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FROM BENEFICIARIES TO BUSINESSES TO THE BIG PICTURE

Monitoring Market-Based Approaches to Sanitation Development

Monitoring Sustainable WASH Service Delivery Symposium

Addis Ababa, Ethiopia

April 10,2013

David Sparkman

Global Program Analyst-Sanitation

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BACKGROUND

“Sanitation as a Business” • What? – Sanitation Market Development,

Sanitation Marketing, etc. • Why? – Market incentives, market proclivity for

growth, sustainability focus• Where? – Malawi, Uganda, Rwanda, Bolivia,

Peru, Ecuador, India, Guatemala• When? – Paradigm shift internally in 2008,

larger-scale change in strategy 2010

Diagram thanks to Bill & Melinda Gates Foundation 3

BACKGROUND (CONTINUED)

• How? – Supporting businesses along sanitation value chain, identifying finance opportunities. Minimize direct subsides

• With Who? – Business Development Service (BDS) providers as key implementers; identified sanitation entrepreneurs; (recently) MFIs,

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SOME CONTEXT AND CAVEATS

• Presenting a proposed strategy for monitoring (for discussion, feedback), not a final product with results, analysis, etc.

• Not a justification for the potential and limitations of the sanitation-as-a-business program model at this stage

• Limitations of this monitoring already identified (primarily around sustainability of monitoring itself):

– Government is not directly involved (although results and development is shared with them)

– Too many indicators– Water For People is paying for all of it

• Overall Goals:– Program and Strategy Evaluation– Leading Indicators

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HOW DO WE ATTEMPT TO MONITOR SANITATION AS A BUSINESS?

Three Levels:

1. Household

2. Key actors: Service Provider / Business (and/or finance institution if applicable)

3. Big Picture : The overall Sanitation “Ecosystem”

Thanks to IRC’s sanitation service levels for inspiring much of this framework 6

LEVEL ONE: HOUSEHOLD

• Level of Sanitation Service Access– Household is scored on

different indicators via surveys, observations

– Level of Access to a facility– Use– State of infrastructure– Sludge management – Satisfaction– Identified Problems, ease of

maintenanceFuture monitoring (2013): Customer Satisfaction and household socio-economic profiles

Color LabelBlack No Sanitation Service

RedInadequate Level of Sanitation Services

Orange Basic Level of Sanitation Services

YellowIntermediate Level of Sanitation Services

Green High Level of Sanitation Services

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LEVEL TWO: BUSINESS (SERVICE PROVIDER)

Activity Business A B C D E F Total

Pits and Septic Tanks Emptied 47 24 45 44 12 5 177

Drums Emptied 172 80 192.5 136 88 35 703 .5

Pit/Septic Emptying

Turnover (MWK)618,200 336,500 684,011 573,000 261,065 155,000 2,627,776

Number of Low Income Areas

reached4 2 6 4 2 2 10

Staff Utilization 3 4 6 4 3 3 23

Transport Costs for Sludge (MWK) 81,000 88,500 161,350 87,275 48,000 35,000 501,125.00

Dumping Costs (MWK) 51,250 11,100 28,850 20,450 13,400 1,800 126,850.00

Wages Paid (MWK) 141,000 118,500 143,359 159,000 24,000 20,000 605,859.00

Latrines Constructed 2 4 1 7

Value of Latrines 240,000 480,000 120,000 840,000.00

Investment Made into Business

4,217,500 2,000,000

Sampling of Supported-Business Monitoring in Malawi

Table: 2012 Monitoring of SACCO in rural Uganda 8

LEVEL TWO (CONTINUED)

• Almost 50 supported businesses / service providers in six countries (India, Peru, Bolivia, Malawi, Rwanda, and Uganda)

• 4-5 general business models in both rural and peri-urban areas• 5 financial entities that have provided sanitation loans

Months August September October November December

Number of latrines built by month

6 8 12 - -

Number of loans taken out, and the amounts

6 – 2400,000 4 – 3200,000 9 – 3600,000 - -

Number of orders for latrines

12 16 21 20 6

Amount of loan paid back to SACCO, by customers, by month

- - 75000 25000 50000

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LEVEL THREE: “THE BIGGER PICTURE”

Evaluating components of the overall sanitation market “ecosystem,” and how well different market functions are being carried out and sustained:

Sustainability of people carrying out roles:• Motivations/Incentives • Capacity• Who should be carrying out

the roles, who is paying for them to be carried out

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LEVEL THREE—BIG PICTURE (CONTINUED)

Some components that are evaluated: – Demand Creation (and Sustention) – Supply of services and support functions (along entire chain)– Government playing appropriate role (public sector enabling

environment)– Finance alternatives available

• For service providers• For households

– Treatment– M&E– Level of dependency on outside aid

Future : Market share/penetration of supported businesses based on theoretical demand, ROI--cost/benefit evaluations of intervention

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CONCLUSIONS AND NEXT STEPS• Monitoring the sanitation market

ecosystem is complex– Difficult to replicate “results”,

objectivity– Difficult to sustain –affordability– Plausible attribution

• However, counting toilets as the only outcome does not shed light on sustainability prospects, nor hindrances

• Focus on balancing these issues, and identifying:

– Leading indicators– Partners

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• Other organizations active in this type of approach in sanitation: iDE, WSP, PATH, WSUP, WaterAid

• IRC• Bill & Melinda Gates Foundation• Market-based development orgs

in general: DCED, M4P/Springfield

• Colleagues at Water For People• All of you—for your attention,

feedback, questions and comments--Thanks!

Acknowledgments and other Resources on Sanitation Market-Based Development