The Gift of Clean Water

Can microloans help fund global water projects?

Laura_Sanchez_Blog

It’s the season of giving and during the holidays, many of us celebrate by sharing gifts. A few years ago, I became interested in microlending while searching for a way to, in some small way, do a little global good. I thought I would share my personal experience here as a means of exploring microlending’s potential impact relevant to water professionals and water projects worldwide.

Microlending is an economic development system in which small loans are given by individuals (rather than banks) to enterprising people often overlooked by traditional lenders. The idea behind it is that the loan not only helps the individual break the cycle of poverty, but also can become the start of a positive economic pattern that benefits the entire community. The transformative model was developed and popularized by Nobel Peace Laureate Mohammad Yunus.

Yunus, an economics professor, was working in Bangladesh, where he met Sufiya Begum, a mother of three who made bamboo stools. She could not afford the 22-cent cost of the raw materials, so she borrowed that amount from store owners and in return sold her stools exclusively through them. They set their prices so low, however, that she cleared only two cents per stool, creating a continual deficit. Yunus recognized that it would take 22 cents to break the poverty cycle.

He found other entrepreneurs in similar situations and, one month, loaned a total of 27 dollars as an experiment. The economic model was successful, and the loans repaid. Out of this, Bangladesh’s Grameen Bank was born. Since then, the concept has inspired other organizations to offer small-scale loans to people around the world.

There are a number of microlending organizations to choose from today. I selected an organization called Kiva because of the fact that the website does not take a percentage of the lender’s capital, instead directly connecting lenders with borrowers. The organization funds these loans with crowd-sourced capital that they loan at zero percent interest to field partners.

I scrolled through the website, reading each prospective loan client’s background sheet, business plan, and goals. I found both international and domestic projects to support and was touched by their stories.

Ultimately, I chose to help fund a loan for a school in Uganda in need of a UV water filtration system and 1,000-liter tank. The school’s director explained in her essay that she uses a large amount of the school’s budget on firewood to boil water for drinking. She felt that access to clean water would increase student focus and attendance since water-borne illnesses often prevent children from coming to school. In turn, she planned to repay the loan with the fees the school collects each term. Eventually, the savings could be dedicated to books and other important curricular materials.

By investing in the school’s UV water filtration system and tank, I felt like I had contributed in a tiny way to something positive—like my pocket change was helping create bigger change. Over time, the loan was repaid and I chose to reinvest it in another water project, this time in Nicaragua.

What are your thoughts? Do you feel that microlending has the potential to help advance water technologies worldwide? What sort of projects would interest you? WE_bug_web

Comments
  • Edo McGowan.

    Laura————I am far more than impressed, having seen where and how far our tax dollars do not go in major foreign aid water projects. Some of these were worthy projects that failed because of the times, the Cold War, many in Africa, some in Uganda (former British East-Africa), some in the Horn. For want of water, hundreds of thousands of animals have died in the horn, along with thousands of people. (http://pdf.usaid.gov/pdf_docs/Xdaba262a.pdf).

    The takings of water from the Nile as big development progresses will likely see small-holders displaced and perhaps neighbor pitted against neighbor, with severe collateral damage in displacement. The displaced and marginalized are often without anything near an adequate water source.

    Projects like you describe are where emphasis needs to go. I would like more info.

    Cheers—————-Edo

    Reply
  • Rick Laughlin, APLD.

    Hi Laura Sanchez, I am going to come into a lot of money in the next few months…I really like the Kiva website for loaning to people for good causes.

    Reply
  • Howie Hall.

    Thanks, Laura, for sharing this idea. I also think that helping people on a small, personal scale makes sense. I wasn’t aware that there were organizations set up to facilitate this.

    Reply
    • Laura S.

      Thank you for reading, Howie! I’m so pleased that you found the topic inspiring!

      Reply
  • Antonio De la Cruz.

    In spite of its low carbon emissions (lower than 4%), Africa is one of the most vulnerable regions to climate change that will impact its low production-rain feed agriculture. Global warming, even in limited proportions, will increase both drought and flooding (especially in eastern Africa). If plan correctly and with proper training, microlending and funding small and multipurpose green infrastructure (GI) projects could make a big difference in large and small villages for agriculture, reducing floods and storing floodwater for crop irrigation during periods of drought, sanitary projects, soil protection and many more. These green infrastructure (GI) projects should use relevant and useful plants like vetiver (“Vetiveria zizanoides”)

    Reply
  • Glenn Strahs.

    The important potential for drinking water projects in developing countries is to use solar and other renewable power. This would make them totally sustainable, scalable and able to operate where there is no grid or other infrastructure. I would be happy to tell you more.

    Reply
  • Dianna Cowart.

    I have just learned recently about microlending and you have inspired me to go and check out Kiva. Thank you! I, too, am drawn to water projects, having donated in the past to organizations that provide clean water, but who take a hefty part of the donations for overhead, and also to those that provide innovative ways to grow food crops.

    Reply
    • Laura S.

      Absolutely! I agree that it’s important to fund projects through organizations that use capital efficiently.

      Reply
  • frank yanchus.

    awesome idea, all of humanity has concerns with potable water, here it is with large bottled water companies stealing our drinking water and governments allowing it to continue

    Reply
  • Denise OMeara.

    I have been funding micro loans through KIVA for years. It’s something that you can do as an individual or group. Loans are in many categories and are both internationally based and domestic. You can find a group to join as a lender on the website that represents your profession or interest areas and philosophies. Information on the local lending/ management groups is given so you can make informed decisions on where to lend. It’s very satisfied and helps others to help themselves. Most of my loans have been paid back in full. Occasionally one will default. But since I loan in increments of $25, I always am recycling payments to new loans. If you haven’t checked out KIVA, please do, and a wonderful, sharing 2018 to all!

    Reply
  • Anthony Johnson.

    Thank you Laura ! I enjoy your articles and learn so much from them. We truly are blessed in this country and you have inspired me to give this concept a try . . . to 2018 🙂

    Reply
    • Laura S.

      I’m delighted to hear that! Thank you for reading and participating in our discussions, Tony.

      Reply

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