A better way to end water poverty in Malawi: harnessing the power of entrepreneurship

Beating water poverty through enterprise not aid. Giving people choices which improve income and health. Customers not beneficiaries.

Photo of Duncan Marsh
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I confirm that I am fully aware of the eligibility criteria, and based on its description, I am eligible to apply to the CSV Prize 2017.

  • Yes, I'm eligible

Preferred language

  • English

Organization name

Pump Aid

Year founded

1998

Initiative stage

  • Scaling (the solution has passed the previous stages and is growing its impact on a regional or global scale)

Annual budget in 2017 (USD)

  • $1mil - $5mil

Number of beneficiaries impacted so far

  • 10,000 - 50,000

Organization type

  • Nonprofit, NGO, or citizen sector

Secondary Focus Area

  • Rural development
  • Nutrition

Headquarters location: Country

  • United Kingdom of Great Britain and Northern Ireland

Headquarters location: City

London

Location(s) of impact

Malawi: Kasungu district, scaling up to Mchinji district

Website

http://www.pumpaid.org

Facebook URL

http://www.facebook.com/PumpAid

Twitter URL

http://www.twitter.com/PumpAid

Problem: What problem is this initiative trying to address?

Malawi is a poor nation (170/187 on the UN HDI). DFID Malawi estimates 40% of community water points are non-functional due to lack of capacity and resources to maintain them, putting over 7m Malawians at risk to waterborne diseases.

To beat poverty, households need convenient access to water (defined as up to 500m away but poor access reduces use for hygiene purposes and increases contamination) & small-scale farmers need water for irrigation through low-cost pumps (vulnerable to weather yet only 11% use irrigation)

Solution Summary: What is the proposed solution? What do you see as its most promising aspects for creating shared value?

We harness the drive of entrepreneurs and treat individuals like customers, not beneficiaries. We support individuals to create businesses that transform lives by selling affordable pumps and services to households, communities, pre-schools and farmers. We promote earnings, health, food security and prosperity without needing ongoing external aid.

We also secure wide stakeholder support from governments, health authorities and other NGOs to ensure maximum impact. This is creating shared value.

We ran a successful ‘self-supply’ pilot from 2014-16 in Malawi, encouraging individuals to invest in their own capacity which has been shown to be sustainable and cost-effective. We recruited, trained and supported 25 entrepreneurs through technical and business skills training. They responded to local demand in three markets to tackle the root causes of water poverty: access for individual and groups of households, reliability of community pumps and irrigation for small-scale farmers.

Impact: What is the impact of the work to date? Specify both the social and the environmental impact of your work

The results of the pilot were astonishing:

• The training and support of 25 entrepreneurs and their active engagement in business gave 21,614 individuals access to safe water at a cost per head less than half that of a traditional community water point.
• All entrepreneurs doubled their income, a third quadrupled income and all are still running profitable businesses today.
• Households have convenient access to safe water - average distance to improved water is 11m but 65% of customers used to travel over 500m. Increased convenience meant that 86% report an increase in water use, particularly for handwashing and hygiene.
• Improved reliability of community managed water points. In the pilot areas, pump functionality rates increased from 55% to 95%.
• Greater food security. Farmers at least doubled yields using rope-and-washer irrigation pumps (bought despite being given free treadle pumps) and could recoup the cost of a pump in one additional winter harvest (0.3 Hectare plot)

Financial sustainability plan: How is this initiative financially supported? How will you ensure its financial sustainability long-term?

We are establishing a social enterprise to drive forward ‘self-supply’ in Malawi.

We believe this can only succeed when commercial principles are applied. However, this is a new market in a difficult environment and therefore we actively seeking a combination of grant / risk reduction investment (received from DFID UK) and social impact investment.

Our self-supply phase 2 development will establish a social franchise model, wherein high performing entrepreneurs (30%) will be supported to develop growth-driven SMEs. The social enterprise vehicle for this will become financially self-sustaining over a 5-year period.

Income sources (last accounts):
Individual donations/gifts (7%)
Government & foundation grants (76%)
Corporate contributions (14%)
Earned income (0%)
Other (3%)

Unique value proposition: What makes your initiative innovative? How does your project differ from other organizations working in the same field?

Though self-supply has been effective elsewhere, it had not been successful in Malawi until our pilot.

What stands us apart is the belief that drives our work. We believe that rural communities in Malawi are not beneficiaries deserving of our pity. On the contrary, as we have shown, even the poorest communities have the ability and desire to invest in their own prosperity. They are customers not beneficiaries.

This is the antithesis of ‘traditional aid’ and a better way to end poverty.

Founding story: Share a story about the "Aha!" moment that sparked the beginning of this initiative.

For years, Malawi has been classified as aid-dependent and its rural populations (85% of total) deemed too poor to invest in themselves.

In 2015 we met a small-scale farmer in Kasungu. He had purchased an irrigation pump from an entrepreneur we trained under the pilot project. He told us how, in just one ‘winter season’ on a plot of less than .5 acre, he had harvested maize, tomatoes and spinach using the irrigation pump and recouped, in full, the cost of the pump, seed and fertiliser. We went on to imagine what the other 100,000’s of small-scale farmers in Malawi could do with a similar investment.

From this day on, we set out to challenge the preconception that poor communities are unable or unwilling to pay for the services they need and, in doing so, challenge the traditional approach of international development which creates dependency instead of encouraging self-sufficiency

Where did you hear about the Nestlé Creating Shared Value Prize?

  • Participated in previous CSV Prize competitions

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Photo of Iain Church

Duncan, as someone who works with smallholders in Malawi, I love this approach. Part of my project allows smallholders to purify water too - so perhaps there is overlap in what we do; I would welcome the chance to discuss ideas with you. I think the approach of seeing smallholders as customers rather than beneficiaries is key and something that should be adopted more widely. Good luck.

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