Mobile payment systems to reduce rural water risks in Africa

Lead Research Organisation: University of Oxford
Department Name: Smith School of Enterprise and the Env


Community management of handpumps has been the accepted mode of thinking for rural water supply over three decades in Africa. The paradigm underpins the hundreds of millions of US dollars invested each year to reduce institutional and operational water risks. The logic of the paradigm follows that (a) institutional risks are less where water users self-organise to manage and monitor service delivery compared to distant and unaccountable agencies, and (b) operational risks are less where local mechanics are trained to respond in timely and low-cost maintenance regimes. With one in three handpumps not functioning at any one time in Africa and 35 million more people without rural water services in 2011 compared to 1990 (WHO/UNICEF, 2014), the evidence starkly illustrates significant and widespread deficiencies in community handpump management with women and children impacted hardest. The significant but avoidable health, wealth and poverty impacts have left Africa lagging behind the global drive for universal water services with one in two rural Africans lacking improved water access.

This research project aims to improved handpump management by insuring payment risks. Like insurance products that pool risk of unanticipated but costly events, like a car break-down, flood damage to homes or a serious health problem, we proposed to apply the same approach to community handpumps in rural Kenya. Currently rural communities must work independently saving and paying for maintenance on a case by case basis. This is fine until an unexpected but costly repair emerges. Then the communities, which include a majority of households with low and variable income, simply can't pay to have their handpump repaired. They then turn to more distant, often dirty and costly water sources. Our approach brings these communities together in a shared financial model that reduces costs by sharing them amongst hundreds of handpumps. Earlier research suggests the majority of communities will pay into this 'insurance system' on a regular basis provided the handpumps are repaired in a couple of days. The project can guarantee this higher maintenance service which has reduced repair times from over a month to a couple of days. The communities love it the current trial of the maintenance service and now want to pay for this service through a local company to make it sustainable. This next phase of research is to introduce a fair payment system and monitor how communities pay over time. This will provide evidence for a more sustainable approach which the Government of Kenya supports and can be scaled up by our regional partner, UNICEF.

If successful we hope the model will provide a firmer and more sustainable financial model to keep water flowing for poor rural communities in Kenya and beyond. This will help improve the health and welfare of potentially millions of people, particularly women and girls who hit hardest when handpumps fail and they must walk miles to find alternative water supplies for their families.

Planned Impact

Who will benefit from the research?

Primary beneficiaries of this research will include
(a) 300 communities and up to 50,000 rural water users, particularly women and children;

(b) local entrepreneurs and mechanics through the establishment and capacity development in a new handpump maintenance company; and

(c) governments and donors/investors.

How will they benefit?
(a) 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. Sharing financial risks could enable water users to smooth unanticipated but high cost repairs 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.

(b) By establishing a local, handpump maintenance services company and testing it the research will build local business capacity and hopefully attract additional funds to support the model in the study site and across Kenya. Increases in financing available for repair activities will boost the commercial viability of a handpump maintenance business for small scale entrepreneurs.

(c) Governments and donors also have much to gain from a more sustainable and replicable financial model that improves the investment case and impacts for poor people. By increasing the reliability and functionality rates of handpump supplies, new financial models will mean governments and donors can deliver better value for money promoting drinking water services are maintained and accelerated for the 273 million people without water access around the world. For the Government of Kenya this approach aligns with the constitutional norm that recognises the Human Right to Water, the new Water Bill (2014/15) and Vision 2030 that aims to ensure universal drinking water supplies. For UNICEF the project aligns with their mandate to improve the living conditions of all children, particularly those most vulnerable and marginalised. African children have the highest mortality and morbidity rates in the world with significant evidence identifying the critical role of reliable and safe water to improve health and wider welfare impacts.
Description Insuring against rural water risks requires new knowledge on information, institutional and financial systems. This project has made science and policy advances in all three domains. This has led to a new and well-received new model of rural water sustainability called the FundiFix Model ("fundi" is mechanic in Swahili) co-produced with UNICEF. FundiFix operates in two Counties in Kenya benefiting over 30,000 people with more reliable service delivery which they pay for in a pre-pay, insurance model.

Article 94 of the Government of Kenya's Water Act (2016) is informed by the research and makes reference to expanding rural water service provision to include performance-based models (like FundiFix) for the first time. The model has four components:

a) Institutional design - Developed the FundiFix business model, a performance-based approach working with government, communities and investors for sustainable rural water supply. Read more about the model:

b) Technical innovation - Used smart handpumps to monitor handpumps, providing the information base for performance-based contracts with maintenance service providers. Read more about Smart Handpumps:

c) Financial sustainability - Legally registered the Water Services Maintenance Trust Funds in 2 Kenyan counties ( Gained financial investments from communities signing up to the service (69 communities, out of 300 in total), from private sector (Base Titanium Ltd (mining) and DoTerra (agriculture)) and county government investment in the Trust Funds. International stakeholders UNICEF and DFID both played a role in leveraging county government funding

d) Business incubation - Successfully incubated Kenyan-registered company Kwale Handpump Services Ltd. which fixes handpumps within 3 days of breakdown in Kwale County, Kenya. Over 13000 people are benefiting from a reliable source of water for their domestic needs as a result of this project. New business streams are being developed including marketing the significant local skills in survey work by the 25 local enumerators. The business stands ready to run independently of research funds in 2017/18

As private models are becoming increasingly prominent in the rural water sector, this research provides insights into the factors that drive institutional change - specifically, the risk factors influencing rural water users to either manage their groundwater infrastructure themselves or sign up to the professional service. Three waves of longitudinal dataset on 3,300 households in Kwale County gathered through this research, combined with information from a water-point mapping survey of 534 handpumps and data on volumetric usage obtained via smart handpump monitoring technology, are being used to evaluate participation and payment behaviours.

Our analysis shows that sign up for the service is determined by a range of environmental, institutional and financial factors. Key drivers for behaviour change seem to be of an environmental and organisational nature. Environmental factors, such as low salinity levels, appear to be a determining factor. From a financial angle, communities with a system for regularly collecting finance are more likely to sign up for the service. Provisional findings also indicate that a higher proportion of women is associated with a higher likelihood of communities collectively signing up, which underlines the critical role of women in decision-making to improve and sustain water supplies in Africa.

The Rural Water Risk project has been incorporated into the REACH Programme (DFID, £15m, 2015-22, directed by same PI) in Kenya with new work staring in Bangladesh in 2017 in partnership with UNICEF. With the SDG agenda requiring new data, models and systems this project continues to work closely with UNICEF globally, regional and nationally to translate the research into impacts which benefit the poor.
Exploitation Route Oxford's global and regional collaboration with UNICEF is providing a strong platform to monitor and share findings at the regional and global levels.
Sectors Communities and Social Services/Policy,Digital/Communication/Information Technologies (including Software),Government, Democracy and Justice

Description Our research on water user payment behaviours linked to the quality and performance of waterpoint sustainability has lead to two major contributions to rural water policy and practice. First, the FundiFix model has been specified to a non-academic and practitioner audience in collaboration with UNICEF to identify four critical dimensions: a) smart monitoring, b) financial sustainability, c) professional services and d) institutional coordination. We have then registered and incubated two, Kenyan-owned Maintenance Service Provider companies in two Kenyan Counties (Kwale and Kitui) to provide a guaranteed repair service within 72 hours to communities paying a monthly fee on a one year contract. With the recent (2018) expansion to piped water systems this has expanded to 40,000 users including schools, clinics and communities. Second, acknowledging the large funding gap to finance maintenance to this level we have legally registered Water Services Maintenance Trust Funds in each county with a Board of Trustees. Based on performance metrics from the company (operational, financial) funds are released to support the companies expand and professionalise. The Trust Funds have been supported by mining and agriculture companies with the DFID-funded REACH programme. UNICEF, World Bank , NGOs and other governments are interested in this 'model' which is based around the primary research from the Oxford team since 2012 in Kenya. Work in Bangladesh is now advancing with significant interest in a national model based on the results from the first phase. While still early days the model and results have led to many in the sector rethinking the institutional and financial architecture of rural water policy and provision. The Development Frontiers grants allowed us to take some major risks in going significantly beyond traditional research in designing and incubating companies. While their future is far from certain the proof-of-concept has empirically show poor, rural people can and will pay for a valued service (rapid repair) and local companies can supply this at a reasonable cost but a subsidy is still required and current donor and government behaviour does not understand the nature or response to this challenge. UNICEF is promoting these findings and though the political economy of rural water is challenging on many levels, these results are illustrating a way forward if key institutional actors change. We continue to theorise and monitor these institutional behaviours which are often hidden and complicit in accepting a level of performance that will never achieve the SDG for universal basic services (never mind 'safely managed water on site'). Through the REACH programme we are attempting to scale up some of this work as the translation into practice is a slow and uneven process.
First Year Of Impact 2015
Sector Communities and Social Services/Policy,Digital/Communication/Information Technologies (including Software)
Impact Types Societal,Policy & public services

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 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
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 Interview with Johanna Koehler featured in The Economist article: Pay as you drink: A better way to provide drinking water in rural Africa 
Form Of Engagement Activity A press release, press conference or response to a media enquiry/interview
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Media (as a channel to the public)
Results and Impact Media interview with The Economist leading to article featuring innovative research in the field of rural water services
Year(s) Of Engagement Activity 2017
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 Special session at the Rural Water Supply Network Forum in Abidjan, November 2016 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Professional Practitioners
Results and Impact In a special session at the Rural Water Supply Network Forum in Abidjan in November 2016, the Oxford research team presented the FundiFix model including the sustainable finance mechanism developed through this research. Funded by UNICEF, the event was attended by around 300 practitioners and researchers from the African rural water sector.
Year(s) Of Engagement Activity 2016
Description Talk to the Rotary Club of Diani 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach Local
Primary Audience Supporters
Results and Impact 20 members of the Rotary Club of Diani (businesspeople in Kwale County) were presented with findings relating to the importance of groundwater in mitigating the impacts of drought and with evidence for the need for a management plan for new water infrastructure efficacy. The talk was given on request by the club which is seeking advice about a borehole it is planning to drill for a local primary school.
Year(s) Of Engagement Activity 2017
Description Why is there a handpump in the carpark? Seminar at the School of Geography and the Environment, University of Oxford 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Public/other audiences
Results and Impact A seminar was held at the University of Oxford's School of Geography and the Environment on October 17th 2016 to reveal the purpose behind a handpump which has been installed in the carpark. The 'Smart Handpump' is part of a bold research initiative that connects novel technology, computational informatics, institutional design, sustainable finance and policy reform, to improve poor people's access to safe, reliable water. The event attracted representatives from governmental and third sector organisations and has increased awareness of a new and transferable model to achieve reliable water services in rural Africa.
Year(s) Of Engagement Activity 2016