In 2008, 83 percent of Kenyans living in urban areas, had access to safe drinking water – down from 91 percent in 1990. This gradual deterioration in urban water access is mainly due to growing demand caused by rapid population growth, especially in the informal settlements Small-scale private water providers have entered the market to fill the gap left in public service provision. This study examines what role they play in ensuring affordable, safe and reliable water supply. It finds that small-scale providers increase water supply coverage and reduce time poverty.As predicted by the “poverty penalty” concept, however, low-income households pay high prices for water of questionable quality.