There are many benefits of our Safe Water Projects that go beyond health benefits of having a reliable safe water supply. These include positive socio-economic impacts to people’s businesses and livelihoods. The following blog explores a case study written by our project development coordinator in Uganda, Grace Ayoo. It is about a local village savings and loan scheme which has had a positive on impact small business owners and family livelihoods in a community whose borehole was rehabilitated as part of CO2balance’s Lango Safe Water Project, which rehabilitates boreholes in Alebtong District, Northern Uganda.
What is a Village Savings and Loan Association?
Over the years, Village Savings and Loan Associations (VSLA) programs have empowered rural communities in northern Uganda to take control of their personal finances. Saving groups are self-managed and self-capitalized and have their own constitution that guides them based on the purpose for which they started saving. It also acts as a tool for uniting communities and building capacity and trust.
Each member of the group saves, takes out loans, repays loans with interest, and invests. VSLA participants have been known to save money for their children’s education, invest in livestock, farming or start up small businesses. They are usually bound by a clean social fabric leading to enough trust to hold the group together.
CO2balance Project – Lakcani Village, Aloi, Lango
Lakcani borehole, in Alebtong District was rehabilitated by CO2balance early 2019 and is monitored on a bi-monthly basis with every visit targeting the users but most especially the Water Resource Committee (WRC). The committee comprises of 5 females and 5 males, a recent guideline to encourage gender balance. The committee members were nominated and elected by the water users based on mutual trust and understanding to look into the proper management of the borehole.
During one of the visits they discussed user fee collection, a policy that was set by the government and reinforced by CO2balance. It’s a policy that states that every household using this borehole should pay an annual user fee amounting to 12,000 Uganda shillings towards operation and maintenance of the borehole. This fee is meant to be used to pay for labor that maintaining the borehole and any minor repairs that may be required. With CO2balance’s policy of coming in to do the major repairs, it has left the borehole working for a longer period, providing clean safe water all year round.
Lakcani borehole doesn’t precisely have a village savings group but it has borrowed the concept of VSLAs and this has enabled them to practice saving and loaning from money collected as borehole user fee.
The Chairperson Omara Calvin, explained ‘since the borehole started saving as a group in 2017, they continued until they hit 700,000 Uganda shillings after taking care of costs towards operation and maintenance of the borehole. This money was used to buy goats that were distributed to the WRC members as the start up point and each member was required to give a kid to another borehole user once it gave birth. This method was aimed at wealth creation through livestock to benefit every household’. Omara continued ’they realized that the next round of savings would be more diverse and go towards lending out money to the group as loans at an interest rate of 5%. This was welcomed by everyone and it saw many borehole users borrow money to capitalize their businesses, deal in livestock, pay school dues among others’.
‘On the onset of the project, CO2balance told us that much as they are working with us to maintain this borehole and ensure it provides clean water all year round, they assured us that the borehole remains our property and it’s the reason we should work hard towards collecting the water user fee’ commented 51 year old Epila Robert who works as the WRC treasurer.
The WRCs have decided that they want to use the interest earned from the money borrowed to fully repair the borehole and handle even the major repairs years after the project. They see this as a step to sustainability because the money collected is enough to handle major fixes.