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THE CHALLENGE
can reduce the rate of diarrhea infections by up to 37%,1 which would save hundreds of thousands of lives in Bihar alone.
A latrine producer in Bihar,
India is growing his
business to meet
increased consumer
demand.
© Katharine McHugh
PROGRAM BRIEF
Strengthening the Supply Chain
for Sanitation in Bihar, India Supporting Sustainable Sanitation Improvements (3SI)
.
MAPPING THE SANITATION LANDSCAPE In collaboration with Monitor Group, PSI conducted a survey to better understand the sanitation landscape in Bihar. By holding interviews with key stakeholders such as government officials, NGOs, industry experts, suppliers, and of course the households themselves, 3SI was able to gain a deep understanding of the existing market for sanitation and the barriers both suppliers and consumers faced. Monitor and PSI synthesized the findings into a series of frameworks that provide key insights into the function each stakeholder performs in the market for sanitation, and how directly or indirectly they enable a purchase decision. This information enabled 3SI to target key players in the design of its pilot business models.
UNDERSTANDING THE SITUATION Globally, some 1.8 million children die every year as a result of diarrhea and other diseases caused by unclean water and poor sanitation. 450,000 of those deaths are in India. Within India, the state of Bihar has some of the poorest sanitation indicators: 88% of rural households and 36% of urban households have no toilet facilities whatsoever. Studies have found that improved sanitation alone can reduce the rate of diarrhea infections by up to 37%, which would save hundreds of thousands of lives in Bihar alone. Through formative research described in further detail below, PSI identified three main barriers to sanitation access in Bihar: 1) Unavailability of affordable, quality toilet technologies that consumers aspire to own, 2) Fragmented supply chain that is difficult for households to maneuver, 3) Lack of options for financing for both households and enterprises.
PSI RESPONDS Launched in 2012, 3SI is a 5-year 3SI program funded by the Bill and Melinda Gates Foundation, which aims to:
Create sustainable business models for increasing supply of sanitation products and services through the private sector
Increase demand for improved sanitation products and services including fecal sludge management
Since 1990, PSI has worked in India to improve the health of Indians through interventions in WASH, malaria, child survival and reproductive health. PSI/India works with both the private and public sector to leverage the expertise and resources of each to maximize health impact.
The Sanitation Ecosystem, from the
consumer’s perspective in Bihar.
© Monitor 2013
TESTING BUSINESS MODELS The willingness of the private sector to invest in the
sanitation market depends on many factors such as profit
margins, capital required, risks, and opportunity for repeat
business. Entrepreneurs need to see demand; in other
words, a significant potential return on investment to
engage in the relatively new sanitation sector.
With these observations in mind and building on the findings
from the landscape research, 3SI developed several
business models, which were tested with local
entrepreneurs. In one model, the Turn Key Solution
Provider (TSP), a single enterprise supplies consumers with
all of the products and services related to toilet construction
at a specified quality and price. This is commonly referred
to as a “one stop shop” model. PSI supports TSPs through
capacity building, access to credit and demand generation.
Second, is the Cement Ring Manufacturer Plus (CRM+)
model, in which customers purchase cement rings and a
toilet pan – the core components of a toilet – from existing
concrete ring producers. These entrepreneurs are trained in
quality product and service delivery, but also serve as guides
to the consumer to help them identify the additional
materials needed to construct the rest of their toilet and
where they can acquire them. PSI-sales agents conduct
sales seminars and door-to-door visits to build awareness
and create demand for the enterprises’ products.
3SI is currently scaling its models across the state of Bihar
and has trained over 429 entrepreneurs to run successful
businesses and provide high quality sanitation solutions to
households at fair and affordable prices.
PRODUCT DESIGN During the initial market research, 3SI determined that the
latrine product offering in Bihar did not adequately meet the
consumer’s needs and aspirations for sanitation.
PSI partnered with PATH, whose experience researching,
developing, and deploying market-based solutions for water,
sanitation, and hygiene applications was used to identify and
design improved toilet designs that met the needs (e.g., health,
aspiration, usability) of the low-income consumers of Bihar.
In the product survey, PATH found that participants responded
well to features that improved the quality of experience such as
lighting, ventilation, and thick, sturdy roof and walls. Privacy for
women while both defecating and bathing was a key need as
well as storage for menstrual hygiene products.
Furthermore, while the government has spread awareness of the
dangers of open defecation, 3SI found there is a lack of clear
understanding of the dangers from latrine pit overflow or
seepage. Developing a substructure (pit) design that is flexible in
use of space but also avoids direct discharge of effluent into the
environment was necessary.
Participants share
their preferences
for shelters
© PATH 2013.
FECAL SLUDGE MANAGEMENT In order for a sanitation market to be sustainable, it must include
long term, complementary services such as cleaning and pit
emptying. Recognizing the need for a fecal sludge management
(FSM) service, 3SI sought to make safe disposal an attractive
investment to businesses and affordable to households. Building
off of the research already conducted; 3SI is working in partnership
with the government, sewage tanker operators and a locally-
owned private sewage treatment plant to deliver pit-emptying
services to Bihar. In addition, 3SI continues to work closely with
PATH and Water For People to improve designs for how the waste
is captured, such as an improved septic tank.
To date 3SI has facilitated the safe collection and disposal of over
5 million liters of fecal sludge, and has reached nearly 1,063
households with emptying services. As awareness of affordable,
professional fecal sludge management services increases in Bihar,
3SI anticipates that demand will increase not only for the services
but for toilets as well.
“When material is very good, even if it is made thin, it would last long and stay strong. If the material is not good,
even if you make thick roof, still it would be of no use.” -Example response from villager during
PATH survey on latrine shelters
In the landscaping study, Monitor conducted in-depth
interviews with consumers in order to gain a better
understanding of the barriers and motivators to sanitation
behaviors in the target districts. 3SI incorporated these
insights into its initial marketing strategy to increase consumer
demand for sanitation products and services.
A significant finding that was unveiled immediately during
implementation, however, was that while households
expressed willingness to pay for a toilet, they did not have
the necessary cash on hand to purchase one at this time.
3SI has reached over 77,000 households through the sale of
the toilets attributed to its market facilitation work. Almost
half of these are reported to be sold to the below poverty line
households.
In order to tap into this demand, 3SI seeks to repair the
supply chain for financing for sanitation, which includes
simplifying the process to access existing direct-to-
household government subsidies, as well as to work with
local microfinance institutions to increase the availability
and awareness of loans for sanitation.
With generous contributions both from the Bill and Melinda
Gates Foundation as well as the Unilever Foundation, 3SI is
currently testing a financing model, which has facilitated
over 16,184 household loans for toilets, as well as supported
more than 120 of its enterprises to access capital financing
to expand their businesses.
©PSI India
This table is an example of the findings from the market research phase.
© Monitor 2013
NEXT STEPS In 2016 3SI continues to learn, collaborate and share lessons learned in order to provide sustainable sanitation in Bihar.
3SI began toilet sales in August 2013 and to date has seen the sale of over 77,000 toilets (October 2016). 3SI partners Water For People and PATH continue to iterate and test improved sanitation products to further drive down costs and 3SI is now linked with several microfinance institutions and a fund manager to scale up its financing work. Additionally, in order to ensure post-purchase use of 3SI project toilets, the team is rolling out a behavior change communications strategy to create a social norm around toilet use. Through 3SI, PSI continues to demonstrate the viability of market-based approaches to sanitation and the massive potential they hold to improve the livelihoods of the people of Bihar, and across the globe.
CREATING DEMAND