This paper published by the Water for People describes Sanitation as a Business, an innovative approach to operation and maintainance challenges in household sanitation improvements, by describing the case of the implementation of the approach in the context of Malawi, by Water for People. The paper argues that programs that build latrines have consistently struggled to have impact or reach scale, and have often distorted the market environment in ways that have undermined future sanitation development.

The paper emphasises the relevance of this approach in the context of developing countries such as India by stating that the world would not be able to achieve even half of the Millennium Development Goals for sanitation at current rates of installation and consequently is projected to miss the sanitation MDG by more than 700 million people. Among the twenty two percent of those without access to improved sanitation, the greatest challenge remains in Asia and India in particular.

The paper argues that the reasons for this include:

• Sanitation is the unpopular cousin of water supply, and that investments, interest and motivation to transform the sanitation sector are lacking 
• Subsidised sanitation (free or discounted latrines) distorts markets, has yet to demonstrate success at scale, and has not expanded coverage once subsidies are removed
• Projects that rely on demonstration latrines to inspire, motivate, and convince community members are particularly ineffective
• In  places where loan finance has shown some promise (like India), it often fails to really grow beyond small scale successes.
• Sanitation Markets (SaniMarts) offer a passive private sector response to sanitation delivery, and social marketing initiatives show promise, but not scale as of yet.
• Community Led Total Sanitation has energised the sector for all the right reasons, but the failure of this initiative to monitor its work effectively has undermined its potential

The paper argues that the thinking on sanitation thus has to move away from the model that just focuses on provision of latrines for use, to a new way of thinking about sanitation delivery to improve economic, social and health outcomes. Sanitation as a Business tries to shift sanitation programming by changing the incentives and bringing the private sector in sanitation in new ways.

It identifies ways for the private sector to generate income from developing ongoing relations with households through sanitation services, and realise that they will gain more income by finding new clients with sanitation services, thus expanding coverage. Thus households are incentivised to use their latrines as designed, and businesses are incentivised to provide high quality maintenance to their clients.
 
The key to the Sanitation as a Business model is to redefine the relationship between private sector builders and households. In conventional sanitation programs, the sanitation entrepreneur (usually a mason) has a one off relationship with a household.  Sanitation as a Business attacks this problem by trying to understand and develop an ongoing relationship between entrepreneurs and households. This relationship allows, at a minimum, a profit making opportunity for continued and effective services provided by entrepreneurs.

In the best case scenario, the relationship provides a situation where both the household and the entrepreneur realize financial opportunities from sanitation. The key to this program is to identify ways in which sanitation is expanded because it is provided as an ongoing service between service provide Rs and households rather than a once off transaction  between a mason and a family around a latrine.

The paper describes the case of the implementation of the sanitation business model in Malawi. The paper ends by making some recommendations:

• Think of sanitation like a business: think of ways to make the business viable
• Know your market: Access market analysis to find what type of services the customers would like
• Get out of the way: Identify if the business model is flawed and correct it in time

Download the paper here