72050 RWSGEAP NOTES August 1995 UNDP/World Bank Water and Sanitation Program No. 2 Regional Water and Sanitation Group for East Asia and Pacific RESOURCE MOBILIZATION TWENTY WAYS TO GET YOUR WATER Mary Judd Water and sanitation projects in many parts of the developing world have demonstrated that communities are willing and able to manage and self-fmance improved water supply and sanitation facilities. This RWSGEAP NOTE on resource mobilization illustrates the various innovative ways communities have collected and raisedfunds for their water and sanitation systems in Indonesia. Water and sanitation projects in many parts of the A water and sanitation system costs money and, developing world have demonstrated that communities arc depending on the technology, requires a relatively large willing and able to manage and self-finance improved sum of upfront capital. The communities have to raise water supply and sanitation facilities. A feasibility study funds not only for constructing the systems but also for its conducted by Judd et al (1988), found that "the concept of operation and maintenance once the systems are installed. rural community self-financing for improved water and sanitation systems is highly feasible and desirable." The This NOTE on resource mobilization illustrates the major findings of the study include: various innovative ways communities have collected and raised funds for their water and sanitation systems in • Most of the rural communities surveyed have a great Indonesia. Besides providing labor for the building of the need for improved water systems and are willing to systems, communities collect available local material and self-finance them. contribute cash. To raise money they undertake a series of different activities. Among them are: collecting water • The desire for self-financing is greater in user fees; selling labor to fellow villagers; harvesting and communities with many income-generating activities selling local products, e.g. coconuts, bananas, seaweed because people have less time to fetch water and bamboo; selling animals; putting on cultural shows themselves. and films, collecting religious tithe (zakat), etc. In addition, several communities have obtained loans from • The concept of community self-financing is not new banks and credit for material from suppliers for their in rural areas; communities have long contributed for systems. construction of village roads, mosques, schools and other buildings. MOBILIZATION OF LABOR AND SKILLS • Communities are willing to approach banks for loans 1. Contribution of Labor (but need assistance for the initial visit). Communal activities and practices are common • The loan repayment capability of most communities occurances among the people in the rural community, is good, particularly if the loan period is two years or particularly in Java. People still work communally for longer. their own village development. Construction of village mosques, schools and roads are the best examples of RWSGËAP NOTES communal labor. People also come together to build organized shadow puppet (wayang kulit) shows and houses for their neighbors, especially those who are too tickets were sold to those who watched the show. Profits poor or too old to do so themselves. In many villages, from the sale of tickets for the show were donated to water communal labor is provided to construct improved water and sanitation projects. and sanitation systems. Based on a schedule set by the water committee in the village, groups of people come Films are popular with the villagers because they do not together to dig trenches, transport building material, get to see them too often. The village water committee of install pipes and build bathing and sanitation facilities. several villages organized film shows as fund-raiser events in open air theaters. Another popular form of 2. Collection and Use of Local Materials entertainment is music. The organizing of such events have also raised money for the villages. A community collects and uses locally available material as much as possible. Project materials, such as sand and 7. Provision of Services stones, are found in almost every village. Men, women and children are mobilized to collect these items. Providing services to people who want things done Appropriate technology, like bamboo cement is used in indicate another method of raising money. Village water construction to reduce expenses for purchasing expensive committees have organized voluntary work gangs to plow steel rods. rice fields of the wealthy fanners in the village. The wages were not kept by the workers but donated to the 3. Collection and Sale of Natural Resources water and sanitation projects. The resources of a coastal community is different from 8. Cost Sharing those of inland community. Seaweed, one of the valuable coastal resources, has been utilized by villagers of Eastern A major way of mobilizing resources for community water Indonesia. The seaweed is collected and sold for cash. and sanitation projects is to share the cost of the systems The water committees have also tried to cultivate seaweed. among households which will benefit from the water and Such activity is meant to ensure a continuous collection as sanitation services. The village water committee well as to get better quality and quantities of seaweed. calculates the cost of the total system and deducts cost of labor and local material. The remaining amount is 4. Sale of Animals usually the cash cost. The community leaders meet and decide how best to divide up the cost. A community that captures wild boars because they are a threat to agriculture can turn this into a source of funds Cost sharing has been implemented in several different for the project. Villages in West Java have utilized this ways. It is usually based on the socio-economic level of potential. None of the hunters receives any money from the household: this activity. They sell the animals to towns' people and donate all the money raised to the water and sanitation a. Households are divided into three to five project. socio-economic classes with the wealthier households paying more and the poorer ones 5. Small Scale Industry paying less. The combination of raw material and skill to produce b. Widows are exempted from paying cash but they bricks is a potential source of building material for the are expected to contribute their time and labor to water and sanitation projects. Possessing such a the collection of local material in the village. combination, the village water committees of several villages organized voluntary labor to produce bricks for c. Poor households pay very little cash or none at all the project. The production of bricks helped to reduce the but they are expected to provide time and labor to amount of cash required for the project. the construction of the systems. In some cases, poor villagers are even paid by the village water committees for their labor during construction. 6. Cultural Performances d. Households that request for installation to their Entertainment is another way to raise money. Generally, homes pay a higher cost than households using a people are willing to spend money for entertainment. The public facility. water committees of villages in West and East Java have RWSGEAP NOTES e. Payments are made with dînèrent time a. Water User Fee Fund: as described in the above requirements depending on the type of case, the money is loaned to neighboring technology chosen, the amount requested, when communities for the development of their funds are needed and the availability of cash. projects; this type of loan is usually interest-free. Some communities pay in monthly installments, others pay a certain percentage as a lump sum b. Arisan: this is an informal loan association and the rest in installments, and still others pay common to Indonesia and many Southeast Asian the entire amount at once. societies, particularly among women. The regular arisan meetings are just as much f. The system cost per household vary. Depending opportunities for socializing as they are for on the technology selected, type of installation generating scarce credit in villages. In some (public or private), the size of the system and the cases, water user groups contribute a set sum of socio-economic level of the household, the money at each meeting. A raffle occurs and a amount paid by communities thus far range from water user group is selected to receive the total Rp. 5,000 to Rp. 150,000 ($2 to $75) per amount collected; this money is then used for the household. construction of latrine facilities. 9. Donations c. Other Village Savings and Loan Associations: several water user groups of have taken out loans In rural communities, even the poor ones, there are always from Village Funds for the construction of their people who are economically better off than most. These sections of the water and sanitation systems. people can be approached for donations to water and sanitation projects. In some places, wealthy villagers have CONTRIBUTION OF MATERIAL AND KIND contributed Rp. 2,000,000 ($1,000) each to projects. 12. Collection/Sale of Agricultural Products Villagers who have moved away from the village can also be approached for donations. They usually have family Substitution of agricultural products for cash is possible in members or relatives still living in the village and are areas that use barter as an exchange system. Coconut, therefore interested in their welfare. These people have coffee and banana have been proven by some communities been very responsive and have contributed to the projects. in Eastern Indonesia to be a good source of fund raising for water and sanitation projects. Each water user delivers 10. Water User Fees a part of his/her agricultural products to the village water committee as his/her contribution for the project. Usually, All communities are expected to collect regular water user the amount delivered is the same as the cash contribution fees from households who benefit from the water and value. sanitation facilities. The water user fee is usually about Rp. 100 to Rp. 500 ($0.05 to $0.25) per month. The In a far-sighted move, the water committee of a particular money collected is sometimes kept in a savings account in village in East Java has requested that all water user a bank. This money is used for the operation and households plant fruit trees, e.g., bananas and melinjo (a maintenance of the installed systems. Sometimes, it is nut-bearing tree), for the financing of maintenance and also used for the village posyandu (mother and child repair of the water and sanitation systems. The harvesting health stations) activities. and sale of bananas will pay for short-term maintenance and repair whereas money from melinjo will pay for The water committee of several villages have also used the long-term plans of expansion and rehabilitation. funds from the water user fee for expansion of public bathing and washing facilities. In addition, the 13. Collection of Building Material committees have also loaned the money, interest-free, to neighboring communities in the development of their Similar to cost sharing of cash, households are frequently water and sanitation systems. asked to collect locally available material, e.g., sand, stone, wood, etc. The village water committee usually 11. Village Savings and Loan establishes the amount that each household should bring. If bamboo is available, then households are also requested Currently, there are three types of village savings and loan to cut and bring a certain number of bamboo poles. plans for community water and sanitation projects: LIBRARY IRC °O Box 93190, 2509 AD THE HAGUF Tel.: +31 70 30 689 80 Fax: +31 70 35 899 64 BARCODE: RWSGEAP NOTES 14. Livestock Loan c. As an investment loan the interest would be lower. Livestock is another potential funding source for the community project. Most villages have cattle, sheep or d. Collateral provided can be in various forms: i) goats. These animals can be "borrowed" from individuals land certificate; ii) user right certificate; iii) by the village water committee and sold to partially Governemnt employee's salary (e.g., teacher); iv) finance (he project. Repayment occurs at a later date and 45% of cash deposit; and v) movable property as is in the form of livestock. The committee will repay the agreed to by the bank. "loan" with a larger animal taking into account the "loan period" and the accumulated "interest" amount. e. Repayment can be monthly, quarterly or as agreed upon by both parties. 15. A Handful of Rice f. A grace period will be allowed. Contributing handfuls of rice for a community activity is a common form of donation in Indonesia. Known as 18. Village Cooperative Loans (KUD) jimpitan in West Java and perelek in East Java and NTB, a household puis a handful of rice every morning in a tin The local KUD cooperative can be a source of funds for can hung outside the house. A member of the village the water and sanitation projects. A community in West water committee will come by every afternoon to collect it. Java received a loan of Rp. 13,500,000 ($6,750) from its The collected rice is sold and the money used for KUD for the project. Wealthy households which get maintenance of the water systems. private connections are requested lo repay a sum of Rp. 100,000 with Rp. 50,000 as the first payment and the 16. Religious Tithe (Zakat) remaining Rp. 50,000 spread over 10 monthly installments. It is preferable to get a KUD loan if the Zakat is a religious tithe where members of a Moslem interest rate is the same or lower than a bank loan. community are obligated to contribute ten percent of their income for the support and maintenance of social services 19. Local Revolving Fund in the community. The water committees of West Javanese villages used the zakat as a way to mobilize The availability of funding from local groups can also be resources for their water and sanitation projects. For mobilized for the community water and sanitation areas where cash was scarce, households agreed to projects. A community in West Java has received a loan contribute ten percent of their agricultural products from of Rp. 5,000,000 ($2,500) for its project from a revolving every harvest until the project was completed. fund managed by a local voluntary organization. The loan when repaid by the community will revolve lo BANK LOANS AND OTHER CREDIT another community. 17. Bank Loans 20. Credit for Project Materials Loans from Banks are good sources of upfront capital for Most rural communities have experience with taking water and sanitation projects in communities which have goods on credit and repaying with cash in installments. the loan repayment capability. Several communities have Several communities in West Java and East Java have taken out bank loans for their projects. taken project materials, like cement and pipes, on a credit basis from material suppliers. Communities repay Progress has been made with local banks and credit suppliers within a period of two to six months. institutions in the promotion of water and sanitation projects. The conditions for the loans are also more flexible than before. Some banks have agreed to the following conditions for a loan; For more information on RWSGFAP NOTES contact Mary Judd a. Communities may borrow for water and at UNDP/World Bank Water and Sanitation Program sanitation projects. P.O. Box 1324/JKT, Jakarta, Indonesia Tel.: (62-21 ) 252-0606; Fax: (62-21 ) 252-0432 Email: reap@worldbank.org@inteniet b. The loan can be considered an investment loan rather than one for consumption.