Evaluating the potential of microfinance for sanitation in India, 2013.
Sophie Trémolet, T V S Ravi Kumar. SHARE.
This case study investigates how household financing for sanitation can be mobilised via microfinance institutions and commercial banks in order to accelerate sustainable access to sanitation facilities and/or services. The research (conducted in India between May and June 2011) sought to document existing experiences in providing microfinance services to households to allow them to invest in sanitation solutions that meet their needs. The objective of the research was to map out the existing provision of microfinance for sanitation, identify where opportunities for future market development lie and identify how the development of such a market could be fostered (through the targeted use of public funds or regulatory changes for example).
This research has identified that there is potentially high demand for sanitation microfinance in India, due to a combination of factors. Coverage rates remain low (particularly in rural areas) and national policies emphasise household investments (combined with subsidies in some cases, such as in the Total Sanitation Campaign which provide ex-post subsidies once the household has made the investment, hence the need for pre-financing). By 2010, only 31% of India’s population had access to improved sanitation facilities (WHO/UNICEF, 2010).
This blog is a response to the video posted by Matt Damon, co-founder of water.org, where he announces a toilet strike to raise awareness for the water crisis.
I enjoyed your video on water.org about going on a toilet strike. It is great that you are so passionate about realizing access to safe water, sanitation and hygiene for all. I personally also like it that you bring in some humor into our sometimes very boring sector.
In your video you mention that it costs US$25 to provide a person with sanitation for life. This is not true. Over the past four years IRC’s WASHCost project in Burkina Faso, Ghana, Andhra Pradesh (India) and Mozambique has collected, validated and analysed cost and service level information for water, sanitation and hygiene. Based on this research we know that for US$ 25 you can construct a traditional pit latrine with an impermeable slab which provides a basic service. In order to sustain the service provided by that traditional pit latrine it costs between US$ 1.5 and US$ 4 per person per year – so to provide sanitation for life means finding that US$ 1.5-4 every year …. for life. If you do not know how, or by whom, these recurrent costs will be financed, it is very likely that the latrine you are constructing today will break down or not used within two to three years, wasting your investment.
Terra Preta soil. Photo: TUHH
This conference brings together experts from different sectors – water/sanitation, agriculture, soil, energy and health – to share experiences in the new field of Terra Preta Sanitation (TPS). TPS is being promoted as integrated sustainable solution to address poor sanitation, food insecurity, and soil degradation. It is inspired by the discovery of the anthropogenic ancient soils in the Amazon called Terra Preta.
Sanitation Markets: Using economics to improve the delivery of services along the sanitation value chain, 2012.
Sophie Trémolet. SHARE.
In summary, a number of actions could be undertaken based on these findings:
- Make the case for investment in sanitation;
- Channel financing more effectively and increase the effectiveness of public funding;
- Foster demand for sanitation at all levels of the value chain;
- Influence the restructuring of the provision of transport services for on-site sanitation, particularly by formalising small-scale private providers,
- Estimate the value of the various sanitation by-products and identify ways of monetizing such value in a sustainable manner through reuse.
In order to support future actions, key areas of research should be explored, including:
- Improve the estimates of the benefits of investing in sanitation and compare the benefits with the costs of sanitation in a broader range of countries and local contexts, as well as evaluate the cost-effectiveness of alternative investments;
- Identify the most effective financing mechanisms, including ways of attracting new resources into the sector (e.g. from beneficiaries) and via re-use and overcoming the affordability constraint;
- Identify ways of stimulating demand and overcome information asymmetry for households, entrepreneurs or even the government;
- Identify ways of organising service provision and scaling-up of small-scale entrepreneurs.
Sanitation economics research has a critical role to play and should be fostered. On this basis, budding and ineffective sanitation markets can be transformed into thriving markets where the full value of sanitation by-products is fully realised and reinvested into the system so as to foster increased investments and generate efficiency gains.
The study presented in October through the blog post: “Fecal Sludge Management: A smelly but fruitful business”, is now available.
The study was funded by the Bill & Melinda Gates Foundation and is entitled “Business analysis of fecal sludge management: emptying and transportation services in Africa and Asia”. The purpose of the study is to analyse the fecal sludge management (FSM) sector and its operating models in 30 cities across 10 countries. 2.1 billion people in urban centres use non-piped sanitation facilities and unavoidably require the emptying of fecal sludge (see picture below). Mismanagement of FSM represents a serious threat to public health and the environment.
The study also aims at filling the important information gaps on this business sector, which is often unregulated and leads to situations where households pay excessive fees for these services or are compelled to undertake emptying manually exposing themselves to serious health hazards.
Chowdhry, S. and Kone, D., 2012. Business analysis of fecal sludge management : emptying and transportation services in Africa and Asia. Seattle, WA, USA: Bill and Melinda Gates Foundation. 116 p.; 47 fig.; 22 tab. With bibliography p. 115-116
Available at: <http://www.washdoc.info/docsearch/title/179741>
By Pascal B. Garde, Consultant, WASH Policy and Governance, @GardePascal
Sustaining sanitation is much more expensive than building latrines. The 20-year cost of sustaining a basic level sanitation service per person in certain countries is anywhere from 5-20 times the cost per person of building the latrine in the first place.
This is one of the key findings on costing sustainable sanitation services, which are being highlighted in the first month of the WASHCost campaign. The campaign was launched on 24 October, and every month until March 2013, it brings a roundup of fast facts from the WASHCost research project, experiences from several organisations which are using the life-cycle cost approach and ways to get involved.
Posted in Africa, Campaigns and Events, Economic Benefits, Publications, Sanitary Facilities, South Asia
Tagged finance, IRC International Water and Sanitation Centre, irc's approach, life-cycle costs, sustainable sanitation, sustainable sanitation services, WASHCost