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