Designing the Next Generation of Sanitation Businesses (2014)

 

Summary

Two and a half billion people still do not have access to improved sanitation. This situation has dramatic consequences on health: the World Health Organization estimates that diseases related to unsafe sanitation are responsible for 6% of global deaths. The development community has been devoting increased attention to this crisis, but the Millennium Development Goal sanitation target will likely not be reached by 2015.

Fortunately, a number of market-based models have emerged in both rural and urban areas to address the sanitation crisis. They all serve the BoP in a sustainable manner by offering improved solutions, at a price that the poor are willing and able to pay. In this report, we analyze 2 models that combine an aspirational value proposition for low-income families and a strong potential for financial sustainability: projects that facilitate the creation of a local, sanitation market in rural areas and enterprises servicing home mobile toilets in urban areas.

Based on an in-depth analysis of 12 projects representative of these 2 models, the report suggests strategies to overcome challenges to sustainability and scale. Finally, the report explores how these models would benefit from corporate and industrial expertise and resources, opening up opportunities for large corporations to contribute to solving the sanitation crisis.

Key Insights

Rural areas

  1. Many projects globally work at facilitating the creation of local, rural sanitation markets. These projects have demonstrated that there is a large untapped solvable demand for improved sanitation in rural areas

  2. The organizations that lead market-activation projects in rural areas are mostly dependent on grants. In addition, their intervention is needed for much longer periods of time than initially anticipated. These projects therefore need to find ways to generate revenue themselves, if they want to scale up further without requiring a large, unrealistic amount of grant support

  3. Few market-activation projects manage to effectively provide end-consumer financing solutions even though this is a key hurdle to a purchase

  4. Recommendations to overcome these challenges include switching from a “market-activation” to a “social business” model, by generating revenue out of the sale of products or services. Download our full report to learn more. 


Urban Areas: 

  1. Although some innovation has already taken place in terms of the toilet design, more hygienic and odorless solutions need developing to improve customer experience, lower the cost of waste storage (bags or liquid chemical) and allow for easier handling and cleaning

  2. Waste collection at scale would require deploying very large teams of low-skilled, part-time workers circulating in informal urban settlements

  3. Transport and logistics are challenging to organize in areas with poor infrastructure, especially under time, storage and accessibility constraints

  4. Renting home mobile toilets versus selling them implies operating frequent payment collection, which needs to be performed regularly by a dedicated team

  5. Potential solutions to these challenges include using Information and Communication Technologies (ICT) to optimize and manage sales, payment and waste collection operations at scale. Download the full report to learn more.