iDE Sanitation Marketing Scale Up (SMSU 1.0) Project Details

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iDE Sanitation Marketing Scale Up (SMSU 1.0) Project Details

Hi SuSanA Members,

iDE was requested to complete the full project details for our Sanitation Marketing Scale Up (SMSU 1.0) project in Cambodia. This project has been discussed in previous forum threads, but this post provides the high level information.

• Title of grant: Sanitation Marketing Scale Up Project (SMSU 1.0)
• Subtitle (more descriptive title):
• Name of lead organization: iDE (formerly International Development Enterprises)
• Primary contact at lead organization: Blake McKinlay
• Grantee location: Denver, CO USA
• Developing country where the research was tested: Cambodia
• Start and end date: July 11, 2011 – October 31, 2014
• Grant type: (e.g. Global Challenges Explorations, Reinvent the Toilet Challenge, Other): Multi-donor grant.
• Grant size in USD: $6,870,211 (as per grant database: www.gatesfoundation.org/How-We-Work/Quic...s/2011/10/OPP1037108
• Funding for this research currently ongoing (yes/no): No

• Short description of the project: This project, funded by the Bill & Melinda Gates Foundation ($3,987,717), the Stone Family Foundation ($2,100,000), the World Bank WSP ($632,494), and the Global Sanitation Fund ($150,000) is for the rapid scale up of Sanitation Marketing to move toward the Cambodian MDG of 30% rural sanitation coverage by 2015. During the project period, iDE catalyzed both supply and demand for the ‘Easy Latrine, facilitating the sale of more than 141,096 improved latrines to rural households reaching 663,151 people (based on 4.7 people per household).
Goal(s):
  • To enable large numbers of rural Cambodian households to access, and consistently use, sanitary latrines through vibrant sanitation markets, providing them with health, economic, and quality-of-life benefits.
  • Use the experience and evidence developed during implementation to replicate sustainable, market-based solutions to improve sanitation in other developing countries.
Objectives:
  • Objective 1: Achieve national scale with market-based sanitation solutions in rural Cambodia
  • Objective 2: Support the dissemination and replication of the Sanitation Marketing approach into other countries.
Donors:
The Bill and Melinda Gates Foundation, the Stone Family Foundation, and the World Bank Water and Sanitation Program (WSP)

Implementing Partners:
  • Cambodian Government at various levels – General support, guidance, and connections
  • Whitten and Roy Partnership - Sales and Management Consultants
  • inCompass (previously the iDE i-Lab) – Design Consultants
  • 17 Triggers - Behavior Change and Social Marketing Consultants
  • Kredit - micro-finance partner
  • VisionFund - micro-finance partner
Links, further readings – results to date: Current state of affairs:
This project (SMSU 1.0) is completed and a follow on project (SMSU 2.0) is now being implemented by iDE. SMSU 2.0 is currently funded by the Australian Department of Foreign Affairs and Trade (DFAT) and the Stone Family Foundation.

Biggest successes so far:
  • Exceeding the project targets, which demonstrated that a market-based approach to sanitation can reach a larger scale – see the results to date above.
  • Replicating a process in other countries, NOT a specific approach. iDE uses the Human Centered Design process to develop business models, products, and/or supply & demand interventions that will catalyze the market for sanitation. The specific interventions vary in each country depending on the context, maturity of the sanitation market, and desires of the customers. Thus, iDE replicates the HCD process in each new country to identify the correct interventions instead of simply replicating the SanMark model that was successful in one country. This distinction – replicating a discovery process (HCD) and not a specific implementation approach (iDE Cambodia SanMark) – is essential.
Main challenges / frustration:
  • Latrine installation still lags purchase in some cases as households delay installing the latrine under-ground until they can afford to purchase a nice shelter
  • Sanitation financing shows promise but is operationally difficult to take to scale.
  • GOOD: We have seen that offering financing to purchase a latrine (i) can increase demand among customers by 400% (See the IDinsight Willingness to Pay Study above). The loans are being repaid (100% repayment in the Cambodia pilot), the MFIs providing these loans break even (or profit a little), and the MFIs use this as a form of acquiring new customers.
  • CHALLENGE: Taking our pilot to scale is proving operationally difficult. MFIs are hesitant to scale WASH financing because they have their own priorities to focus on, the loans provided are quite small in comparison to their other loans, and they are hesitant to make the changes in their operations that are necessary to make the model work (smaller/simpler contracts, close coordinate with latrine sales agents, additional MFI staff).
  • Demand is larger than supply in some areas so we are currently working on unblocking the supply chains.
  • Each of these challenges will be addressed in the follow on project - SMSU 2.0.

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  • JKMakowka
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Re: iDE Sanitation Marketing Scale Up (SMSU 1.0) Project Details

Thanks for posting the details! Oh and our lengthy previous discussions just show that this is indeed an very interesting project to watch.

BlakeMcK wrote:

  • CHALLENGE: Taking our pilot to scale is proving operationally difficult. MFIs are hesitant to scale WASH financing because they have their own priorities to focus on, the loans provided are quite small in comparison to their other loans, and they are hesitant to make the changes in their operations that are necessary to make the model work (smaller/simpler contracts, close coordinate with latrine sales agents, additional MFI staff).

  • I am sure you have been discussing this internally a lot already, but does it really make all that much sense to involve the MFIs in a business they seem to not want? I think it is totally understandable from their point of view, as "consumptive" loans are a higher risk and rarely pay-off unless you are the producer of the bought product yourself.
    The toilet sales agents or the production companies do not have sufficient financial resources to offer rate payment themselves? Maybe they could be incentivised to do so by some sort of defaulter insurance or a loan from an MFI directly to them instead? Could there be an easy to measure index (like a bad harvest?) that would make administrating such a defaulter compensation insurance really simple and with low administrative overhead?

    Microbiologist & emergency WASH specialist
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    • canaday
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    Re: iDE Sanitation Marketing Scale Up (SMSU 1.0) Project Details

    Dear Blake,

    Congrats on your great success.

    Are these the twin-pit pour-flush toilets in which only the first pit is initially installed in most cases? Why is the design not specified on your webpage?
    www.ideorg.org/WhatWeDo/WASH.aspx
    Why is it not listed among your technologies?
    www.ideorg.org/OurTechnologies/Home.aspx
    Any advances in getting both pits done from the start?
    In what percentage of cases does the second pit ever get done?

    What ever became of the EasyShower that Ben Clouet developed with iDE (if I am not mistaken)? I think this is a great concept in which privacy walls serve for both showering and defecation... and drip irrigation spreads greywater and urine productively among crop plants. By the way, I have since thought of a much simpler way to make the floor.

    Best wishes,
    Chris Canaday

    Conservation Biologist and EcoSan Promoter
    Omaere Ethnobotanical Park
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    Re: iDE Sanitation Marketing Scale Up (SMSU 1.0) Project Details

    Hi JK

    Thanks for the great insights/thoughts. We have been giving this a lot of thought, engaging in dialogue with others (Water for people, water.org, BMGF) and exploring a couple different options (although we have not decided what direction we want to move in yet). We are looking at
    • Continue working with the MFIs. I hear your point completely that it makes no sense to force business on an MFI that doesn't want it. However, there is still a chance that these consumption loans can actually be good business for MFIs. In our pilot the MFIs did not have any customers default, WASH loans were at least break even (if not a little profitable for the MFI), and these loans were great sources of new customers acquisition for the MFIs. So we are exploring if we can find some creative ways to make these consumption loans 'good business'.
    • iDE has also been piloting an in-house financing model, where iDE receives a line of credit from KIVA and processes the loans ourselves using the very same model that was tested with MFI partners. Early results show this to be very successful. Over 1200 loans have been processed in barely 6 months and the gap between orders and deliveries has been closed. But can this scale?
    • Supply side financing that enables the businesses to provide credit is another option - but not too much progress here from our side.
    • We have also done a couple trials with East Meets West on the output based aid approach and using rebates. More time needed before we have too much to share here

    As mentioned, we are exploring all of this in SMSU 2.0 and will happily report back if/when we have some good learnings. I have also passed on your ideas to our finance person. Thanks again for the thoughts

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    Re: iDE Sanitation Marketing Scale Up (SMSU 1.0) Project Details

    Dear Chris,

    Thanks for the response and congrats. Here's to more progress!

    The design is for a twin pit pour flush latrine - known as the Easy Latrine. You are correct that the large majority of the time one pit is installed and then people add a second when needed. We have not seen many people install both pits simultaneously to date as it increases the cost. The design is not specified on the website or in our list of technologies simply because we are in the process of re-designing our website (which is taking some time). Here are some articles on it.
    I cant really answer what percentage of cases the second pit ever gets added right now. As most people plan to buy a second pit when the first one is full, we are still waiting for clients original pits to fill up.

    The Easy Shower was developed by Ben Clouet with iDE and has really not progressed in recent years. The idea is great from an environmental and technical side of things but still some questions that need to be answered. How important is a shower to people? Are they willing to pay for it? Do they mind showering where they go the bathroom. Do they irrigate crops and thus need the drip irrigation? On a personal note - I think the Easy Shower is a very cool idea with some legs but iDE as a whole is not pursuing it strongly at this moment.

    Best,
    Blake

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    • F H Mughal
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    Re: iDE Sanitation Marketing Scale Up (SMSU 1.0) Project Details

    Dear Blake,

    As you can see in the separate thread, which you have referred to, I was probably the first who reported on the splendid progress made by iDE. Congratulations for the excellent progress!

    On replication, you say: “Replicating a process in other countries, NOT a specific approach. iDE uses the Human Centered Design process to develop business models, products, and/or supply & demand interventions that will catalyze the market for sanitation. The specific interventions vary in each country depending on the context, maturity of the sanitation market, and desires of the customers. Thus, iDE replicates the HCD process in each new country to identify the correct interventions instead of simply replicating the SanMark model that was successful in one country. This distinction – replicating a discovery process (HCD) and not a specific implementation approach (iDE Cambodia SanMark) – is essential.”

    You are right in saying that, it is not a specific approach, and that HCD process is used. My point here is that, there is a great scope of replication in other developing countries. An associated document shows that, some initiative was made in Nepal, Zambia, and Bangladesh, with varying success. While I do realize facing the initial “teething” problems, when you replicate in other countries, still, I would suggest that you should go “all out” in replicating it in other countries, with minor modifications, here and there. Overall, you would be doing a great service in minimizing open defecation problems in other countries, and taking sanitation to the “next level.”

    Is there any final report of the project?

    Regards,

    F H Mughal

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    Re: iDE Sanitation Marketing Scale Up (SMSU 1.0) Project Details

    Dear F H Mughal,

    Thank you very much for the kind words. We are proud of whats been achieved to date and look forward to more progress in Cambodia and beyond.

    Regarding your point about replication. We are definitely working to replicate the success seen in Cambodia in other countries (notably Ethiopia, Nepal, Bangladesh, and Vietnam currently), we are just not 'married' to the exact model we used in Cambodia. Instead we use the HCD process in each country to determine the specific constraints/opportunities that exist, identify the key actors to engage, and develop a business plan that is appropriate for that context. In some cases the result is an approach quite similar to Cambodia (Nepal and Ethiopia), in other cases its quite different (Bangladesh and Vietnam). What is the same through all these programs is using a market (supply and demand) to improve coverage of hygienic latrines. What is different is often the actors involved (local entrepreneurs vs national firms vs government), the maturity of the market, the market failure that needs to be corrected (product, supply, demand, capacity, etc.), and the product options available. So we are working hard to build/strengthen markets for improved sanitation in multiple countries and understand that the exact approach to do so will vary a bit in each context. Please let me know if you need more information/explanation here - I am not sure I have made things any clearer.

    We are currently working on the final project report. I will be sure to share it on this thread when it is finished.

    Best,
    Blake

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    Re: iDE Sanitation Marketing Scale Up (SMSU 1.0) Project Details

    Dear Blake,

    You have made it very clear. That is an excellent and informative response. I'm glad to note that you are "dynamic" in your approach, when it comes to replication in other countries - tailoring your development to each country's specific conditions. That is great!

    I'll be looking forward to your final report. I would like to see the constraints that you face, and how you overcome those constraints - this is a challenging aspect, isn't it?

    Wishing your success, all along the way!

    Regards,
    F H Mughal

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    Re: iDE Sanitation Marketing Scale Up (SMSU 1.0) Project Details

    Dear Blake,

    Congrats for all IDE team ! It's amazing what has been done these past few year, especially on the micro credit front.

    I'll explain a bit further, chris, why the eazy shower isn't actually viable yet :
    - There is water everywhere in Cambodia, rather too much
    - Khmers usually don't like dry toilets, it remind them Pol Pot dark times
    - Most rurals grow rice rather than vegetables, direct use of urine isn't that simple
    - The beauty of eazy latrine is that there's literraly no user training, in the perspective a a self sustained market the mason don't want to bother explaning how his product works ... which is a tricky part of the eazy shower.

    The goal of eazy shower was to show that there was a way toward eco-sanitation marketing, basically bringing an eco-san latrine for less than 80 $. The mason would use the same molds as regular latrines so no extra investment. I believe it's got far more potential in a dry country where water is scarce. I hope IDE will keep looking in this direction, but I know that the mission is very tricky.

    Good luck for all anyway, looking forward to the final report !

    Best,

    Ben
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    Re: iDE Sanitation Marketing Scale Up (SMSU 1.0) Project Details

    Hi Ben and Blake,

    Thanks for the explanations.

    On the education front, it seems crucial to make sure that all involved understand the concept of this twin-pit system (with the digging out of safe soil from the resting pit after a prudent amount of time) and the importance of only applying this system where the water table is deep in the ground and there is never flooding.

    Good luck with everything and please keep sending us your news.

    Best wishes,
    Chris Canaday

    Conservation Biologist and EcoSan Promoter
    Omaere Ethnobotanical Park
    Puyo, Pastaza, Ecuador, South America
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