60193 NOVEMBER 2010 Sanitation Market Development: A Head Start for Healthier Living ABOUT THE AUTHOR ROKEYA AHMED Given a choice, poor people in Bangladesh would like to be treated the same is Water and Sanitation as any other consumers who go to the market, assess all the options, and Specialist, WSP­South Asia, based in the World Bank's then make their purchases--either with a lump-sum payment or through an Dhaka office. She leads the Bangladesh rural sanitation installment plan. Even with an interest component, installment buying gives program of WSP as task them greater economic liberty. The Water and Sanitation Program (WSP) not manager. only facilitates this economic liberty, but, more importantly, it also promotes APPROVING MANAGERS sanitation reform through affordable means of waste management that Christopher Juan Costain, Principal Regional Team Leader include hand washing, waste management, and sustainable latrine options. for South Asia, Water and Sanitation Program. To promote the sustainability of the sanitation program, with the aim of scaling up, WSP designed and implemented a small project--Scaling Up and Jaehyang So, Program Manager, Water and Sanitation Sustainability of Total Sanitation in Bangladesh (SSTSB)--from April 2008 to Program. March 2009 (see Box 1). As a result, rural consumers in the five piloted villages of Jamalpur district (Mohanpur, Ghoradhap, Chandpur, Chontia, and Kalibari) now can choose from among 20 latrines that cost from Tk 400 to Tk 20,000 ($5.50 to $290), hand-washing devices (from $.60 to $7), and solid- and liquid-waste-management technology (from $5 to $10). This SmartLesson describes how this progress came about. Background 2003 and June 2008, the percentage of rural people accessing basic sanitation increased Bangladesh is one of the most densely from 29% to 88% (National Sanitation populated countries in the world, with more Secretariat). But, according to the Joint than 144 million people in an area of just Monitoring Program for water supply and 147,570 square kilometers. More than 76 sanitation of the WHO and UNICEF, the percent of the people live in rural areas. About improved sanitation coverage is only 53 115 million people live on less than $2 a day. percent (2009). Based on calorie intake, about 18 percent of the rural populations are classified as extremely Practitioners and policy makers recognized poor (daily intake below 1,805 calories per low-cost toilets, which are affordable and suit person).1 the local conditions of the community, as the major solution to shift community practice to Over the last decade, Bangladesh has emerged fixed-point defecation using improved as a global reference point in experimenting sanitation. with and implementing innovative approaches to rural sanitation. One such innovation was In less than five years, more than 90 million the community-led total sanitation (CLTS) people in Bangladesh shifted to fixed-point approach (Box 2), which moved millions of defecation. But diarrheal diseases are still the people away from "open defecation" toward second leading cause of child and infant "fixed point defecation." Between October mortality. Only 0.4 percent of people wash their hands with soap and water before having 1 Bangladesh Bureau of Statistics, 2006. SMARTLESSONS -- NOVEMBER 2010 1 a meal.2 The issue of the total quality of sanitation coverage demands a concept of sanitation that goes beyond disposal Box 1: WSP and SSTSB of excreta to include the environmental sanitation issues associated with the hygienic management of solid waste, The WSP is a multidonor partnership administered by the wastewater, and storm water. World Bank to support poor people's access to affordable, safe, and sustainable water and sanitation services. It has Because Bangladesh is one of the countries most vulnerable led or supported many of the advances made within the to the adverse effects of climate change, sanitation coverage water and sanitation sector over the last three decades. in some of the susceptible areas already has suffered huge WSP shares best practices across regions and places a losses from floods and cyclones that have completely strong focus on capacity building by forming partnerships inundated latrines or washed them away. For example, 23.4 with academia, civil society organizations, donors, govern- percent of latrines required reconstruction or repair within ments, media, the private sector, and others. WSP's work two years of installation.3 helps effect the regulatory and structural changes needed for broad water and sanitation sector reform. The sustainability issue in Bangladesh also presents a massive regulatory challenge for the disposal of septic sludge once The SSTSB project brings finance and technology together the one-site sanitation facilities are filled and emptied. On to make available a range of affordable sanitation options average, 27 percent of households don't have their own to promote a shift from basic latrine provision to quality toilet, and this number is as high as 50 percent in some areas.4 sanitation that includes safe, hygienic, disaster-resilient, comfortable, and durable latrines; safe waste disposal and Project Activities and Results management; and hygiene promotion, with special em- phasis on hand washing. One of the project's main compo- During the sanitation movement, local masons and small nents develops a new financing mechanism to support entrepreneurs supported millions of families in constructing moving rural households toward quality sanitation by link- latrines (mainly pit latrines). Recognizing their potential, ing small local entrepreneurs with local microfinance or- the SSTSB project was designed to enhance the nation's ganizations. abilities to provide affordable options for improved sanitation to households. The project engaged in entrepreneurship building, marketing support, development develop a new financing mechanism to support of low-cost sanitation solutions, and establishment of a entrepreneurs with working capital, which in turn allowed new financing mechanism with the local masons and them to offer payment installment terms to their customers entrepreneurs. We began by identifying local masons who for up to 10 months. Due to WSP's advocacy in July 2009, were interested in engaging in sanitation as a business. the Association for Social Advancement (ASA), a leading There were 20 candidates, most of whom were already Bangladesh-based nongovernmental organization (NGO) engaged in ring-slab manufacturing or similar businesses, that provides microcredit financing, agreed to provide such as shop owners selling sanitation products. The project loans to local small entrepreneurs for producing, marketing, worked with these entrepreneurs on marketing and and promoting appropriate sanitation technology options business development approaches. Of the 20 entrepreneurs such as multiple latrine options and hand washing, and that were trained, 10 improved their businesses after the solid waste-management technologies. Seven local training, with 7 receiving loans from ASA and the 3 others entrepreneurs received loans from ASA (totaling $11,000) making improvements with their own money. to make multiple latrine options available in the rural market. Considerations included sustainability, comfort, Among the marketing strategies identified was the use of waste-management technologies for composting, and local resources--village residents who would be trained to hand-washing stations. As a result, from October 2009 to motivate their neighbors to adopt good sanitation practices, June 2010, about 700 families purchased improved latrine with the support of project field staff. options, hand-washing devices, and waste-management technologies. And 50 schools installed hand-washing Regarding low-cost options for toilet facilities, hand- stations. washing devices, and solid and liquid waste management, the project examined and collected a number of options, Lessons Learned developed learning materials on the different options, and conducted hands-on training for local mason-entrepreneurs 1) Use a blended approach to develop both demand and for their manufacture/installation. Very quickly after the supply. basic training, however, the entrepreneurs introduced innovations on these options to suit the preference and The project's blended approach first created demand by budgets of their customers. introducing the most basic improvements through the community-led total sanitation approach (see Box 2 above), One of the major contributions of the project was to which used a range of participatory rural appraisal tools. These tools included: observing the current situation and 2 International Centre for Diarrhoeal Disease Research, Bangladesh, September 2008, Post defecation hand washing in Bangladesh: Practice and efficiency perspective. building rapport with the community; social mapping to 3 Water Sanitation Program, October 6, 2010, An assessment of sustainability of sani- identify the number of households, mark the condition of tation behaviors, facilities, and programs using community-wide open defecation free approaches. existing toilets and the waste dumping site, and analyze 4 WaterAid, 2008, "Sustainability and Equity Aspects of Total Sanitation Pro- the population by sex, age and other factors; and well- grammes," Global Synthesis Report. 2 SMARTLESSONS -- NOVEMBER 2010 Box 2: Community-Led Total Sanitation CLTS is a grassroots approach to sanitation developed in Bangladesh. Following the philosophy of participatory rural appraisal, it encourages the people within a community to live in a sanitary environment (mainly confinement of feces) by constructing latrines using indigenous knowledge and their own resources without any external support. The approach uses techniques to sensitize communities to the effects of open defecation and promotes a community-sanctioned shift to fixed point defecation practices. Example of a low-cost latrine. being ranking, which involved such issues as affordability and the households' economic status. private sector will not qualify for such loans. Microfinance organizations mainly provide loans to individuals--ranging We combined this demand creation with a strong and well- from BDT 3,000 to 20,000 ($4.35 to $290) at 12 to 15 percent defined social marketing approach that included market interest without collateral--and the borrowers repay the development, engagement of the local government for loan in weekly installments. Even though Bangladesh quality control, and inclusion of the poor as end users. Then pioneered the concept of microfinance, no financial we provided a range of affordable services--right at the organization found the economics of making loans for doorstep of the prospective user. sanitation for rural poor to be sufficiently lucrative. A note of caution: Raising awareness alone is not enough. It took a fair amount of advocacy and networking to Many recipients of hygiene education in Bangladesh can convince the ASA to provide soft loans to deserving local recite the information they have received. And field workers entrepreneurs at a reasonable rate of interest and often cite this as proof of program success, assuming that if repayment in monthly installments. The project worked individuals have the information, they will then take steps with ASA to evaluate the business soundness and capability to improve their behavior. But that didn't happen due to a of the local entrepreneurs as well as took them to the lack of user-friendly, affordable technology in the local community so that they could ascertain the demand for market. It was therefore necessary to make available, at sanitation. Local governments also supported this advocacy affordable prices, multiple options of such products as by providing a guarantee to ASA in the form of a personal hand-washing devices that were available locally and follow-up by the local leader to encourage prompt payment include demonstrations on how to use them. from the entrepreneur. Instead of providing services directly to households, the local government supported local 2) Establish a financing mechanism to support entrepreneurs. It did so to enhance the entrepreneurs' entrepreneurs interested in providing services. businesses as a warranty to the microfinance institute, and as a support for marketing and quality control. Financial constraints are the biggest deterrent to the growth and prosperity of any entrepreneurial venture. So, by the time the pilot project concluded and the results were Traditional banking organizations provide loans against shared with other microfinance institutions, there seemed to mortgage or collateral, which means the local informal be sufficient interest to explore similar financing opportunities. Composting using a simple technology. Cost: $4.50. Improved toilet. Cost: US $60. SMARTLESSONS -- NOVEMBER 2010 3 community in a better, healthier state, and to make their business profitable. Prior to the projects, local entrepreneurs sat in the shop and sold their products for a one-time up-front payment--a comparatively costly option that was one of the main barriers to purchase. But now they are walking from house to house with photos of different products, including descriptions of materials and price, motivating the rural poor, and offering doorstep services. This is more effective, because rural women in Bangladesh usually do not go to the market, and many of the men are away, living in towns for their livelihood. Consumers initially prefer a concrete structure with a twin pit for BDT 8,000 ($115) or more, but many end up purchasing Hand-washing device. Cost US $ 0.65. one that is half the price, for affordability. Long-term payments can widen the opportunity. 3) Help local entrepreneurs break through limitations by expanding their horizons in technology and marketing. The local entrepreneurs also offer attractive installment- payment packages. Most households pay an up-front sum Technology. The challenge was to overcome the barriers and (up to 25 percent of the total cost), and the balance in equal limitations created by low-cost sanitary options using low- weekly installments. A farmer who constructed a latrine with strength materials, less durable pit lining, or no lining--and BDT 4,200 said, "I can also repair my house if I get the same to show people that they did not have to install the same opportunity to pay in installments." type of latrine year after year. 4) Work with local change-agents to motivate the WSP trained local entrepreneurs on nine latrine options, community. whereas previously they were producing two or three. Once the local entrepreneurs began to think innovatively, a lot of Sanitation is a private, family matter--a subject that has out-of-the-box solutions emerged that used local raw its roots in habits and personal practices and, at the same materials as well as new combinations involving cement, time, is tied to household economic conditions. A way concrete, plastic, enamel, and brick. The entrepreneurs also needs to be found to motivate the family to abandon suggested other cost-effective ways of creating toilet long-standing habits for better practices. The project used structures in phases. two strategies: It employed the CLTS approach to create community pressure for stopping open defecation, and it Marketing. Parallel to the manufacturing and production used local resources to reinforce messages to individual was the market-generation exercise, which involved households by helping them shift to latrines. The project promoting and persuading, dispelling myths and identified five or six people as local resources from each misconceptions, providing factual information, giving the village and trained them to motivate their community-- scientific rationale, and customizing buying options--as in along with field staff of the local NGO, who organized how to plan for a toilet that might be beyond the prospective awareness sessions. These village-level sessions involved consumer's purchasing capacity. the local entrepreneurs, local government representatives, NGO workers, and local cultural groups. They presented The local entrepreneurs honed their own marketing styles. songs and dramas on sanitation to create interest in and Most said they put their heart and soul into making their demand for quality latrines. A total of 28 local resources sanitation ventures a success for two reasons: to see their were trained to act as agents of change. (Box 3.) Box 3: Profile of a Local Resource Mojeran Begum is a local resource of a village that became open defecation free in 2007. She received training from the facilitating NGO on mobilization, hygiene promotion, and improved sanitation, as well as on the benefit of improved technology, including hand-washing devices. Mojeran's personal style is to demonstrate practically the benefits of different models. In her village the hardcore poor used local resources such as bamboo, straw, and jute to build their modest toilets, many of which are destroyed in the monsoons. She motivates people to improve their toilet facilities and also builds a strong case for them to go in for the full toilet sanitation package that includes a hand-washing device, soap, brush, and water pot. Besides participating in an exercise on sanitation exposure that highlighted benefits to be gained from recycling kitchen waste, Mojeran shared with her community her own experience making compost and selling it for BDT 200 ($2.90). 4 SMARTLESSONS -- NOVEMBER 2010 Conclusion Rather than have governments provide sanitation services directly to households, an Most developing countries are off track in alternative approach, with the potential for their efforts to achieve the Millennium more lasting outcomes, is to harness the potential Development Goals sanitation targets. By of local entrepreneurs to deliver customized scaling up the lessons learned from this pilot sanitation service options to rural households initiative, countries can move from open- through the market. Governments need to defecation status to quality sanitation and be change their role from a provider of services to well on their way to achieving the target. an enabler --for example, by supporting training of entrepreneurs for marketing and Motivating for the adoption of improved manufacturing quality control, and arranging sanitation practices is not simply a matter of for or providing guarantees for loans to informing and educating the rural household. entrepreneurs from microfinance institutions. DISCLAIMER IFC SmartLessons is an awards program to share lessons learned in development-oriented advisory services and investment operations. The findings, interpretations, and conclusions expressed in this paper are those of the author(s) and do not necessarily reflect the views of IFC or its partner organizations, the Executive Directors of The World Bank or the governments they represent. IFC does not assume any responsibility for the completeness or accuracy of the information contained in this document. Please see the terms and conditions at www.ifc.org/ smartlessons or contact the program at smartlessons@ifc.org. SMARTLESSONS -- NOVEMBER 2010 5