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Get-a-Loo: A Market based Approach to deliver Sanitation to the Poor

Strengthen the private sector’s capacity to supply sanitation products and services to poor households in urban India

Photo of CURE INDIA

Written by

Background:

  • Nearly 60 percent of the world’s open defecation occurs in India
  • Consequences of poor sanitation in cities are particularly challenging given space constraints and high population density
  • In notified slums (slums registered by the municipality), 17 percent of the population is without access to improved sanitation; in non-notified slums, it is 51 percent
  • In urban slums, apart from OD there is significant OD in disguise (household toilets directly discharging into open drains)
  • Contrary to popular belief, there is a significant demand for toilets
  • Size of the toilet market is estimated to be INR 500-700Bn (USD 10-14Bn)
  • The urban sanitation market is however highly fragmented

Objectives:

  • Strengthen the private sector’s capacity to supply sanitation products and services to poor households;
  • Stimulate households’ demand for sanitation services


Proposed Activities:

Understand the urban market

Undertake a market assessment in Delhi and Agra for:

  • Better segmentation of population to identify the diverse segments of those at the bottom of the pyramid  
  • Understand how to convert Latent Demand into Effective Demand in these segments
  • Supply Chain Assessment: Understand the existing market to assess opportunity for market based supply


Design affordable Sanitation Package

  • Research to identify affordable sanitation products and service that can be produced and sold locally
  • Product prototyping:  Iterative testing of prototype; Users feedback  
  • Design final products and production process


Design and Test Business Model:

  • Develop the Business Model/s and supply chain: Design potential delivery models
  • Develop engagement of micro-finance and other financial institution/s, financing models including creative use of govt. support & subsidy
  • Test and Refine the model and production process


Proof of Concept:

  • Identify and engage existing enterprises
  • Provide Business Training
  • Support selected Enterprises to overcome market barriers
  • Beta Test with Early Entrants


Promotional campaign:

  • Work as a Market Maker to conduct market-building activities to get the models started and create an enabling environment for the market to grow
  • Undertake Behavior Change campaigns for toilet construction
  • Branding and marketing for promotion


Expand and Replicate:

  • Engage with new businesses and support early entrants
  • Support expansion of existing enterprise business; replicate & instil competition
  • Address early entrant’s market barriers


Enterprise led business:

  • Kick in exist plan
  • Transit from social franchising to enterprise led promotion

How would you describe the stage of development of your idea?

  • Conceptual Development

How big or scalable is the potential of your idea?

The potential is for entire urban India consisting of over 6000 towns and cities and 377 million people. The project will be piloted in two cities – Delhi and Agra having slum population of 1.8 and 0.84 million respectively.

Explain the sustainability aspect of your idea

With the best intentions, the Government cannot, on its own, address the sanitation challenge in its entirety. The private sector has an important role to play in meeting the sanitation needs of the country. The size of the toilet market is estimated to be Rs. 500-700 Billion (USD 10-14 Billion) with an estimated Rs. 80-210 Billion (USD 1.6-4.2 Billion) as household or customer financing. A major portion of this market will depend on the private sector to cater to its needs. By strengthen the private sector’s capacity to supply sanitation products and services, the proposed idea can exponentially expand and become a viable and sustained effort.

What types of financing would be required for your idea to be successful?

Will require a combination of funds and a package of financial services. This includes grant fund for technical assistance which will cover several key activities including market analysis, designing the business model, training and skill development of the partner enterprises, behaviour change communication, supporting the market maker etc. Secondly, seed funding will be required to bring in Micro Finance Institutions (MFIs) and/or constitute Self Help Group lending, and in devising and operating customer financing mechanisms. Given that toilet funding is not a traditional income-generating loan area for MFIs or the Non-Banking Financial Companies (NBFCs), a credit risk guarantee fund may also have to be created to increase their interest and involvement.

If you are proposing to partner with other organizations, please explain their role and reason for partnership.

Partnership is essential for the scalability and sustainability of any activity. We propose to partner with several types of institutions and agencies. The first set of proposed partner organizations will be government agencies such as the Delhi Urban Shelter Improvement Board (DUSIB) or the Agra Nagar Nigam who are responsible to upgrade the infrastructure of the city including the slums. Their involvement is critical for program implementation, policy reform and in reprogramming governmental programs and projects. Other set of state organizations include the Urban Local Bodies (ULBs) who are in-charge of managing the cities and service provision. Their engagement is critical to implement the program on the ground and to synergize and leverage the programs and activities of the ULBs. A key partner will be the MFI/s who will be associated for providing the financial service package/s. Efforts will be made to access CSR funds. For CSR funds, the contributing private sector corporate/s will be program partner/s. Last, but not the least, the communities in the settlements where the activities will operate will be one of the important activity partners.

In-country experience

  • Yes, for two or more years

If you have been operating in India, what has been your focus?

Urban Water and Sanitation including provision of community led toilet construction, designing and implementing decentralized wastewater treatment system, water kiosks and community managed water supply in low-income settlements, livelihood and health programs particularly for women, formative research on toilet use and OD, Behaviour Change Communication, partnering with state governments and city authorities to improve municipal service provision and use of GIS/MIS based planning, monitoring and management systems to improve service delivery.

Is your organization currently legally registered in India?

  • Yes

What states or districts will you target/are you targeting within India?

We are already engaged in six cities and towns in India. Of these, we propose to pilot the activity in the cities of Delhi and Agra along with existing government, private sector and community based partners.

Tell us a bit about yourself.

Centre for Urban and Regional Excellence (CURE) is a not-for-profit, development organization that works with urban, informal and low-income communities, seeking to innovate and un-think inclusive development. In particular, CURE strives to achieve three goals; one, reconnected urban societies that take rightful decisions to ensure sustainable urban development; two, strengthened local agencies with capacities for community engagement, participatory planning and development; and three, evidence building from the ground up for people-centered planning and development of cities. CURE’s strength lies in its communitarian approach. CURE believes that community participation is a ‘powerful organizing ideal’ – the scaffolding that fosters sustainable development in and of communities. It seeks to build real and meaningful participation in cities that can contribute to local development planning and design.

Is this a new or recent idea for your organization? How does it differ from what you are already doing?

CURE has over 10 years of experience on WATSAN in urban low-income settlements. It has provided sanitation solutions in slums of several cities through participatory processes, and working with several partners including the communities and the city authorities. The experience has led to the germination of the present idea. CURE continues to focus on WATSAN issues in urban areas. This initiative will address the urban sanitation challenge that requires both new technology and new management approaches. The initiative aims to strengthen the sanitation supply chain and develop sanitation providers that offer an increased array of choices in technology options using viable business models.

What are the two or three biggest risks for your idea and how will you manage the risks?

The risks involved relate to the business model and supply chain, engagement of microfinance and other financial institutions and the finance mechanism. We propose to undertake a rapid market assessment to identify the diverse segments of the BOP to understand how to convert latent demand into effective demand, undertake supply chain assessment of the existing market to understand the current situation and identify the opportunities for market-based supply. We will also undertake research to develop approaches to engage microfinance and financial institutions and design innovative financial instruments. For developing the business model we will look into four key aspects: the products and services including the value proposition of the business; the customer segments, the delivery channels and the relationship to be developed with customers; the key activities that the business will execute and resources needed to create value; and the cost of doing business.

How would you propose to track or record the households or customers reached?

Specific M&E plan for the project to track progress and evaluate the impact will be developed. Based on a log-frame, key indicators will be framed to track progress. A baseline study shall be undertaken in each pilot city. An existing mobile phone based software to generate local data and an MIS/GIS platform for real-time monitoring will be used. The data will be linked to a web-based MIS supported dashboard. The impact assessment will be undertaken during mid-term and at the end of project.

If you had two years and $250,000 USD in funding, how many households or customers would you reach?

We propose to reach 5000 odd households. We believe that this is necessary for testing at scale to show robust results and to increase the potentials of take-up of and in identifying ways to improve the efficiency and effectiveness of the key programmatic components and operations regarding the eligibility of the application of the model and its benefits. Apart from core funding from Water.org, we plan to tap some of our existing partners and other resource groups. These include USAID/India, with whom we have an on-going program, and potentially TATA Trust and D S Group of Industries for CSR funds. We would like to ideally have a three year program which is what , we believe, is required and practical for testing the validity and potential outreach which increases the chance of uptake and going to scale. We would like to explore all the funding options from different streams to be able to engineer such a time-line, if possible.

How would you propose to invest $250,000 USD if you received philanthropic/grant funding support from Water.org?

The amount will essentially be used for market assessment, designing and testing the business models, designing of financial processes and instruments, capacity development of the enterprises, supporting market operations etc. We hope to be able to leverage the support of some of our existing and/or new partners for other technical assistance areas and some other cost components including part of the management and administrative costs.

What type of support beyond grant funding are you most interested in?

Support will be required for linkages to financial institutions for developing the financial package, processes and access to micro-finance; and engagement with the state governments and urban local bodies to promote the idea.

Does your organization have Foreign Contribution Regulation Act (FCRA) approval?

Yes, CURE has a FCRA account (5 years).

21 comments

Join the conversation:

Comment
Photo of Tagba Assih
Team

a very good idea I think. Solving sanitation problem for poor is really a question of efficient market building. I suggest to elaborate more about micro-finance model you are going to use

many thanks

Photo of Christopher
Team

I can't really contribute, despite saying that this is a fantastic idea! I would love to see that being implemented!

Photo of CURE INDIA
Team

Thank you. We are very keen to implement the proposed idea on-ground and share our experience and the lessons learned widely.

Photo of Maryalice
Team

This idea is impressive. You clearly have identified a major need and a scaleable, sustainable model to meet that need. I think many more governmental issues of this scale need to be addressed through public-private partnerships, but also through the government's support by creating business environments that are friendlier to competition between organizations such as yours. If that happens, I am you will find many more companies competing to solve this problem in the fastest manner possible--then everybody wins.  I think your plan needs an aggressive public policy component to compliment your business strategy, perhaps even at the international level, so that these ideas may come to fruition as quickly as possible, and as broadly as possible around the world. You will need strong support from the local, state, national, and international level to not only meet India's need, but to eliminate this sanitation issue internationally.

Photo of CURE INDIA
Team

Thanks for the useful comments. We definitely plan to engage with the government and other institutions such as think tanks, multilateral agencies, INGOs etc. We would like to initiate discussions and debate on this and other similar approaches that can influence public policies. 

Photo of Stephane Leblois
Team

This is a great idea to match a very real issue in India's urban centers, and I think the plan that you've outlined is certainly achievable given CURE's expertise. I think that, while it is important to pursue partnerships with MFIs and other financial institutions to meet this project's financial demands, I think that a greater emphasis should be placed on forging partnerships with private sector organizations in order to gain financial and in-kind support. There is a lot of money in the CSR sector, and this plan you've proposed is certainly marketable to big corporations based in these urban centers, as rich and poor urban dwellers alike understand the importance if addressing the need for access to proper sanitation facilities. My advice to you would be to try to gather as much of this "free money" as possible before seeking support from financial institutions!

Photo of CURE INDIA
Team

Thanks for the useful comments. We definitely plan to tap the CSR sector as well as work with the government at the centre, state and the city level. What we want is that eventually a system or mechanism should be in place that allows both the consumers and the medium, small and micro sanitation enterprises to access market finance and other financial products.
 

Photo of Rochelle
Team

Fantastic idea!  Proper sanitation is so imporatn for all communities and quaility of life.  You mentioned that seed funding will be required to bring in MFIs but the issue is that toilet funding is not an income-generating loan area.  Makes sense!  But this is a basic need and should be financed by the government(s) or maybe World Bank, IMF, UN, etc..  

Photo of Rupert Whiting
Team

I have researched and developed several business cases that appear to be very viable in the target areas and I would love to share them with you.  They revolve around community sanitation and water supply units on a pay-per-use basis.  They provide scalable development for slums and rural villages that can be permanent or temporary.  Their installation creates manufacturing and service jobs as well as improving the environment and access to clean water.  It meets Make in India and Clean India perfectly and is a perfect entrepreneurial opportunity for locals so the burden of ownership moves from government to private individuals (ideally not corporations) and in so doing becomes locally owned and ownership drives pride and sustainability.

Photo of CURE INDIA
Team

Rupert: Thanks for your comments. We would love to learn more from your research experience. We do have some experience of pay-and-use business models, but would like to learn more about such and other potential business models. Is there a way to communicate directly - an e-mail id that you can share? Thanks.

Photo of Rupert Whiting
Team

Sure. use rupertwhiting at gmail dot com.  I look forward to collaborating with you.

Photo of CURE INDIA
Team

Thanks.

Photo of CURE INDIA
Team

Dear Rupert,

Request you to go through the responses we have recently posted against other comments and provide your valuable feedback. Thanks.

Photo of Dana Ilmari Polojärvi
Team

It would be helpful for us to have a clearer idea of the projects you've already established, so we could have more detail to work with. Details of the WATSAN projects, particular problem areas you've seen during these projects, areas where you still have unanswered questions, all would be great starters for those of us who would like to help.

Photo of CURE INDIA
Team

Thanks.
The Centre for Urban and Regional Excellence (CURE) is a development NGO operating from Delhi, India. CURE has mobilized communities to plan and implement innovative water, sanitation and slum upgrading solutions for in‐house services and better health practices. Among others, our activities include: localized and de‐engineered sanitation (customized household toilets networked to existing trunk infrastructure); b. decentralized sewage treatment in slum resettlement areas which do not have city sewer services (cluster septic tank attached to simplified sewer system connecting home toilets with a decentralized treatment system); c. water treatment plants as business enterprises for providing safe drinking water and d. micro-enterprise based community solid waste management. This has helped leverage state resources for additional infrastructure such as access-ways, street or security lighting, community toilet complexes, primary health care centres etc. CURE has also developed a digitized city slum map of Delhi, Agra and two other cities with a WATSAN database on GIS and, using participatory processes and a mobile‐based application, to track and benchmark services for accountability which has been shared with the local urban bodies for planning, managing and monitoring the provision of municipal services. We have successfully implemented the Cluster Septic Tank  (CST) system,  planned and constructed through people’s participation in the cities of Delhi and Agra. It has three parts: home toilets, a shared septic tank and a Decentralized Waste Water Treatment System (DEWATS). The idea was to provide the slum residents a viable and improved alternative to constructing poorly built and unsafe open toilets or pit latrines under their homes, to an improved and safe solution for home toilet and Fecal Sludge Management. As part of the effort we have nurtured community leadership to take ownership, raise community resources, liaison with the sanitation enterprises, oversee construction and operate an O&M plan. The immediate impact of the CST have been restoration of the slum dweller's dignity. It has also triggered  housing upgrades, as the poor invested in making their temporary homes into permanent ones.  The households have been regularly contributing to the sanitation cost. A community credit fund has been designed for the poor households to borrow money at low interest rates to pay for the toilet costs or act like a bridge fund for those households who could not organize the entire funds at one go. Donor/CSR funds have also been used for construction of the CST. This is one area which we have identified that requires more work to design a viable financial package that should be attractive enough to interest the MFIs and financial institutions for the model to be sustainable. We are also open to technical and other inputs for refining the sanitation technologies and the entire package that we are currently working with.

Photo of Dana Ilmari Polojärvi
Team

Very interesting, and thanks for sharing. I"m curious how you network the customer's toilet to the cluster septic tank system. How do you manage this without great cost in digging and installation? Is the waste water treatment grey water and the septic for the actual sewage?

Photo of CURE INDIA
Team

Thanks.
Firstly, we mobilize the community and secure their buy-in. The work is undertaken in phases - one street at a time. This allows us to organize resources and people's participation without getting into difficult and complex processes. As you may have noticed, these are small-bore, shallow sewer lines and  do not require deep trenching. There is enough scope to review and innovate on the conventional engineering approach for sewerage - this has been our experience. There are several key players involved. We collaborate with various partners and agencies including the city authorities who provide key inputs in the project.  The cluster septic tank (CST) receives the blackwater. We have further refined the DEWAT system and have added a bio-filter (kind of modified 'constructed wetland') at the finishing end of the CST and are recycling the wastewater for gardening/agricultural purpose.

Photo of OpenIDEO
Team

Congrats on moving into the Refinement phase Cure India team! Here is a question from our experts. Looking forward to your responses.

If you have done previous work in WASH, could you share more details about that work and how you would leverage what has already been done for clear next steps?

We’d also love for you to reach out engage with some of the other ideas in the Refinement phase of this challenge. Collaboration is the name of the game here at OpenIDEO. We’re looking forward to how you’ll work together to grow each other’s initiatives.

Photo of OpenIDEO
Team

Also, to answer the new questions, hit the Edit Contribution button at the top of your post. Scroll down to the entry fields of the new Refinement questions. Hit Save when you are done editing.

Photo of CURE INDIA
Team

Thanks.
Request you to refer to the information we posted in response to Dana Ilmari Polojärvi's comments. We have noted your idea for reaching out to other organizations who have posted similar initiatives. We have included our thoughts on this in our response for the refinement phase.
Regards.

Photo of CURE INDIA
Team

Thanks for the interest in our proposal.
The Centre for Urban and Regional Excellence (CURE) is a development NGO based in Delhi. CURE mobilizes communities to plan and implement innovative water, sanitation and slum upgrading solutions for WATSAN facilities and services and better health practices. Among others, our activities include: provision of sanitation facilities including home based toilets, localized solutions that provide customized household toilet networked to existing trunk infrastructure; decentralized sewage treatment in slum and resettlement colonies which do not have city sewer services. This includes cluster septic tank attached to simplified sewer system connecting home toilets with a decentralized treatment system; water treatment plants as business enterprises for providing safe drinking water, and micro-enterprise based community solid waste management. CURE has been able to leverage state resources for additional infrastructure, facilities and services. CURE has also developed digitized slum maps for Delhi, Agra and two other cities using participatory processes and a mobile‐based application to track and benchmark services for accountability. This has been shared with the urban local bodies for planning, managing and monitoring the provision of municipal services. We have successfully implemented the Cluster Septic Tank (CST) system - planned and constructed through people’s participation in Delhi and Agra. It has three parts: home toilets, a shared septic tank and a Decentralized Waste Water Treatment System (DEWAT). The idea was to provide slum residents a viable and improved alternative to the poorly built and unsafe open toilets or the rudimentary pit latrines with improved home toilet and safe Fecal Sludge Management. Although pit latrine is one of the technologies otherwise proposed as a sanitation solution, it has major issues for densely built up slum settlements including creating hollowness below poorly built residences in close proximity to one another, environmental and groundwater contamination, foul smells, attracts flies and mosquitoes and has other public health issues. As part of providing improved sanitation, we have nurtured community leadership to take ownership, raise community resources, liaison with the sanitation enterprises, oversee construction and operate O&M plans. The immediate impact of the CST have been restoration of the slum dweller's dignity. It has also triggered housing upgrades, as the poor invested in making their temporary homes into permanent ones. A community credit fund has been designed for the poor households to borrow money at low interest rates or act like a bridge fund for the households who were unable to organize their contributions. Donor/CSR funds were also used for constructing the CST.  Since we have presence in Delhi and Agra it will allow us rapid on-ground mobilization. Being already engaged in these cities, we have a fair knowledge about them, the settlements and their forward and backward linkages. This will allow us to quickly identify the area of focus and mobilize the communities. Existing relationship with the concerned authorities and urban local bodies will allow to gather the necessary approvals and coordinate with them. We expect to put together all the logistics and human resources necessary to undertake market assessments within a short timeframe, initiate the research to identify affordable sanitation products and service that can be produced and sold locally and move forward to develop the business model.
Please let us know if additional information is required. We also look forward to your valuable comments and suggestions.