Study Explores the Complexities of the Sanitation Marketplace

A barrier to scaling sanitation markets―for example an inadequate pool of entrepreneurs―can be overcome by engaging existing businesses such as this concrete product manufacturer in Cambodia. Photo credit: FSG

If you thought that sanitation marketing required only the connecting of customers, products, and financing to succeed, then you may wonder why it has proven so challenging to take this intervention to scale. 

It turns out, “Not only is scaling up market-based sanitation hard work, it takes time,” according to Rishi Agarwal, the presenter of the recent webinar on Scaling Market-Based Sanitation that discussed findings from a USAID Water, Sanitation and Hygiene Partnerships and Learning for Sustainability (WASHPaLS) project desk review. Agarwal is a managing director of FSG and lead author of the study.

The study systematically reviewed available market-based sanitation (MBS) literature and identified only 18 single-country, truly market-based interventions that scaled to at least 10,000 toilets. “A fairly low bar for scale,” says Agarwal; he adds, however, that “five of the interventions studied did reach a scale of 100,000 toilets.” 

Despite the challenges, researchers identified common threads they believe other interveners can leverage to help scale market-based sanitation. They presented a framework to better understand how sanitation markets work and to diagnose and problem-solve for the barriers to scale across the sanitation market system. 

Agarwal walked participants through the framework, which divides the sanitation market system into a core sanitation market (comprised of enterprise, customer, and entrepreneur) that functions within the business environment and the broader context. Barriers to scale exist at all levels, but no one barrier is more important than another in terms of determining success of the sanitation market, rather, the various barriers are dynamic in nature. “As you address one barrier, others might pop up and/or become more important,” notes Agarwal. 

Among the key findings related to sanitation markets: even when entrepreneurs exist and have access to supply chains for raw materials, such as cement, the business environment may still be problematic. This is where the government, donors, and funders need to step in because influencing the business environment is difficult for entrepreneurs. Also, a key point along the continuum to adopting improved sanitation is often overlooked: demand “activation”: the step between demand generation (or triggering) and demand fulfillment (or supply) to convert a customer’s newly triggered motivation to end open defecation into a purchase of a toilet from the market. 

Taking a closer look at barriers facing customers, affordability and liquidity are major constraints. The researchers pointed to evidence that combining carefully designed subsidies with MBS approaches can allow for coverage of lower income segments without distorting prices.

This illustration represents the framework WASHPaLS developed to diagnose and problem-solve barriers to scale across the sanitation-market system.

Availability of entrepreneurs, their access to capital, and long-term business viability are all potential constraints to growing a sanitation market. The webinar illustrates how interventions leverage existing entrepreneurs in adjacent markets to address the availability barrier and goes into detail on how to address the access to capital and viability barriers.

The discussion of the framework concluded with a look at the broader context and barriers that tend to be beyond the control of an MBS program—social norms, challenging terrain, population density/dispersion, and transportation infrastructure. 

Finally, the webinar covered implications of this research for funders, implementers, and governments and concluded with a list of recommendations.

A robust Q&A session followed the presentation where participants had an opportunity to question a larger panel: Agarwal, WASHPaLS Project Director Morris Israel, Deputy Director Jeff Albert, and USAID Environmental Health Team Lead and Senior WASH Advisor Jesse Shapiro.

Want to learn more? Listen to the full web recording or download the desk review

By Wendy Putnam, Communications Lead for the USAID/E3 Bureau Water Office’s Water CKM Project

Blog
Publication Date: 
24 Jul 2018
Author: 

Wendy Putnam

Produced By: 
Water CKM Project
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