Learnings from Bihar, India An evolutionary process and the impact of a market development program to create a functioning sanitation market

Transcription

1 Learnings from Bihar, India An evolutionary process and the impact of a market development program to create a functioning sanitation market Shankar Narayanan PSI India UNC Water & Health Conference th October 2015

2 Divider About Slide Us

3

4

5

6

7 Market Failures Market failures When self- interested choices in markets do not result in socially efficient allocation Examples Markets for goods and services are lacking Externalities and common pool resources Principal agent problems and moral hazard Factor immobility Inequalities

8 NGOs Construction Companies Donors Community Health Workers Manufacturers Product Designers Government agencies

9 NGOs Construction Companies Donors MFIs Community Health Workers Local Artisans Manufacturers Product Designers Government agencies

10 3SI Bihar -Gaps in the Sanitation Ecosystem Product Design Manufacturing Aggregation Construction Financing 1.Construction & Aggregation - Fragmented supply chain for toilets 2.Product design - Toilet that are affordable are not aspirational and those aspirational are not affordable. 3.Financing - Liquidity and affordability across population segments; limited / no access to credit for toilet

11 Market Failure 1: Construction and aggregation Getting a toilet is cumbersome - Impacts time to delivery and cost for a household toilet page 11

12 Intervention Hook the entrepreneurs to provide easy access 209 Supply chain enterprises catalyzed Business Training and access to finance page 12

13 Scaling a broken supply chain ecosystem # of Enterprises # of Blocks Toilet enterprises/aggregators : 196 MFI : 3 Mould Manufacturer : 9 Door producer: 1 Door Supply chain Oct-Dec 2013 Jan-Mar 2014 Apr-Jun 2014 Jul-Sep 2014 Oct-Dec 2014 Jan-Mar 2015 Apr-Jun 2015 Jul-Sep 2015

14 Building a toilet is a lot more easier for Households now 120 Mean Mode Q1 (2014) Q2 (2014) Q3 (2014) Q4 (2014) Q1 (2015) Q2 (2015) Q3 (2015) N : 6626 Data source : 3Si Program - Helpline

15 Gap 2:What is the product? Costly toilets that do not solve HH problems or negate public health concerns. Quality assurance is nobody s concern. page 15

16 Intervention Offer choice and experience Standard PAGE 16 Deluxe Super Deluxe

17 Intervention Low touch quality assurance Quality assurance At production center At household level PAGE 17

18 Distance of Pit from Water Source- Remains a challenge 60% Above 30ft 10ft - 30ft Less than 10ft 50% 40% 46% 43% 49% 40% 44% 37% 47% 41% 44% 41% 45% 44% 30% 20% 19% 12% 15% 10% 11% 11% 11% 0% Q1 (2014) Q2 (2014) Q3 (2014) Q4 (2014) Q1 (2015) Q2 (2015) N : 1305 Data source : 3Si Program Technical Associate

19 Pit Depth Its no longer a deep hole in the ground 90% 80% 82% Above 10ft 70% 60% 50% 40% 30% 20% 10% 0% 1% Q1 (2014) Q2 (2015) N : 1274 Data source : 3Si Program Technical Associate

20 Gap 3 Access to toilet credit P P $ P $ O Easy to Convert 6-8% % % % 4 Hard to Convert P Can afford a toilet $ May need financing to purchase toilet May need subsidy to purchase toilet O Cannot afford a toilet Approx. 80% households required financial facilitation to construct basic toilet costing $ No MFIs has any experience in sanitation financing in Bihar. MFIs are not interested to get into sanitation financing due to lack of exclusive funding for sanitation.

21 Intervention Catalysing private sector credit supply MFI Consumer MFI Consumer Investors Wholesale Lending Institution MFI Consumers

22 Trends of toilet credit over time Applications Raised Loans Disbursed : 1462 : Oct-Dec 2013 Jan-Mar 2014 Apr-Jun 2014 Jul-Sep 2014 Oct-Dec 2014 Jan-Mar 2015 Apr-Jun 2015 Jul-Sep 2015

23 Are we reaching the poor? Toilets Cancelled : Toilets Sold to BPL Families : 5525 (37%) Oct-Dec 2013 Jan-Mar 2014 Apr-Jun 2014 Jul-Sep 2014 Oct-Dec 2014 Jan-Mar 2015 Apr-Jun 2015 Jul-Sep

24 Strategic Framework Health Impact Impact at Household Level More poor people access improved sanitation (and use it) More poor people have access to improved sanitation Impact at Enterprise Level Better performance of enterprises Market System Change More efficient and inclusive sanitation market system for poor Interventions Reform of supporting functions (Financing, Coordination and Innovation) Advocacy on rules, regulations, tariffs and public-private partnerships Increased demand and supply (product, price, place and promotion)

25 Summary Market failures are not treated as final, but rather become the target of programs or policies to improve them Patience and Time: Markets failures take time Market understanding: No one size fits all model Complementarity: Partners, sectors, interventions Systems approach: Players and Functions page 25

26 Thank You!

27 psi.org.in