World Toilet Day is a reminder for development actors of the Sustainable Development Goal’s 2030 target. Namely, to ensure everyone has access to a safely-managed household toilet. From construction, to usage and financing, there are a variety of issues surrounding toilets. Athena has several projects in this area – such as our 3ie project on toilet construction and usage in Uttar Pradesh, India. For World Toilet Day, our Consultants share their insights from recent field visits to Trichy, India and Accra, Ghana for our projects on fecal sludge management and toilet sanitation financing, respectively.
Our Field Experience from Trichy
Trichy or Tiruchirappalli, is an ancient city in the Indian state of Tamil Nadu. It is known for its rich history, numerous temples, the Rock Fort, and being on the banks of the river Cauvery. As of 2017, Trichy became the first city corporation in the state to achieve ‘Open Defecation Free’ status. The city’s 450 community toilets claim full functionality, and are operated and maintained by women’s Self-Help Groups with a high degree of success1.
The City Corporation has covered 30% of the city with underground sewerage systems (UGSS). It will cover the remaining core area under phase II funds sanctioned for the project under AMRUT scheme. The uncovered areas of the city are likely to be covered under phase III, in the next 8 to 10 years. The city currently has a well oiled Faecal Sludge Management ecosystem: the majority of unconnected households have constructed septic tanks on their premises. In order to address the waste disposal needs of this large section of the population, the corporation has begun construction of a Faecal Sludge Treatment Plant (FSTP).
What does Trichy need in the way of Faecal Sludge Management?
Though the FSTP project is seen as an intermediate solution by the city, 100% expansion of UGSS has practically been challenging in the context of developing countries. Before evaluating the feasibility of sanitation solutions, understanding the ground reality of Trichy’s sanitation situation is crucial. A team from Athena traveled to the city, conducting interviews across the ecosystem and gathering useful insghts from citizens and government officials.
The Sanitation Context in Trichy
The community toilet system in Trichy is well functioning, and 140 out of the 450 toilets are operated by Gramalaya. Gramalaya is a voluntary organization, operating through its WAVE federation (SHGs). The community toilets levy a small user fee and manage the day-to-day operations including basic maintenance work. While the SHGs are keeping he 140 toilets in a good condition, many of the other toilets are poorly maintained and unsuitable for use. The Corporation is renovating these toilets, following which the WAVE federation indicated interest to take over the operation and maintenance work. However, they have identified lack of regular availability of human resources for maintaining the toilets as a roadblock for smooth functioning. As a result, they are seeking knowledge on technology-based options that can assist them 24/7 without hassle.
Except for the toilets located within the UGSS-covered areas of the city, the majority of the community toilets are reliant on Onsite Sanitation Systems (OSS) for safe human excreta management. These tanks are maintained well, and cleaned on a regular basis by the Corporation workers.
Households located outside the UGSS-covered areas rely on OSS with majority of the households having constructing to standards. However, there is a small percentage of households without OSSs and have connected their toilets directly to open drains. This creates additional problems as open drains often face blockages and serve as breeding grounds for disease.
A systematic household level study to evaluate OSS that requires upgradation, redevelopment or new construction is therefore needed. Several schemes converging together can effect this sanitation transformation. Smart Cities and AMRUT schemes are perfect candidates for this, and donor funds which are heavily channeled towards technology based solution programming.
Customer Segmentation of Sanitation Financing Products in Urban Ghana: Identifying Opportunities for Market Growth
Ghana has been observing World Toilet Day since 2009, four years before the United Nations recognized it. However, Ghana continues to grapple with the enormous problems posed by sanitation. This includes low access to adequate and safe compound sanitation, an over-reliance on unhygienic public toilets, open defecation and inappropriate disposal of feces.
Water & Sanitation for the Urban Poor (WSUP) is implementing a holistic approach to citywide sanitation project. It aims to improve sanitation outcomes under USAID’s Sanitation Service Delivery Programme. It focuses on the Greater Accra Metropolitan Area (GAMA) and Kumasi Metropolitan Assembly (KMA). As part of this programme, WSUP commissioned Athena Infonomics to conduct a study aimed at improving household’s access to financing products for toilets in the low income urban communities (LIUCs) in the focus cities. This study aims to: i) provide micro-finance institutions (MFIs) a clear understanding of the most suitable customer segments for their toilet loan products; and ii) provide insights on cost incurred by households in accessing toilet loans and capture their perceptions of an ideal toilet loan.
During September 2017, the study team completed a field mission to better understand the experiences and perspectives of MFIs and toilet sales agents (TSAs) on ‘toilet loans’. These discussions provided information on their experience in terms of toilet loan uptake, customer identification, loan processing. They also looked at availability and cost of funds, outreach and marketing costs; and strategic outlook for toilet loans including flexibility on product attributes and risk management.
Barriers in Toilet Loan Financing in GAMA and KMA
On the demand side, micro finance is enhancing access to financial services by households. Yet there is an aversion to avail credit for toilet construction among them. Most households do not perceive toilets as income generating in comparison to a business loan. Fear of banks, along with a perception towards toilet loans features as ‘unfavorable’, affect those considering toilet loans.
On the supply side, toilet sales agents are promoting toilets and toilet loans in select assemblies. However, their incentives appear to be inadequate coupled with weak linkages with the MFIs. MFIs offering toilet loans are mostly new to the sector with little experience and expertise in managing toilet loans. MFIs also do not have dedicated staff with an exclusive focus on toilet loans. They also don’t incentivize their staff to promote toilet loans as it may impact their existing loan portfolio. Market interest rate for toilet loans ranges between 30-36%: some MFIs are offering a subsidized rate (16-17%) with donor support.
The supply side also shows the performance of masons, artisans and sub-project implementers (small & medium enterprises) falling short of demand. During the field mission, our team found that the Tema Metropolitan Assembly (TMA) has a long waiting list of paid up households who are awaiting toilet construction.
While customers are taking toilet loans in low numbers, they are gradually increasing. Many households from LIUCs are willing to construct toilets if they can spread the cost over time by savings/borrowings. However, some households find it challenging to save towards a toilet whilst paying for the use of public facilities.
The study is seeking to systematically map all the aspects that disrupt the market for toilet loans. It will also map levers for change/improvement. We will additionally engage with about 400 compound landlords/landladies, their tenants and self-contained households across GAMA and KMA next month. We will train the field team by the end of this month. The insights will help segment toilet loan customers and their profiles, issues, challenges and reservations, (if any) towards loan uptake. This potentially helps MFIs with effective targeting of potential toilet loan customers. We will also undertake additional analysis, identifying the determinants of landlords/landladies’ willingness-to-pay for a toilet, including behaviors and perceptions.
The findings help identify practical responses to empower MFIs to better target and support households to fill the financing gap. However, we critically need to understand the underlying issues and challenges preventing SMEs involved in toilet construction and installation. This ranges from catering to current/future demand and identifying a set of practical solutions.