A recent study by the Water and Sanitation Program (WSP) and International Finance Corporation (IFC) of the World Bank surveyed over 100 firms providing on-site sanitation services to the base of the pyramid in four countries (Bangladesh, Indonesia, Peru and Tanzania) and debunked widely held beliefs on the motivations and potential of firms in the growing sanitation market.
3. Lack of interest in sanitation is driven by the lack of money. Myth. Sanitation is a low expenditure priority for households, but the lack of interest is not necessarily driven by lack of money. Sanitation remains a low priority even where money is not an issue. In the four countries studied, out of the 227 million people without access to improved sanitation, over 65% are non-poor and living above the poverty line. In Tanzania, 400,000 rural households wealthy enough to have cement floors in their homes do not have improved sanitation. Among the poor, the study found that they spend as much on mobile phones each year as it would cost to install a basic sanitation system. The poor are faced with limited interesting sanitation options and significant coordination challenges, requiring a huge amount of motivation and capabilities on their part to overcome. For poor households, there seems to be just too many reasons not to improve sanitation and not enough compelling options to do so.
4. Poor households are looking for ‘improved’ sanitation. Myth. Poor households do not reference their desires against what governments or international standards define as “improved sanitation.” To get households to invest in sanitation, they need an offer they cannot refuse: a quality, high value facility that is within their reach. In Peru, households at all income level that have a regular supply of water (80% of all households) aspired to a bathroom with a sink and a shower and regarded latrines as a symbol of poverty and social exclusion. The study found that in general, poor households aspired to a much higher level solution and knowingly quoted prices of what they might pay to get their ‘ideal’ that comprised a large portion of their average income. Some households, sensing the futility of this desire, ‘made do’ with a less desired option. An exceptional phenomenon of ‘making do’ is the popularity of fake bathrooms in Peru – a toilet with the shower and sink features even if the household was not connected to the water network! The poor are looking for a compelling offer and a better buying experience – one where quality products are affordable (or supported by financing) sold through a credible agent that presents options and complete solutions (such as all in -- labor and materials installed at the doorstep).
5. Policies promoting sanitation are critical for the private sector. Myth. Sanitation policies do not all have the same relevance to the private sector. The study found that with respect to engaging the private sector in the on-site sanitation market, the impact of current sector policies was limited. On the other hand, current policies do not seem to have hindered private action – the majority of poor people still look to the private sector to assist with self-supply. Interviews with enterprises directly providing services portrayed a situation where policies and government agencies were largely seen to be of no consequence. In Bangladesh, nearly all surveyed enterprises said they did not know, when asked for an opinion about the clarity of rules and standards for sanitation, while 55% of firms in Peru disagreed or strongly disagreed that rules were clear as did 50% of firms from Tanzania. Asked whether sanitation promotion programs were well publicized so that firms can look out for business opportunities, a similar pattern of responses emerged. The responses seem to reflect that public policies could be more relevant if they aimed at lowering specific barriers or addressing risks that the private sector perceived. So far, general statements of support and sanitation programs geared towards implementation through public institutions do not matter to the private sector.