Economic gains from good water and sanitation Lesley Pories, MCRP and MALD

Acknowledgements The author wishes to thank the entire staff of SIDUR, DHAN Foundation and Adhikar for their complete cooperation. Additional thanks are owed to the generous support of the Swiss Re Foundation and the Caterpillar Foundation as well as to M2i Consulting and Heather Arney,

Further Information The author can be reached via email at LPORIES@WATER.ORG. People interested in Adhikar’s work can read more at http://www.adhikarindia.org. Information about DHAN Foundation’s work is available at http://www.dhan.org/. Additional information about Water.org’s work in India and elsewhere around the world can be found at http://www.water.org.

About Water.org and WaterCredit

Water.org has been making waves since 2003 with its innovative model, WaterCredit: a program that uses microfinance to empower the world’s poor to access water and sanitation. Mobilizing domestic resources for addressing the water and sanitation crisis facilitates the scale and speed at which people can gain access to these critical developmental indicators and also helps alleviate the gap between the US $1 trillion in annual aid needed to solve this crisis and the $8 billion currently expended. Problems/Barriers to large-scale adoption of WaterCredit

• The assumption that micro-loans for water and sanitation are too risky because they are consumptive loans, not income generating;

• The assumption that “the poor”** do not have the capacity to repay these loans

**Assumes that all poor people are equally poor

Purpose and methodology

Reframe the perception of loans for water and sanitation as “income-enabling” by measuring time saved as a result of improved access to water and sanitation assets and calculating the economic gains to a household based on these time savings in India. Data was collected as part of Baseline-Endline survey analysis. Baseline data was collected in 2012 and Endline data was collected from November - December 2014. Data was collected via interviews with WaterCredit borrowers in southern India. The fact that data is self-reported stands as a major limitation of the study. Economic impact is calculated based on indicators such as: extra income generated from extra hours available to work per day, extra income generated from days not missed due to water-borne illness or the need to collect water, school and education-related impacts of not being sick or not missing school for water collection, and increased household income due to reduced medical bills.

Income and school increases in urban Hyderabad Boddamma is a daily laborer, earning ~6,000 INR ($100) / month (~300 INR ($5) / day)

Water collection duties (mother, daughters):

• Rotated staying home: 2 days a week for each female:

• Lost wages = $10 / week ($40 / month) for mother

• Lost time in school = 8 days a month (more than one school week) per daughter

Loan for 10,000 INR (~167 USD) to construct piped water connection at home • Extra 8 days income (~$40) per month

• Reduced physical pain – important in manual labor • Regained 8 days / month (more than one week) in school for both daughters

0%

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40%

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60%

Increased Decreased No change

Hours in a day school-going children devote to study

After new water facility(n=257)After new Sanitationfacility (n=695)

Endline surveys of 3 partners – key findings – children

Endline surveys – key findings – sanitation

Endline surveys – key findings – medical visits

INR 5,000 (~$83) for a water connection. The new water access enabled her to grow her breakfast business. She estimates that she now earns approximately INR 300 (~$5) a day, thus almost doubling the family income.

With the new free time gained by not having to travel for defecation, Deepa in Royalapuram village, Tamil Nadu, now spends 2-3 hours a day stitching clothes, earning around INR 3000 (~$50) a month (more during festival seasons). With her new income, Deepa pays the medical expenses and buys groceries for her house.

Income increases from sanitation access in rural Tamil Nadu

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Less than 30minutes

30 min-1 hour More than 1 hour Do not travel

How long do you take to travel to and from for defecation?

Baseline (n=886) Endline (n=898)

• Where borrowers constructed a household sanitation facility, total travel time for defecation reduced substantially

• 54.3% respondents (out of 897) reported that household access to sanitation has led to economic benefits for the family

• Where observed, the reason for economic gains was reported to be from income earned as a result of additional available time (58.4%, n=898)

• 9.4% women entered the workforce for the first time • 50.3% women were able to work more with the extra time

Lata, a WaterCredit borrower in Dindigul, Tamil Nadu, displays the supplies she has purchased for the beauty parlor she plans to open. Attending the training classes was only possible after getting a water connection, eliminating her 3-hour daily water collection routine*.

*Oftentimes, her sons would help her with this process, making them late for school.

Tirotamma, a WaterCredit borrower in Cuttack, Odisha, took a loan for

Income gains from water access in Odisha

• Total time invested in collecting water declined 53%: from an average of 13.4 hours to 7.1 hours per week

• 58.5% respondents (out of 294) reported that household access to water has led to economic benefits for the family

• Where observed, economic gains are mostly attributed to savings on water-related expenses and re-direction of time formerly dedicated to water collection now towards income-generating activities

• 6.1% women entered the workforce for the first time • 17.4% women were able to work more with the extra time

Commercial use of water or

selling, 0.7%

Family member able to earn additional

income due to more

time/facility available, 21.4%

Saving on water related

expense, 37.8%

No gain, 40.1%

What is the main reason for economic gain after having a water facility ? (n=294)

Endline surveys – key findings – water - 1 -

9.5%

1.7% 0.6%

4.5% 4.3% 0.7% 0.7%

5.5%

11.5%

0.1% 2.3%

58.7%

0.3% 1.7% 0.2% 2.5% 0.3% 0.1% 0.8% 0.4% 5.3% 0.2%

21.8%

66.5%

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Reason for any family member to have visited the doctor/hospital in the past 6 months

Baseline (n=1072)Endline (n=1161)

0.1%

53.7% 43.6%

1.6% 1.0% 0.0%

82.9%

13.8% 1.7% 1.6%

NA Up to Rs 250 Rs 251-500 Rs 501-1000 More than Rs 1000

Approximate monthly medical expenses Baseline (n=1151) Endline (n=1160)

Endline surveys – key findings – medical expenses