Over the last few decades, foreign aid projects have become beholden to ever-growing networks of stakeholders.
Today, most of these projects come with elaborate incentive structures for development workers to meet the demands of governments, corporations, private foundations, the list goes on. Too often, though, it doesn't include the people that are actually being served. And as a result, the success or failure of a product or program is often defined by its capacity to meet these standards instead of its ability to actually serve the needs of the poor.
Nowhere is this paradigm more evident than in the thousands of failed clean water projects littering many developing countries. So often, organizations with benevolent intentions have entered local communities to install equipment that has since broken down and never been repaired. In many cases, the equipment wasn't even being used in the first place.
An alternative approach that has gained traction in recent years is to treat the global poor as consumers in their own right. To apply this to clean water initiatives, the idea is that water treatment should be designed to meet the needs and demands of the poor at a price they can afford. But, as we emphasized in a recent blog post on "designing for impact," creating products for bottom of the pyramid consumers isn’t easy.
One example of a group that didn’t get it quite right was PlayPumps International. When PlayPumps first emerged, it was a big hit in the development community. The idea seemed ingenious: allow kids to have fun at a merry-go-round, which would generate energy to pump water from underground into a water tower.
But these systems failed for a number of reasons. They were installed in areas where older women would be forced to spin the merry-go-rounds because there weren't many children around. Local communities weren’t consulted before they were installed. And repairs were implemented very slowly. They ultimately closed their doors in 2010.
At Kiva, awareness of failed water products gives us all the more impetus to get it right. First and foremost, we begin by confirming that there’s a need for the product. This means that our Field Partners are working in contexts where access to clean water is a challenge, either due to unclean water sources or recontamination when transporting or storing water. In places where local communities don’t have access to clean water, one of the main health indicators is a relatively high mortality rate of children under the age of five from diarrheal diseases.
Additionally, we strive to ensure that the products we propose to finance are actually in demand by the poor and will be used. Products need to be affordable for households or communities. An important component of many of the products we help support is that they are eventually able to pay for themselves (through savings from no longer having to buy fuel to boil water, for example). Given this criteria, loans have the potential to be a valuable means of financing potential product solutions.
Other major challenges that we seek to address include distribution, training and repairs. Partners need to have in place a distribution strategy to effectively reach the rural and/or urban poor at low costs. Distributors and consumers need to be properly trained on the usage and maintenance of the products, and repairs and warranties are also factors we keep in mind as we evaluate partners’ business models.
In terms of the products themselves, there now exists a wide range of relatively inexpensive water treatment technologies. These include batch disinfectants, such as the Proctor & Gamble PUR sachets and Aquatabs, optimized solar water disinfection (SODIS) technology, which uses solar UV rays and plastic bottles, solar pasteurization, disinfectant resin, liquid chlorine bleach injection, chlorine tablet dispensers, and filter systems. You can find more info on these technologies here.
We work with partners that identify the technologies that are most useful and scalable in their contexts. One upcoming partner in Kenya focuses on technologies that are already commonly used in their target areas: spring protection and chlorine treatment. And our new Field Partner in Indonesia, Nazava Water Filters, has identified water filter candles made up of silver, ceramic and carbon as an effective method of providing water disinfectant services. The silver inhibits the growth of micro-organisms and keeps the filter sterile, the ceramic has small pores to filter out parasites, fungi and other micro-organisms, and the activated carbon reduces smells, tastes and chemicals like chloride.
In Indonesia, the need for water treatment products is pressing. Almost all water sources available to households provide water that needs to be treated. In rural areas, 95% of people boil their drinking water. Additionally, it’s estimated that Indonesian households spend around 8% of their income on drinking water. Nazava has shown that their products work (see more here), and their sales history shows that they are both affordable and in demand by Indonesian households.
We’re excited to be partnering with Nazava Water Filters to provide financing for resellers. Nazava currently has around 40 resellers in over 30 cities throughout Indonesia, but it lacks the finances to scale up its businesses. With Kiva lenders' capital, Nazava resellers will be able to purchase more goods at a time and save on shipping and other costs.
Designing effective, affordable water treatment solutions for the poor isn’t easy, but Kiva wants to help support the entrepreneurs who are already doing it well!
Rebekah Chang is an intern for Kiva’s Strategic Initiatives team, looking for new partners and loan products to extend opportunities and access to more people around the world. Rebekah has an M.A. in Development Economics and Conflict Management from Johns Hopkins University School of Advanced International Studies. Send her your feedback on this blog series at email@example.com .
This post is part of a larger series on Kiva’s strategic initiatives and innovative loan products, which are designed to expand opportunities for more borrowers across the globe.
Have questions? Send them our way at firstname.lastname@example.org.
Images courtesy of ChildFund and GizMag.
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