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Innovations for Poverty Action (IPÄ) 2009

Encouraging Adoption of Rainwater Harvesting Tanks Through Collateralized Loans in Kenya

Rainwater Harvesting Tanks

Innovations for Poverty Action

Titre : Encouraging Adoption of Rainwater Harvesting Tanks Through Collateralized Loans in Kenya

Région /Pays : Kenya

Date : 2009-2012

Almost 80 percent of the Kenyan population lives in rural areas, where many suffer from significant water constraints. About 96 percent of cropland in Kenya is rain-fed and the rains are both seasonal and unpredictable. In recent years, much of rural Kenya has been hit by extreme droughts, which can be particularly problematic for dairy cattle, which require a consistent and regular water supply. Dairy farming is common in Kenya’s Central and Rift Valley provinces, the sample area for this study. The smallholder dairy farmers in the study sample had an average herd size of two cows, but 32 percent of households reported loosing at least one cow to drought in the year prior to the study, and 52 percent of households had a cow get sick. Without easy access to water, sample farmers reported spending a considerable amount of time (ten hours per week) taking cows to a water source. Technologies, such as rainwater harvesting tanks, that help to give dairy farmers reliable and convenient access to water, could improve their productivity and other economic outcomes.

Présentation _ Researchers used a randomized evaluation to examine the effect of asset collateralized loans on the take-up of rainwater harvesting tanks and any subsequent impacts on dairy production, time use, or girls’ enrollment in school. In partnership with a local dairy cooperative, researchers offered smallholder dairy farmers in central Kenya a loan to purchase a durable, 5,000-liter rainwater harvesting tank. The market price of the tanks at the time of the study was Ksh 24,000 (US$320), or roughly 13 percent of annual total household consumption in the sample. A full tank would last between 17 days and 6 weeks depending on whether the water was used for livestock, domestic use, or both. From a sample of 3,000 farmers who sold milk to a local dairy cooperative, researchers randomly assigned 1,804 to receive one of four initial loan offers. The value and terms of the loan were the same for all four offers : the loan could only be used to purchase a water tank, the value of the loan was set equal to the market price of the tank (US$320), and all borrowers had to make a minimum deposit of Ksh 1,000 (US$15).

Echantillon 1,804 dairy farmers

Partenaires  : Georgetown University - Harvard University – Porticus - Massachusetts Institute of Technology

Innovation for Poverty Action (IPA)

Page publiée le 25 août 2018