Author Archives: iDE

iDE shares its secrets to achieving impact and scale

The market-based organization launches an online knowledge hub that dives deep into 10 years of learnings and insights in building markets for WASH.

 

After building one of the most successful market-based sanitation programs in the world, iDE is sharing its secrets to achieving impact and scale.

iDE, a Denver-based international nonprofit working to end poverty, launches a knowledge hub for market-based development professionals and enthusiasts, publishing over 10 years of learnings and insights from building markets for WASH (water, sanitation, and hygiene) in developing countries around the world.

Explore the site: washmarkets.ideglobal.org

“Critical for our own continued learning, even though it was not required by any donor, we decided we needed to write down, analyze, and reflect on the body of experience and evidence from our sanitation marketing program,” said Yi Wei, Director of Global WASH. “However, instead of the dreaded 100-page report, we decided to conduct this reflection and learning in a modern, dynamic way where others can be invited in to poke around and ask questions.”

iDE’s rigorous evidence and distilled insights highlight five key findings:

  • Markets can be effectively leveraged to reach the poorest and most vulnerable populations.
  • Product and business model design must start with a deep understanding of customer needs, and recognition that customers and their needs may change as the market evolves.
  • Iterative, data-driven programming is required to keep pace with rapid market changes.
  • Business and consumer financing are critical to deliver inclusive results, but nascent and dysfunctional markets mean that implementers must be creative in designing workable solutions.
  • Sanitation marketing and behavior change toward consistent latrine use can positively impact health.

The site primarily focuses on learnings from iDE’s sanitation program in Cambodia, which has facilitated the sale of 309,692 latrines (as of January 2019), improving coverage from 29% in 2012 to 69% today. Learnings from iDE’s other sanitation programs in Ghana, Ethiopia, Nepal, Bangladesh, and Vietnam will be added later this year and next.

iDE’s site shows that market-based development requires constant innovation and iteration, which are not without hard-won lessons. Flexible, supportive partnerships are also critical to create the space to experiment, innovate, and learn adaptively. iDE opens its doors to share this history and experience in a spirit of collaboration and learning.

“The goal of the microsite is not to stand as a static repository of knowledge, but rather, to serve as a conversation starter. We hope visitors will be inspired to unpack assumptions, reconcile evidence with theory, and share with us their reactions,” said Wei.

If water is the key, finance options are the lock that must be opened.

iDE-P_2018 World Water Week, panel 2_Photo credit to Water.orgVedika Bhandarkar, Managing Director of Water.org India, speaks on a panel with Yi Wei (left), iDE Global WASH Director, and Hon. Mansour Faye (right), Senegal’s Minister of Water and Sanitation. (Photo courtesy of Water.org)

 

At World Water Week 2018, iDE along with WASH colleagues called for integrated financial systems to deliver water and sanitation solutions in the poorest locations.

 

To meet the Sustainable Development Goal for clean water (SDG 6, Ensure access to water and sanitation for all), we need smart(er) systems that integrate finance and market-based product delivery is necessary.

As part of this year’s World Water Week in Stockholm, Yi Wei, iDE Global WASH Director, co-hosted a joint session called “Smart(er) systems for water and sanitation: subsidies, financing, and markets” alongside Joel Kolker, Program Manager for Global Water Supply and Sanitation Partnership (GWSP) of the World Bank, Vedika Bhandarkar, Managing Director of Water.org India, Hon. Mansour Faye, Senegal’s Minister of Water and Sanitation, Eng. Benson Ajisegiri, Nigeria’s Director of Water Supply and PPPs, Ministry of Water Resources, and Social Finance.

Click here to learn more.

Join the discussion! New learnings and innovations in FSM (June 4-7)

iDE Cambodia Toilet Installation

Masons install a toilet for a customer in Cambodia. (Photo by David Graham/iDE)

As countries grow closer to reaching open defecation free, there’s a growing urgency to address fecal sludge management (FSM). Join iDE’s WASH team for an e-discussion on June 4-7 hosted by the Civil Society Water, Sanitation, and Hygiene Fund. 

Click here to join the discussion.

This is an opportunity share insights, experiences, and new innovations in FSM. Each day, iDE will lead the discussion with an opening question. iDE WASH teams from around the world will join the discussion—sharing new cost-effective solutions, results from a pilot in Cambodia, and an assessment of the FSM value chain.

iDE pioneered the market-based approach in the sanitation, incorporating private businesses, NGOs, and government stakeholders. In 2003, iDE Vietnam launched the world’s first market-based sanitation program, and, since then, the model has been successfully replicated across iDE’s global portfolio and by other organizations.

A discussion between WASH funders and grantees

Innovative strategies, new pathways, and more to learn

By iDE

iDE had the opportunity to participate in a conversation amongst various WASH grantees and funders this past fall. From the power of incentives to output based aid, dive into the discussion—the latest innovations in sanitation marketing and questions that still need exploring. Read lessons learned from designing and implementing results-based WASH programs.

iDEglobal.org-_A_1200x900_Illus_DesignToContext.jpg

 

Why WASH organizations need to hire and grow business-savvy leaders

Ghana_Sama Sama Launch_IMG_3045 (1)

Valerie Labi, iDE WASH Director in Ghana, speaks at the launch of Sama Sama, a sanitation social enterprise in northern Ghana.

By Yi Wei, iDE Global WASH Director

Every organization knows the pain and disruption caused by bad hiring decisions, or waiting for an employee to develop the necessary skills to excel in a position he or she is not a fit for. I work for iDE, a nonprofit organization that has been implementing market-based development programs for over 30 years. When it comes to successfully managing a sanitation marketing program, hiring business-savvy program leadership is critical.

If we truly want to drive progress towards the U.N.’s goal to “ensure access to clean water and sanitation for all,” I believe these four things should be considered by any organization working in WASH:

  1. Invest in recruiting talent with business acumen.
  2. Identify and develop business leadership skills.
  3. Incentivize potential leaders competitively, taking into account the opportunity cost candidates face forgoing potentially lucrative private sector positions, and not just the prevailing wages of the nonprofit labor market.
  4. Incubate and foster an organizational focus on training and knowledge sharing.

Dive deeper into the four strategies for building a business-savvy team. 

Systems Thinking Builds Markets


200,000 latrines sold by microentrepreneurs in just 18 months

We are celebrating a major milestone: 200,000 latrines sold by microentrepreneurs in Bangladesh in just 18 months. This achievement comes after three years of laying the foundation: research, product design and development, and putting business-thinking to work. The iDE Bangladesh team stuck by the principles of systems change but tailored the process using adaptive management.


A systems approach to sanitation drives scale, sustainability, and social welfare.

When market actors are connected and incentives aligned, the whole system benefits—improving health and social outcomes for consumers while increasing the market’s economic sustainability. The Bangladesh program encourages private sector service providers to produce high-quality products that respond to the sanitation needs and demands of rural Bangladeshis. Working with market actors across public, private, and civil sectors to engage the whole system drives improved sanitation.

A systems approach: Bringing the public, private, and development sectors together to address sanitation.

Building a business case for improved latrines.

How do all the different approaches used to tackle sanitation challenges fit together to drive progress?

When contracts are not enough: adaptive management and private sector engagement.


Rethinking sanitation in Bangladesh started with redesigning the toilet.

The SaTo pan, prototyped by American Standard in the U.S. and then tested by iDE in Bangladesh, sparked a new evolution in affordable, hygienic latrines—the ingenious trapdoor design requires less water than a traditional P-trap. This innovation was conceived by engaging with end-users—understanding why they did (or did not) use sanitation products and what they prefer. This upfront investment in research and design strengthened the viability of the final product in the marketplace.


Adaptive techniques for marketing at the last mile.

Markets are dynamic—the Bangladesh program employed an adaptive management approach to address shifting perceptions, unforeseen challenges, and new opportunities. By identifying unknowns upfront, running mini-pilots to keep experimentation flowing, taking time to find and fix leaks in the supply chain, and documenting each stage of the process, the team built a robust process of questioning, learning, and exploring that keeps them nimble throughout the project. Improving sanitation at the last mile takes a willingness to learn, a flexible mindset, and the courage to shift course when necessary.

Four ways to increase experimentation in your theory of change.

How can small businesses leverage their collective skills and buying power?

Adapting marketing approaches to today’s evolving consumers.

How market segmentation can increase latrine uptake among hard-to-reach consumer segments.


Journey to cost-effectiveness.

After three years of investment and innovation, it costs iDE and our donors $11 to empower a family to buy a latrine. With a solid systems foundation in place, we are experiencing rapid sales growth, driving down per-unit latrine cost to even lower levels than in the pilot. Families who purchase a latrine are seeing $205 in health and work-related savings per year. At this rate, we will reach 200,000 more households by 2019, outpacing our original target by more than 100,000 toilets.

 

For more information on iDE’s sanitation programs, please visit ideglobal.org

Developing Markets for Sanitation: A Blog Series

In response to the growing prevalence of market-based approaches to sanitation, the Bill & Melinda Gates Foundation convened a meeting between three leading sanitation development practitioners—iDE, PSI, and Water for People—to discuss their experiences in building supply capacity and demand for sanitation products and services, and possibly develop a joint understanding of the process. The result of those discussions are presented in this four-part blog series.

PART 4 of 4: For the Future: Making Markets Work for Everybody

Read Part 1 of 4: The Basics: Terminology, Organization, and Process
Read Part 2 of 4: Selling Sanitation: Who Does What?
Read Part 3 of 4: Achieving Sustainability and Measuring Results

When Do Markets Work?

Markets are not the silver bullet solution to all aspects of the sanitation crisis, and there is a limit to what markets can and cannot do. A market-based approach will only work under promising market conditions, which are determined by:

  • The market opportunity and consumer demand.
  • The level of consumer dissatisfaction with existing practices, designs, and/or pricing.
  • Sufficient market size for business owners to consider investing.
  • Sufficient market density to make it cost effective to promote and deliver the products / services.
  • Existing physical infrastructure for production and transportation.
  • Familiarity with market-based transactions within the community.
  • If the society is organized more around bartering or gifting, then a system based on buying and selling may pose challenges for adoption.
  • The priority given to spending on latrines within the household and whether there is sufficient disposable income. Households who are focused on covering basic needs, such as shelter, school fees, and food will likely not make latrine purchases a high priority.
  • The regulatory environment, including the government’s ability to enforce existing rules and improve regulations based on changing market conditions.

Even under ideal market conditions, market actors are driven to maximize profit, which provides little incentive to target the poorest of the poor. With this in mind, the group (and the sector as a whole) discussed two solutions—sanitation financing and smart subsidies—for ensuring that sanitation markets expand their reach to whole populations.

Photo by iDE / 2016

Finance Options

Research and experience (for example, the iDE-commissioned Willingness-To-Pay study)⁠ show that access to financing can significantly increase demand for sanitation at market price. Bottom of the pyramid customers may not be able to pay the full retail price of a latrine in one large single transaction, but they may be willing and able to pay in installments by taking out a loan to finance the purchase of a latrine. Financing can be an accelerator of demand. Repayment rates in iDE’s experience have been 100%, indicating the low-risk nature of sanitation loans in the Cambodian context.

PSI and Water for People are also experimenting with consumer financing for sanitation. The main results show that there is strong demand for consumer financing, but the sector is still working to develop a model that allows for financial sustainability and operational compatibility for the financial institution partners.

PSI has also demonstrated that there is demand for supply side financing, which can serve as a “carrot” of sorts to motivate businesses to cooperate with the NGO on matters such as record keeping.

Photo by Water For People

Smart Subsidies

A market-based approach does not mean the total absence of subsidies. In fact, everything we do as market-based NGOs is a form of subsidy, including R&D, capacity building, and demand creation activities. But practitioners should think about how subsidies can be used in a more strategic and targeted manner. In doing so, it is useful to think about subsidies in two categories. The first comprises subsidies for “behind the scenes” market development activities, while the second category is more closely aligned with traditional “direct” subsidies to consumers and businesses.

The group agreed that subsidies should be focused primarily on the first category, “behind the scenes,” which often include functions such as those listed above: R&D, capacity building, and demand creation. Product design is often a critical component of developing a healthy market, especially in cases where no affordable, desirable products or services exist. From the group members’ experiences, demand creation is also an area that often needs to be subsidized, particularly in the initial stages when trying to introduce a new form of service that users are not strongly “pulling” for on their own. In no instances have we seen businesses investing sufficient resources in actively generating demand to rapidly increase uptake. In fact, it is a common business practice in these markets to passively wait for customers to show up and sell only when a product is requested. As such, practitioners should be prepared to invest heavily in demand generation activities as a means of building the market. With that in mind, any demand creation program should be aware of customer acquisition costs and make an intentional decision about who should bear that cost and for what period: the NGO or the business.

Group members also agreed in their skepticism of the second category of subsidies, which comprises traditional, direct subsidies to consumers and businesses. This type of subsidy has the potential to create demand, crowd in other investments, and provide a one-time incentive for adopting a particular behavior (buying a toilet, in this case). However, direct subsidies to the customer-business transaction also have the potential to distort incentives on both the consumer and supply chain side, and to erode market health over the long term. Given the potential for these subsidies to undercut market development, the group agreed that they should be limited to those customers who genuinely cannot afford to pay at market price. In these cases, value-added services like loan financing can play a crucial role. The group members encourage other organizations to consider developing “smart” subsidies that precisely target poor customers through existing channels and market mechanisms, minimizing distortions in the rest of the market.

Photo by Kiran Thejaswi / PSI

Main Ideas for Building Markets

  • A market-based approach implies scale – we don’t do things one village at a time; you can’t tell a business where to sell and where not to sell. They will sell wherever they identify a profitable business opportunity, and this allows the impact to be district and country-wide.
  • Developing sanitation markets is not an add-on accessory effort to your existing sanitation approach. You need competent staff and you need to invest in quality. You need to have a team dedicated to sanitation, not someone who’s doing sanitation AND water supply AND business development, etc.
  • The market-based approach is also not a silver bullet. It does not work in EVERY circumstance, just like any other approach.
  • Market facilitation does not mean a lack of subsidies or incentives. Everything we do is subsidy. It’s just a matter of where you inject the subsidy. Use subsidy in a way that minimizes market distortion while maximizing impact.
  • You need to be nimble, iterative, and responsive to what you’re learning real-time from the market.
  • In order to do market development effectively, your organizational culture needs to be business-minded. It needs to be a part of your DNA. A handful of trainings and a set of guidelines will not be sufficient to respond to real-time problems. Product innovation alone is not enough. You need to get the product right, but the innovation really happens in the business model.

Read Part 1 of 4: The Basics: Terminology, Organization, and Process
Read Part 2 of 4: Selling Sanitation: Who Does What?
Read Part 3 of 4: Achieving Sustainability and Measuring Results


iDE creates income and livelihood opportunities for poor rural households. In the WASH sector, we design and build markets for products that have the potential to transform people’s health by preventing diarrheal-related disease. Yi Wei ywei@ideglobal.org

Population Services International (PSI) is a global nonprofit organization focused on the encouragement of healthy behavior and affordability of health products. PSI uses a market development approach to deliver sanitation and fecal sludge management products and services in a sustainable manner.  Genevieve Kelly gkelly@psi.org

Water For People exists to promote the development of high-quality drinking water and sanitation services, accessible to all, and sustained by strong communities, businesses, and governments. Steve Sugden ssugden@waterforpeople.org