KANSAS CITY - Mrs. Manonmani, a 30–year-old wife and mother of two living in India, once had access to water only once every four days. Typically, that water was contaminated. Then came her WaterCredit loan and the water line connection that changed both her and her community.
Mrs. Manonmani is now one of thousands being helped by a micro-loan program pioneered by WaterPartners International. The WaterCredit Initiative™ applies micro-finance principles for the first time to the water and sanitation sector, and is revolutionizing the way help is delivered to the developing world. WaterCredit loans provide funds to those individuals and communities without access to traditional credit markets. Pilot projects for WaterCredit began three years ago in India and Bangladesh through funding provided by the Open Square Foundation (formerly Agora Foundation) and the Michael and Susan Dell Foundation. Initial results were so encouraging that the program was expanded to Kenya last year.
“Because the loans are repaid into a revolving fund, the number of people who can be served with the same dollars is greatly expanded,” says John Fitzpatrick, Director of International Programs for WaterPartners. “Instead of waiting around for a grant that may not materialize for years or decades – or ever – WaterCredit empowers people to meet their own needs on their own timetable.”
Micro-loans help save on water
While micro-finance programs have existed for some time, most are tied to income-generating activities. WaterCredit was the first to apply micro-finance to the water and sanitation sector demonstrating that the world’s poor can participate in meeting their own water needs.
Typically in the developing world, residents in urban areas who rely on water from private vendors spend 5 to 10 times more on water than their neighbors connected to municipal water supply systems.
GUARDIAN: A new chapter
WaterPartners is now expanding its WaterCredit Initiative to test different models of delivering credit to those in need of safe water. In cooperation with its local partner, located in Tiruchirappalli, India, the Gramalaya Urban And Rural Development Initiatives and Network (GUARDIAN), represents a new chapter in the application of micro-credit for the world’s poor.
Funded by WaterPartners, GUARDIAN is the first of its kind—a credit facility founded by a non-governmental organization in the water and sanitation sector. GUARDIAN will access private capital from commercial institutions to make loans to individuals who do not otherwise have access to credit, enabling them to obtain water hook-ups and build sanitation facilities. The individuals will be able to finance their loans largely through cost savings, as the cost-per-liter from the municipal water system is significantly lower than what they pay street vendors. In addition, the time they save from standing in line for water, frees them up to earn extra income and care for their families.
Mrs. Manonmani can now spend more time with her children and has more time to take care of her home. She can now work as a tailor, allowing her to earn an income and better support her family. In addition to this added income, she also shares water with her neighbors, charging a rupee per four pots collected. This money contributes to her repayment of the WaterCredit loan.
“WaterPartners is creating water supply solutions for years to come by giving communities access to credit for the first time,” Fitzpatrick said. “One child dies every 15 seconds from water-borne disease and that is why WaterPartners is committed to providing clean water and sanitation programs that work.”