Water Survey

Are Microfinance Loans for Water Projects Paying Off?

1 Comment 23 November 2010

Are Microfinance Loans for Water Projects Paying Off?

Financing water projects in the developing world costs time, money and lives. While relief organizations wait for grant funding to initiate water projects, people are dying from dysentery, cholera and dehydration. The human expense incurred from this administrative process is unacceptable.

In developing countries like Haiti, the water supply is largely controlled by private sector vendors. These vendors can charge excessive rates for poor and inconsistent quality, of unmonitored water supplies. Until national programs are instituted to control water supply at an affordable rate to the entire population, innovative alternatives to private sector vendors and grant funded projects must be provided.

Professor Umpanu Lall is the Alan and Carol Silverstein Professor of Engineering at Columbia University. In a telephone interview Lall told WaterWideWeb, “Innovations that we need are at the user scale. The challenge we face in the developing world is making a cost-effective transition to distributed water systems, where treatment happens at the point of use, from centralized systems that filter water from the source”.

The Water Credit Initiative (WCI) is the first endeavor of its kind to offer micro-finance loans to communities in developing countries, where traditional credit programs are not in place. The framework of WCI is designed so that local communities can invest in sustainable water projects that target their specific water needs.

Water quality control at the point of use is integral to implementing sustainable and safe water projects. Enterprises like the WCI are only effective if water alternatives for these communities are available and completely sustainable at the local level. However, such endeavors comet a high price.

Microfinance loans are disappointing investors in the non-profit and private sector. The grant funding process can be time consuming and when funds finally reach the local community, the needs of that community may already be quadrupled by public health issues.

Bridging the finance gap in successful water projects is a tall order that requires   a multi-level response. Technological advancements developed by engineers that provide cost-effective water treatment options are essential to this course of action.

Investing in water projects that allow end users to control the quality of their water is necessary to decreasing mortality from water-borne diseases and poor sanitation systems.

How can progress be measured with respect to water projects in the developing world? Will success statistics include the dollars and cents value spent on saving lives? Or will reports reflect only the numbers saved by implementing cheaper and less safe water projects? Engineers and designers are working to create solutions to the problem of water which are financially feasible and manageable. Saving time and money on effective water projects that are sustainable will in fact save lives.

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