Module-c community Based Financial Management

Procedure
 
 WASHCO submits a letter of application to WWO 
 Upon an official acknowledgement of the letter of 
application by WASHCO, the WWO issues a supporting 
letter to a financial institute. 
 WASHCO goes with cash to the designated financial 
institute with the official supporting letter for opening an 
account. 
 WASHCO is given a bank account book or statement by 
the financial institute. 
Tips!
 

Minimum requirement of cash to open a bank account. 
It is said that Birr 500 is required to open an account in a 
certain bank. Some cases can be shared herewith to 
respond to such conditions. 

Formulation and collection of seed money. Some of 
WASHCO succeeded in meeting this minimum 

---

Ministry of Water, Irrigation and Electricity 
 Operation and Maintenance Management Manual 
Training Module - D 
Community Based Financial 
Management 
 
DEMEWOZ CONSULTANCY 
38
requirement of Birr 500 through collection of seed 
money. In this case, each registered household shall 
contribute equal amount of money to form group fund. 
For instance, there is a case that more than 50 
registered households accumulated Birr 500 through 
even contribution of Birr 10 per each household. 
Step-5: 
Develop a 
Risk Mitigation 
Plan
 
 
1. Brainstorm on the risks to the WUA revenue. Document risks on flip chart. 
Risks to consider include: 
 Defaulters, illegal connections, burst pipes, vandalism 
 Low water quantity/yields in dry spell 
 Identify causes of these challenges 
 Double receipt books and other corrupt practices 
 Discuss any other challenges that affect revenue base 
2. For each risk, identify steps that can be taken to mitigate the risks. Steps to 
be considered include: 
 Written warnings to the culprits 
 Effective monitoring and evaluation mechanisms 
 Disconnections and penalties for reconnection 
 Customer contract 
 Improving customer care 
– complaints box 
 By-laws 
Review 
 What is the main risk to the WASHCO revenue? How has this risk been 
mitigated? 
 What happens to the water supply scheme if the revenue is less than 
required? 

---

Ministry of Water, Irrigation and Electricity