Piloting of a market-based approach to rural

sanitation in Vietnam

EASAN Vietnam Task ForceNovember 2007

Background

• Challenges in achieving MDGs & national targets for sanitation with conventional approaches

• Resources available from community and private sector

• Potential market for sanitation

The Project• Some figures:

– 3 years (2003-2006), US$ 538,000 (DANIDA), IDE supported

– 30 coastal communes, 6 districts, 2 provinces– 54,000 rural families, 19% poor

• Two research questions:(i) would rural families invest in latrines when a

range of low-cost models are available?(ii) can promotional campaigns influence

household decisions to invest and change their sanitation practices?

The Approach• Treat poor people as potential customers,

rather than recipients of charity No material subsidy or handout

• Using business principles to facilitate unsubsidized market systems in which the rural poor can participate Project to be implemented through profitable private sector/small micro enterprises

Conventional vs. MarketBased Approaches

Conventional Approaches Market-based ApproachesHeavy subsidies for capital cost Subsidies for market

development. Full capital cost recovery from users

Standardization of models A range of affordable optionsDecision making by external agencies

Users decide what and how to buy

Focus on infrastructure target Focus on behavioral targetsFocus on centralized service provision

Focus on diversified local service provision

Project ProcessesSituational Analysis1

Market Assessment2

Development of Market-Based Solutions3

Monitoring & Evaluation5

Implementation of Interventions4

Key Market-Based Activities• Conduct market assessment• Select/adapt appropriate technology options

for the poor• Build capacity for private sector service

providers (local masons)• Develop, test and deliver marketing

campaigns to stimulate demand and adoption of hygiene practices

• Facilitate demand-supply linkages

Supply

MasonMason

MasonMason

MasonMasonDemandHHHH

HHHH

HHHH

HHHH

HHHH

HHHH

HHHH

HHHH Household without a hygienic latrine

Implementation StructureDistrict Steer. Com.

Commune Steer. Com.

Commune Steer. Com.

VP VPVP

VPVP

VP Village Promoter

Project Results• Coverage increase: from 16% (2003) to

46% (mid 2006)• ~16,000 latrines/per year: ~4 times

compared with average previous 4 years• Families invested more than USD 1 million • Leverage ‘Project : Household’ ratio = 1:2• 90 masons involved: 250,000 USD profit

Lessons Learned• The market-based approach CAN work for

sanitation: Poor people’s willingness to pay can be

stimulated Local private sector can respond to

market demands• Market-based approach shown to be

more cost-effective and sustainable

Way Forward• Test/pilot ways to scale up recommendations in

the WSP-supported study 2005 (not initiated yet)

• Test scaling up at the provincial level (initiated in one northern province)

• Replicating market-based approaches to very poor, ethnic minority communities (on-going in a central province)

• Disseminate to other countries (planned for Cambodia next year through SAWAP)

Challenges to Scaling-up

• High degree of segmentation requires tailored strategies and designs

• Limited buy-in from social sector• Limited grass roots level implementation

capacity

Never underestimate the poor’s willingness to pay!

Thank you!