Question 76 from UPSC CSE 2021 - Economics

Question

With reference to 'Water Credit', consider the following statements:
1. It puts microfinance tools to work in the water and sanitation sector.
2. It is a global initiative launched under the aegis of the World Health Organization and the World Bank.
3. It aims to enable the poor people to meet their water need without depending on subsidies.
Which of the statements given above are correct?

Accepted Answer

Correct Option: C. 1 and 3 only

Strategy: Select statements 1 and 3. Statement 1 is correct because it accurately describes the microfinance tools used by Water Credit. Statement 3 is correct because it aligns with the program's focus on self-reliance through loans, not grants. Statement 2 is incorrect due to a factual error in institutional attribution.

Key Info: WaterCredit is an innovative microfinance-based program pioneered by Water.org, a global non-profit organization co-founded by Gary White and Matt Damon. This initiative enables low-income families to access small loans specifically for water and sanitation improvements in their homes.

**Key Features:**
- WaterCredit leverages microfinance institutions (MFIs) by offering technical assistance and partnerships that allow them to include water and sanitation loans in their portfolio.
- Families use these microloans to construct water connections, toilets, or sanitation infrastructure, and repay over time, fostering a sustainable model where repaid loans are recycled to reach additional families.
- This approach reduces dependency on direct subsidies, empowering beneficiaries to solve their own water and sanitation challenges with dignity.
- WaterCredit is not affiliated with or launched under the aegis of the World Health Organization (WHO) or the World Bank, though these organizations may have separate global initiatives in water and sanitation.
- WaterCredit operates across several countries, including India, Bangladesh, Kenya, and others.
- The significance of microfinance in the water sector lies in supplementing gaps where government subsidies or conventional aid models are inadequate or not sustainable, encouraging long-term community participation and responsibility.
- Water.org also coordinates with local NGOs and governmental bodies to ensure proper support and technical knowhow for communities.

Water.org, the founder of WaterCredit, continues to innovate in water financing and is regarded as a leading player in this domain.

Answer

Option A: 1 and 2 only

Answer

Option B: 2 and 3 only

Answer

Option D: 1, 2, and 3