RAINWATER HARVESTING AND STORAGE AT HOME Maji Nyumbani feasibility phase KUSCCO’S _Maji Nyumbani _programme aims to catalyze provision of micro-loans for drinking water and sanitation assets and infrastructure at home through SACCOs in Kenya.

In its implementation phase, the program will build capacities of select SACCOs with national reach to provide water/sanitation financing solutions for both households and community-based water enterprises active in their locality. SACCOs will receive technical assistance from the program to develop water loan products that respond to the needs of their members and communities, activate demand through promotions and targeted incentives, and lend with own capital as proof of concept. The project will apply a portion of its resources to incentivize SACCOs to mobilize finance and investment towards WASH products, as a part of our effort to mobilize KES 1.12B in financing over two years (to be verified) from the 10 proposed SACCOs. The incentive will be used for marketing purposes and mobilization of funds to ensure availability of affordable loan terms to SACCO clients.

The feasibility study will analyze examples of incentives and market mobilization in the cooperative sector that have been successful and recommend for adoption. Where small, piped schemes exist in rural communities, they are often managed by voluntary “self-help” groups or micro-entrepreneurs who start by coming together to pool their own little cash contributions to start as a social project to address a felt need. And gradually, they struggle to scale operations due to lack of financing opportunities to invest in infrastructure, ending up providing unreliable service. Quite often, intermittent funding from Government and NGOs are the only financing sources for such social enterprises.

Savings and Credit Cooperatives (SACCOs) are the most dominant social finance intermediaries in these rural communities – and better placed to provide tailored financing solutions for these underserved households and community-based water enterprises. Their mode of operations “self-help financing” replicates the practice of vast households and self-help groups in rural villages. However, the opportunity for SACCOs to play a financing role for water investment needs in local communities, remains un-explored despite majority of the households and micro enterprises being members/or clients of SACCOs in such rural setting in Kenya. Despite the critical importance of water and sanitation services in protecting public health, about 38 million people in Kenya lack access to piped water connection and depend on other sources for supply, such as surface water, unprotected and possibly contaminated wells, or vendors selling water of unverifiable sources and quality. For many, these water sources are usually far from their homes, and it typically falls to women and girls to spend much of their time and energy fetching water, a task which often exposes them to various risks.

UNICEF estimates that about 9.9 million people, mostly in rural areas, drink directly from contaminated and distant surface water sources. Average total coping costs for a household without a connection in rural areas is approximately KES 3800 per month. In comparison, the average water bill of a typical household in Nairobi that is connected to a piped system is only KES 446 per month. This comparison highlights the economic burdens that often fall more heavily on rural households without piped connections.

The absence of reliable piped water supply in most communities means that investments in solutions like borehole wells and rainwater harvesting tanks solutions are necessary to build water resilient households in rural Kenya.

 SACCOs form a vital part of Kenya’s financial system.  While the sector is much smaller in absolute terms than the banks – accounting for an estimated 10% of the assets in deposit-taking intermediaries – the significance is far greater.  SACCOs provide services to millions of Kenyans and frequently offer services which cannot be found elsewhere.  In rural areas many farmers depend on their SACCOs for credit and payment services. 

In Kenya specifically, SACCO’s provide a good opportunity to reach a larger segment of the population, majorly the middle- and low-income earners both in Kenya’s rural and urban areas. About 14 million Kenyans are members of a Savings and Credit Co-operative Societies (SACCOs). The program will target households and community-based water /sanitation service providers and other micro businesses. Specific needs of each customer segment will be elaborated from the feasibility study and market analysis to be carried out by the program before roll-out. We expect these needs to fall in two categories:

++Home Water Investments++: These will include investments in water tanks and water harvesting equipment, home water purifiers, solar powered water booster-pumps, fittings, piped connections, toilets. We expect SACCO members to be the main borrowers, with loan sizes of about KES 20K.

++Assets and micro-projects++: Micro enterprises may require short-term working capital to stock water /sanitation related projects of implement micro projects in their communities. Important assets may include water tanks, pipes, meters, gutters, solar panels, pumps, purifiers, chlorines, etc. Micro-projects will mainly revolve around water connections to households.

Once there is proof of demand and interest from SACCOs to scale lending, KUSCCO will support with raising required financing through its CCF facility; with an aim to blend SACCO savings and external finance.