Asha Pande had spent hours queuing up with her neighbours to fetch water from a public tap at her slum in Dahegaon Rangari in Koradi, near Nagpur. Squabbles frequently erupted as the water supply turned erratic. She resolved to undertake a gruelling 6-km journey every day to draw water from the Kolar river, but this exacerbated her backache.
An overexerted Asha was unable to work regularly and her family’s financial woes deepened. It was at this juncture that she applied for water credit by joining a self-help group run by ESAF, a microfinance institution which partners Water.org. A water pipe was installed at her home and she was able to supplement her family’s income like she used to earlier.
Trekking long distances for water forms part of the daily grind for women at the bottom of the pyramid — be it in the slums of Tiruchi or the shantytowns of Nairobi. And there is no guarantee for the quality of the water or the safety of the women fetching it from long distances, especially in the wee hours of the morning. Can a mix of microfinance and smart subsidies help millions of women break free from the double whammy of poor sanitation and water delivery?
Water.org — co-founded by the social entrepreneur Gary White and Hollywood actor Matt Damon — has in place the WaterCredit initiative, wherein microfinance institutions (MFIs) and watsan (water and sanitation) NGOs collaborate to provide poor households access to water and sanitation through loan programmes.
Savings all the way
Communities in India have been highly receptive to the WaterCredit initiative, says April Rinne, Director of WaterCredit. “The watsan loans are not income generating, but income enhancing,” explains this Harvard-educated lawyer with years of experience in microfinance.
Loans ranging from $100 to $150 are provided to individual borrowers to help install water/sewer connections, which in turn save time and enable the women to focus on income generating activities. It is estimated that women and girls often spend six hours a day commuting to and from water sources. “WaterCredit helps communities arrest health expenditure and directs investment in productive activities,” says Pon Aananth, WaterCredit officer in Tiruchi.
Mahadevi, a sari seller in Kanchipuram, joined Hand in Hand’s self-help group and took a Rs 6,000 loan to construct a toilet and install a tap at home. “Before taking the WaterCredit, I used to walk 2 km every day to fetch water and hide behind bushes to attend nature’s call,” she recalls. Dignity is a huge demand driver for watsan credit, says April.
Gender issues are strongly entwined with the watsan sector. Girls who shoulder the daily responsibility of fetching water for the family end up missing school on many days and, in extreme cases, even drop out.
Curse of ‘poverty penalty’
The poor typically pay 12 times more for every litre of water compared to the rest. However, this jinx of ‘poverty penalty’ can be broken using watsan loans at 10-24 per cent interest (including service fees) to build low-cost latrines and water taps.
Water.org deploys both philanthropic and commercial capital to make watsan credit sustainable and scalable in the long run. It has also entered markets across Latin America and Africa. “Water.org typically enters countries with a sophisticated microfinance industry,” says April. “We have witnessed a huge demand for watsan loans, and we have also been able to meet our social performance targets through the initiative,” says Paul Sathiyananathan, Executive Director, Guardian MFI, which partners Water.org
Watsan loans have a whopping 98 per cent repayment rate in India and Water.org has made inroads into Karnataka and Orissa by tying up with microfinance bodies Grameen Koota and BISWA respectively.
Citing water and land availability as some of the key challenges facing the watsan sector, Suresh Krishna, Managing Director of Grameen Koota, says, “Sanitary latrines are essential aspirations for the rural poor. In the past they used to expect the Government to provide sanitation facilities, but now the mindset is changing in favour of water and sanitation-based micro-loans.”
Seven out of the eight UN millennium development goals are directly related to water and sanitation, and market research indicates immense scope for scaling up watsan credit.
Beyond gender divide
April believes that the benefits of watsan are not limited to women alone, but extend to the entire family. Take, for instance, Masilamani, a daily labourer who has suffered a heart attack and still had to walk a long distance every day to relieve himself as there was no toilet near his home. His wife, Jayalakshmi, took Rs 6,000 loan from Hand in Hand, an MFI partnering Water.org in Tamil Nadu, to build a toilet at home. She repaid it in monthly instalments of Rs 500 in a year.
“My sons could not get ready for school on time as there was no water and toilet at home,” says Nirmala, a housewife in Tiruchi whose husband is an agricultural worker. She took a watsan loan of Rs 7,500 from Guardian. “Thankfully, my sons are now punctual and there is no risk of water-borne diseases spreading,” says a relieved Nirmala.
April narrates how the patriarch of a South Indian family had laid down a pre-condition in his will directing his sons and daughters to construct toilets for their respective families before claiming their share of the inheritance. “Evidently, a toilet cannot be equally divided among four children,” she quips.