de-risking by risk-shifting to the poor relies on the financial exposure of the very low-income households such arrangements claim to benefit. The analysis reveals how water-debt arrangements not only deepen financialisation but also undermine the human right to water, exacerbate inequality, and depoliticise water access by framing it as a matter of individual responsibility. By foregrounding risk as a central analytical lens, the paper contributes to critical debates on financialisation and development and calls for a shift toward rights-based and public models of water provision that do not rely on the indebtedness of the poor.