Insuring against Rural Water Risk in Africa

Lead Research Organisation: University of Oxford
Department Name: Geography - SoGE


Community management of handpumps has been the accepted mode of thinking for rural water supply over three decades in Africa. The approach underpins the hundreds of millions of US dollars invested each year to fix broken handpumps and install new ones. With four out of five people without safe and reliable water living in rural areas the need is great, particularly as rural people tend to be poorer and be more vulnerable to increasing climate variability. However, despite billions invested in rural handpumps one in three handpumps do not work in rural Africa. This represents a huge wasted investment and is associated with high but avoidable health, welfare and livelihood costs. In times of austerity governments are rightly thinking harder on more sustainable solutions that provide greater value for money for taxpayers who generally foot the handpump bill.

Encouragingly, the risk of handpump breakdown bears all the hallmarks of an insurable risk. A recent technological break-through by researchers at Oxford University makes an insurance model now feasible. The researchers designed and successfully launched a smart handpump that automatically texts how often it is being used to a maintenance team ready to respond. This provides good and reliable data on a regular basis to know how handpumps are working and critically when they fail so a trained mechanic can quickly get out to repair the pump. Like any insurance model premiums are lower with more handpumps as they spread the risk across all users. Rural Africans are already used to health and livestock insurance products so this would be a natural extension.

What is not clear is how much users would pay and what level of maintenance service they would want. Handpumps are used by often over a hundred people for drinking water and for watering livestock. Understanding people's payment preferences is critical to designing a socially-acceptable insurance product. Equally it is important to know what insurance products are available in Africa and how they are performing to consider realistic alternatives. Linking consumer demand with insurance supply will then provide a credible basis to test such a new handpump insurance product in the next phase of the research.

There is a lot of excitement and interest in the research with the project partners including the United Nations Children Foundation (UNICEF) and the global body representing mobile phone companies and operators (GSMA). The Kenyan government is also very supportive with the Water Services Regulatory Board a partner in the work as part of their mandate to deliver safe water to all Kenyan citizens. With over half of rural Kenyans lacking safe and reliable water there is a real need to address handpump performance. Kenya is not unique though. Across rural Africa similar problems are faced. If this project is successful it could help the 276 million rural Africans access safe and reliable water to make their lives and futures healthy and wealthier. That would be good news for everyone.

Planned Impact

Our pathway to impact recognizes the inherent risks and attempt to address them in a structured and explicit fashion. First, unless an insurance mechanism is socially and culturally acceptable it will fail regardless of any actuarial wizardry. Our work builds on earlier social choice experiments in Mozambique, South Africa, Senegal and Kenya to listen to the voices of the poor using pictorial trade-off cards that can then be modeled in discrete choice models. This has proven highly effective in all previous work. Second, to achieve enduring impacts we need partners like UNICEF and GSMA with the knowledge and the mandate to drive changes at scale. Third, we aim to develop an objective and rigorous evidential platform to allow policy-makers to make justifiable decisions to shift from tired, failing but safe options. By providing new evidence and insights this project will not only challenge accepted thinking about the way rural water services are managed and financed, but could also stimulate entirely new sustainable, scalable and market-based business service delivery models.

Primary beneficiaries of this pioneering research will include (a) rural water users, particularly women and children; (b) local entrepreneurs and enterprises; and (c) governments and donors/investors.

First, it is low-income water users who suffer most from the inability to manage the financial risk inherent in community managed handpump supplies. Rural water users currently lack any mechanism to share or transfer the risk of a handpump breakdown of an unpredictable size at an unforeseen time. Though they are least able to manage risk, it is women (through lengthier collection times) and young children (through diarrhoeal diseases) who bear the brunt of having to resort to unsafe alternatives when pumps breakdown. Handpump insurance could enable water users to manage this risk by ensuring sufficient financing is always available for prompt repairs when breakdown occurs. With more than one billion rural dwellers in the developing world sourcing water from boreholes or shallow wells, the potential developmental impact of this initiative is significant.

By catalyzing the creation of a handpump insurance market, the research could prove beneficial to enterprises and entrepreneurs involved in both insurance and handpump maintenance services. Even where insurers are national or multinational in scale, the delivery channel is likely to be provided by local entities and enterprises. Increases in financing available for repair activities will boost the commercial viability of a handpump maintenance business for small scale entrepreneurs.

Governments and donors also have much to gain from an insurance mechanism that improves the financial sustainability of these systems. By increasing the functionality rates of handpump supplies, insurance models will mean governments and donors will yield a significantly greater return on their investments. The research will chart a pathway to enable governments to broaden their policy ambit beyond community management when framing rural water strategies and programmes.

Our results will be disseminated via academic papers, briefing notes and our website (, and an electronic newsletter sent to our mailing list. This will provide a platform to communicate our findings to a large audience - in 2012 our website has received more than 10,500 page visits from 99 countries (including 20 Sub-Saharan African countries). Our work has been featured on BBC television, radio and on-line, plus numerous articles in African newspapers and online media.


10 25 50
Description This work looked at how insurance logic could improve more reliable drinking water for people living in rural Kenya.

We found the handpumps communities and schools to lift groundwater for drinking and productive uses would be a good candidate for an insurance model. However, water users reported limited confidence or appetite for paying for insurance based on current health or life insurance products in the market. We did find that water users would be willing to pay if there was a guarantee of repairing broken waterpoints within a few days. Importantly, this repair work could be done outside the community or school by a professional provider. This insight allowed us to incubate a professional maintenance service provider to deliver contracted services at a fee acceptable to the waterpoint communities. In effect, this is a quasi-insurance model as the service providers pool risk across multiple waterpoints. However, water users find the arrangement satisfactory as the payment mechanism largely reflects existing social practices and norms. The payment is for fixing waterpoints, not the water supplied. This point is central to the social acceptability of the approach.

Since completion of this project, the work has evolved significantly with two companies delivering services to 90,000 people in Kenya. Further, the Uptime consortium has convened further partners in 2018 providing services for one million people in four African countries.
Exploitation Route As mentioned, the work has been advanced under the Uptime consortium in four countries in Africa. Further work is planned in Bangladesh and Nepal.
Sectors Financial Services, and Management Consultancy,Government, Democracy and Justice,Other

Description The findings have informed the design of a new Water Services Maintenance Trust Fund in Kenya. Private sector investors have verbally committed funds for 2017 and local government are supportive with advanced dialogue on investments to match user and investor contributions. The insurance logic advanced in the research informs the design of the Trust Fund. In September 2016, Kenya's new Water Act was gazetted which refers for the first time to financing arrangements for the rural water sector which, in part, was influenced by the research outputs.
First Year Of Impact 2015
Sector Other
Impact Types Societal

Description Article in The Economist (4 March 2017) on FundiFix model
Geographic Reach Multiple continents/international 
Policy Influence Type Influenced training of practitioners or researchers
Impact See
Description Citation in Government of Kenya Water Services Regulatory Annual Report 2014
Geographic Reach Africa 
Policy Influence Type Citation in other policy documents
Impact New model for rural water sustainability that benefits low-income and marginalised rural populations in Kenya gain more reliable water services.
Description UPGro - unlocking the potential of groundwater for the poor
Amount £1,890,000 (GBP)
Organisation Natural Environment Research Council 
Sector Public
Country United Kingdom
Start 02/2015 
End 02/2019
Description USAID Sustainable Wash Systems
Amount $15,300,000 (USD)
Organisation United States Agency for International Development 
Sector Public
Country United States
Start 07/2017 
End 09/2021
Title Longitudinal panel study data on household welfare, water resource management and governance in Kenya 2013-2016 
Description This dataset comprises of a longitudinal panel study monitoring socio-economic status and management of household water resources in Kwale County Kenya from 2013 to 2016. A sample of 531 handpump locations was used as a sampling frame for three rounds of household surveys in 2013/14 (November-January), 2015 (March-May) and 2016 (September-November). GSM-enabled transmitters (Thomson et al. 2012) were installed on 300 operational handpumps to provide daily usage data. The survey generated a comprehensive dataset capturing information on a) demographic characteristics, b) socio-economic status of the household, c) household health status, d) main and secondary household water sources, e) waterpoint management, f) water payment, g) water resources management as well as h) governance and political engagement for each household. 
Type Of Material Database/Collection of data 
Year Produced 2019 
Provided To Others? Yes  
Impact ************ 
Description Rural Water Sustainability 
Organisation UNICEF
Country United States 
Sector Public 
PI Contribution Expands scale of existing work with new research programme
Collaborator Contribution Links to wider regional initiatives in East and Southern Africa
Impact None yet.
Start Year 2014
Company Name Kwale Handpump Services Ltd. 
Description With ESRC support we incubated a Kenyan-owned social enterprise called Kwale Handpump Services Ltd, under the FundiFix model. The company employs three local staff including a manager and two mechanics with a Director providing targeted support. The start-up has required close collaboration with the Oxford team in terms of developing a business plan to recruit communities to the maintenance service, establishing financial procedures, including a mobile billing system, and using the 'smart handpump' data to determine demand for water and likely failures. The manager has been trained in using the database which processes the smart data so he can observe the patterns of handpump usage over time. The mechanics have been equipped with parts and motorbikes so they can fix failures fast. 
Year Established 2014 
Impact Local repairs under the model used by the company achieve 99% completion under the 3 day contract compared to 53% for communities doing it themselves, significantly reducing handpump downtime.
Description Short piece on challenges of rural water supply in Kenya on BBC South Today news 
Form Of Engagement Activity A press release, press conference or response to a media enquiry/interview
Part Of Official Scheme? No
Geographic Reach Regional
Primary Audience Public/other audiences
Results and Impact A short spot on BBC South Today on the challenges of rural water supply in Kenya - 18th June 2019
Year(s) Of Engagement Activity 2019
Description Technical session at World Water Week in Stockholm on 25 August 2015 on Sustainable Finance for Universal Rural Water Services 
Form Of Engagement Activity A formal working group, expert panel or dialogue
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Professional Practitioners
Results and Impact Session convened leading global practitioners advancing global goals of universal water services, including UNICEF regional office for East/Southern Africa (21 countries), GSMA (global mobile trade body), Government of Kenya and Government of Rwanda. The event is part of a global gathering of 3,000 policy-makers, scientists and practitioners focussing on Water and Development.

To follow
Year(s) Of Engagement Activity 2015