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David Auerbach, co-founder of Sanergy

Editor’s Note: We pose five questions to foundation, NGO, and thought leaders in the WASH sector as part of our “5 Questions for…” series. In this post, David Auerbach, co-founder of Sanergy, shares his thoughts on the sanitation value chain, community ownership, and exciting innovations in sanitation in response to our questions.

1. What is the number one most critical issue facing the WASH sector today?

The most critical issue that the WASH sector faces is the lack of systems-based thinking. We need to go beyond simply providing a toilet. Although 2.5 billion people lack access to a clean toilet, 4.1 billion are at risk because sewage is not treated.  At Sanergy, we take a systems-based approach that addresses the entire sanitation value chain. We provide clean toilets through a franchise network of local micro-entrepreneurs, collect the waste professionally, and treat it properly by converting it into useful byproducts, such as organic fertilizer. Failure to address the whole chain ultimately pushes the challenge further downstream.

2. Tell us about one collaboration or partnership your organization undertook and the lessons learned from that experience.

Sanergy sells Fresh Life Toilets to local micro-entrepreneurs. The franchise package includes installation, marketing, training and business support, and a daily waste collection service, and costs about $600 for the first year. In our work with the residents of Nairobi’s slums, we came across micro-entrepreneurs who were excited to launch Fresh Life businesses -- especially women and youth -- but who did not have immediate access to finance to start up their businesses. Kiva, an online micro-lending platform, partnered with us to provide 0% interest loans to future Fresh Life Operators. The partnership has led to 73 loans being issued and the construction of over 120 Fresh Life Toilets. Those operators serve 5,000 residents with hygienic sanitation daily.  At the same time, Kiva gives us an incredible platform to share the resilient, compelling stories of our micro-entrepreneurs with the world.

By partnering with Kiva, we are overcoming an important hurdle -- access to finance -- and are creating a grassroots, sustainable solution to provide critical sanitation services.

3. How do you work with local communities to promote project ownership and sustainability?

All 161 of our Fresh Life Operators -- each of whom has invested their own savings in Fresh Life -- are from the Mukuru community. They are critical to the sustenance of our business and are key players in effectively tackling the sanitation crisis.  One such operator is Agnes Kwamboka who has a remarkable story of the transformation that she was able to make as a partner with Fresh Life. Tired of having to bribe policemen so that she could run her unregulated brew business, she closed it down and had two Fresh Life Toilets installed. Now, she earns a good income, which enables her to sustain her family and no longer worry about the police. She has also reinvested the profits by purchasing additional Fresh Life Toilets and in literacy classes for herself. Testimonies like these show that we are positively changing the community and changing people’s mindsets about their role in society.

The other significant way in which we gain community buy-in is by hiring from the community. Sixty percent of our 135-person team is from the local community and over 60% of our staff is between 18 – 25 years old -- the age bracket with the highest unemployment in Kenya.  The residents know how the lack of adequate sanitation can have disastrous effects on their lives and this makes them extra-determined to change their communities for the better.

Fresh life toilets become part of the landscape in the informal settlements in which Sanergy works. Credit: Sanergy

Fresh life toilets become part of the landscape in the informal settlements in which Sanergy works. Credit: Sanergy

4. Tell us about an emerging technology or solution that excites you and that you think will make a big impact in the WASH sector over the next 5-10 years.

One great initiative to emerge is the Bill & Melinda Gates Foundation’s Re-invent the Toilet Challenge (RTTC). Institutions and researchers have received generous grants to come up with innovative approaches for the hygienic provision, collection and treatment of waste.  The initiative has really catalyzed the entire sector and, moreover, broken down taboos to bring the sanitation challenge to the center of any development conversation. Through the RTTC, Sanergy has benefited significantly. We have partnered with The Climate Foundation to develop biochar -- an organic soil conditioner. We have worked closely with Agriprotein in South Africa to develop a protein-rich animal feed made from maggots that consume only human waste. These technologies have the potential to be massively important for the agricultural input industries. In creating value from waste, we give incentive for everyone to participate in the sanitation value chain.

5. There are lots of great WASH resources, ranging from striking data visualizations to good, old-fashioned reports. What’s caught your eye lately besides WASH funders, of course?

Lately, we have read a couple of compelling papers from the World Bank’s Water and Sanitation Program about what a toilet’s worth, from ID Insight about IDE-Cambodia’s work with microfinance, and Dean Spears’ research on the effect a lack of hygienic sanitation has on children’s height.

Water.org has announced a $8.3 million grant — the largest single funding commitment in its history — from the Caterpillar Foundation to expand its WaterCredit initiative to Indonesia, the Philippines, and Peru.

Using microfinance tools, the WaterCredit initiative makes it possible for a family living in poverty to secure a small loan to pay for construction of a water connection or toilet in their home. The expansion of the program will draw on a diverse network of local partners, including commercial financial institutions, microfinance institutions, and nongovernmental organizations working in the water and sanitation space.

The funding commitment from the foundation, the philanthropic arm of Caterpiller, Inc., builds on an earlier $3 million grant to scale the initiative in India. The funds will enable Water.org to accelerate the impact of its efforts in the developing world and will provide nearly five hundred thousand people with access to safe water and sanitation.

Caterpillar Foundation Awards $8.3 Million to Water.org

"Having household access to clean, running water not only keeps families healthy and productive, it gives back countless hours to girls and women that they can use to further their education or start a business," said Caterpillar Foundation president Michele Sullivan. "The ancillary benefits of convenient access to clean water are staggering."

Source:“Caterpillar Foundation Expands Partnership With Water.org.” Water.org Press Release 10/17/13.

Urvashi Prasad, program officer of the Michael & Susan Dell Foundation

Editor’s Note: This post was authored by Urvashi Prasad, program officer of microfinance and health at the Michael & Susan Dell Foundation. Prasad highlights the intersections between microfinance and WASH, and discusses the baseline issues that must first be addressed for this kind of cross-sector work to succeed. A version of this story originally appeared on the Michael & Susan Dell Foundation blog.

A recent CGAP blog post highlights an often unrecognized role microfinance can play in the lives of the poor: enabling access to critical infrastructure services like water and sanitation. As the post explains, the idea is simple. By providing people with low cost loans, microfinance institutions (MFIs) “grow water and sanitation assets and infrastructure at the city, community and household levels.” The approach works, notes the post, by “tackling one problem (access to safe water and sanitation)” through “a related yet critical bottleneck elsewhere (access to finance).”

At the Michael & Susan Dell Foundation, we view this work as vital, and we’ve supported efforts to link microfinance with water and sanitation infrastructure in urban areas across India. But our own experience in the field has taught us an enormous amount — not just about the potential of such projects to change lives, but also about the non-financial and non-technical complexities of successful implementation — and about the challenges of successfully encouraging people to integrate new habits into their daily routines.

What we’ve found is that to advance this work, organizations must be prepared to navigate and resolve at least three major baseline issues:

1. Lack of demand among community residents 
From the outside, it’s easy to assume that communities that lack access to water and sanitation must be clamoring for it. Ready access to clean water would mean healthier kids and families, better attendance at school, less time wasted waiting for water. But that assumption is frequently incorrect. Even in urban areas where people are generally more aware of the importance of water and sanitation, our experience suggests that awareness does not necessarily (or easily) translate into willingness to pay for access to facilities. Why? Because although people who are not sick are able to work more (or if they’re children, attend school more often) and earn more as a result, there is no obvious, short-term income benefit connected to having clean water or a toilet. And among the poor, who face a struggle to meet an endless number of immediate needs, clean water and sanitation are often added to a long list of nice-to-haves.

Even when access is in place, behavior change often remains elusive. In fact “persuading the villagers to drink, and pay for, clean water,” might be the biggest obstacle to change, as noted in one recent article in the New York Times. The key to success of water and sanitation efforts is thus working with communities to create real demand for the services. Moreover, organizations must also monitor functionality and usage after infrastructure is installed. Clearly, health and other outcomes like productivity will only improve if people actually use the facilities on a regular basis.

The good news is that, if the work of building community demand is done upfront, slum families are willing and able to make the upfront capital investment — especially if it is payable in easy installments through loans from microfinance institutions. Better yet, engaging individual households in contributing to the costs of the infrastructure helps build a sense of ownership, which, in turn, mitigates maintenance issues.

2. Significant barriers to entry
Unlike traditional microloans, loans for water and sanitation must be offered in conjunction with a much broader set of services. These include not only demand creation, but also:

  • Assisting communities with technical aspects of construction
  • Liaising with the government for approval of household connections
  • Ensuring appropriate end-use of the loan
  • Monitoring functionality and usage of the infrastructure

Putting together a complete package to handle each of these elements can be quite daunting even for the most socially-oriented MFI. MFIs seeking to offer water sanitation loans should actively seek out a model that works within the constraints of their own operating environments. They might opt to build the capabilities in-house, actively collaborate with community-based organizations or otherwise offload some of these activities to a trusted partner. Grameen Financial Services Pvt. Ltd, for instance, has established partner NGO entities to handle crucial, non-financial activities.

3. Government support and subsidy
If the goal is to provide 100 percent of households in a particular slum with basic services, government programs that subsidize the costs of household level infrastructure are critical. The Slum Networking Project in Ahmedabad, which provided entire slums with a suite of basic services, is a case in point. The project required households to contribute a subsidized amount towards the infrastructure. The model depended on both household contribution (a key factor in instilling a feeling of ownership and responsibility for newly built toilets, taps and infrastructure) and subsidies, which eased the financial burden and enabled the participation of a large number of families.

Fifty percent reduction in water-related diseases
Given the complexities involved, is the effort to link microloans to water and sanitation work worth pursuing? The answer is an unequivocal yes. The cost of doing nothing is too high. Dirty water causes a host of diseases, and kills thousands of children annually. And with deliberate planning and a clear eye on managing through the intricacies at every stage, success is possible. In Ahmedabad, customer satisfaction surveys conducted by some of our partner organizations suggest that usage of infrastructure continues to be high (more than 80 percent) a few years after the facilities were constructed. An impact study (which included a different sample set than the survey) showed that incidence of water-related diseases, including typhoid, jaundice, diarrhea, cholera and malaria, as well as other stomach problems, had decreased by more than 50 percent in slums where households received both water and sewage connections.

Read the CGAP blog post that sparked this post “Microfinance for water and sanitation: An example of client-focused innovation.” Learn more about our work in water and sanitation.

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