Innovative financing in the new South Africa

The Mvula Trust ("Mvula" is Zulu for "rain") is an independent South African social investment fund specifically dedicated to the improvement of water and sanitation services amongst poor and disadvantaged communities. The Trust began operations in August 1993 and offers both a grant and loan finance facility. The Trust's capital base derives from its founders. More latterly the South African Government, in particular the Department of Water Affairs and Forestry, and other national and international agencies also provide financial support for Mvula projects. The purpose of this paper is to provide a brief overview to the Trust's operating and financing policies. The Trust provides an alternative approach to funding the improvement of services amongst poor and marginalised communities which may have application in other countries where centralised, supply-driven approaches have failed to achieve sustainable services.