Understanding financial flows for rural water services in Africa

Financial sustainability is a necessary but often forgotten condition to advance global goals of universal, reliable, safe and affordable water services. Oxford University researchers are designing and testing new financial models to find out what works for the rural poor in Kenya.

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In rural Africa people are four times more likely to get their water from an unsafe source than those living in urban areas. Around one in three handpumps are broken at any one time.

The Water Programme at the Smith School of Enterprise and the Environment is trialling novel financial models to improve rural water sustainability and results from ongoing research in Kenya are published in two new Working Papers.

The unpredictable timing and magnitude of costs associated with operation and maintenance is a chronic problem for communities. The first study assesses the case for handpump insurance to reduce financial risks, and is supported by a grant from the UK Department for International Development and the Economic and Social Research Council.

While it seems unlikely that a standalone insurance product would offer a viable business model, the concept of pooling finances and spreading risk across multiple communities could help them pay for services that last.

The second study supported by UNICEF, builds on the teams earlier work and tests a model where water users pre-pay for a professional maintenance service that uses mobile-enabled data on handpump use. The report argues that improved institutional coordination and investment, and improved monitoring systems are necessary conditions for achieving universal rural water services.

The two papers will be launched at World Water Week 2015 in Stockholm, Sweden.

Read the reports

Insuring Against Rural Water Risk – Evidence from Kwale, Kenya
Financial Sustainability for Universal Rural Water Services – Evidence from Kyuso, Kenya