Revolving fund for household water sanitation facilities in Madhya Pradesh - Need experiences and referrals

From Kulwant Singh, UN-HABITAT, New Delhi
Posted 28 August 2007

Dear Members,

Under the Water for Asian Cities Programme, UN-HABITAT is working in four cities of Madhya Pradesh (Bhopal, Gwalior, Indore and Jabalpur) for improvement and expansion of urban water supply, sewerage and sanitation, water drainage and solid waste management. UN-HABITAT has set up a revolving fund for financing small community managed water and sanitation initiatives in the project towns of Madhya Pradesh.

A set of guidelines for the revolving fund, duly endorsed by the State Government of Madhya Pradesh, have been developed for this purpose. The revolving funds are so far working quite satisfactorily.

Under the programme, we have developed a Sanitation Fund managed by an NGO which gives loan money to households for construction of individual household toilets. The money is recovered in installments and the fund utilised in a revolving manner so that more and more households can benefit. In another model, we facilitated piped water connections for individual household, where the capital investment was done by UN-HABITAT and the amount is being recovered from households through a monthly charge for the connection and the water charges. The recovered money is put in a revolving fund for use by another neighbourhood. In Lao PDR we are facilitating individual household loans for water connections as well as toilets. These pilots in India as well as in Lao PDR have so far been working successfully. There, however, is a keenness to scale up these.

We are now proposing to scale up the financing activities both for water and sanitation at the national and state levels. It is learnt that there are several such financing initiatives in the country for provision of water and sanitation services at the local level.

In the above context, I request members to kindly share with us the following:

  • Experiences on the kind of models being used for financing household water and sanitation facilities for weaker sections in India and the innovations that have increased access of poorest to water and sanitation facilities.
  • Suggestions on what not to do, and learnings about possible pitfalls that such programmes should avoid to ensure greater success.
  • Names of institutions, organisations and programmes that have adopted a similar approach and that can support us in designing, capacity building for the programme.

Your inputs will help us in evaluating our own experiences and enhancing the design of the scaled-up programme and would be deeply appreciated.

Please see attachment below for the responses.