IRC support to “Water and microfinance” seminar in India

Microfinance is a hot topic in the water sector. It can make an important contribution to the achievement of the water and sanitation Millennium Development Goals (MDGs). Used properly it can help reduce poverty and empower women. During the state visit of Queen Beatrix of the Netherlands to India from 24 to 27 October 2007 IRC helped facilitate a “Water and microfinance: exploring innovative partnerships” seminar in New Delhi. On this occasion a special glossy NWP/IRC booklet was launched Microfinance for Water, Sanitation and Hygiene, An introduction. This was put online the same day as the seminar, see http://www.irc.nl/page/37958

The Netherlands Water Partnership contracted IRC support for preparation of the booklet and facilitation of the seminar. The goal was to build bridges and trigger new initiatives and partnerships between the sectors. The seminar brought together parties from the water sector and microfinance sectors in India as well as from The Netherlands. The Prince of Orange in his speech talked about a marriage in the making between the two, see http://www.koninklijkhuis.nl/content.jsp?objectid=23422

IRC’s Catarina Fonseca’s role was to host one of the tables at the marketplace on “microfinance and international good practices”, together with K. Seetharam from the Asian development Bank. This included matchmaking between the Dutch private investors and the Indian monetary financial institutions (MFIs), and talking with lots of people.

Microfinance for sanitation

Ms S.S. Nair, Secretary of the Department of Drinking Water Supply, Ministry of Rural Development reflected on the measures to achieve the rural sanitation MDGs in India by 2012. According to her, the prizes at panchayat level for total sanitation have been increasing at the rate of sanitation coverage (from 6% in 2005 to 14% in 2009). Microfinance has an increasing role to play for sanitation in India, but then MFIs have to change the group lending to individual lending. This is not the way it is done in India, but is very common in Africa for instance.

5% of Bangladesh GDP through treadle pumps

Mr. Mahajan, from BASIX, an India MFI mentioned that 5% of Bangladesh GDP was due to the introduction of the treadle pumps and that most of these have been acquired with microcredit. For a treadle pump, 5.000 Rupees are needed to irrigate one hectare of land. According to him, adding small lifting devises to irrigation schemes had large impact on rural livelihoods. An initial investment of 50.000 Rupees (3/5 meters elevation and 200m distance, diesel engine and intake well) allows for an irrigation area of 5/10 hectares, which is usually owned by 5/10 farmers.

BASIX is a new generation livelihood promotion institution established in 1996, working with over 190,000 poor households in 44 districts and eight states in India.