Letter from India: How Poop is Becoming Big Business for Small Companies

I was in Mumbai, making a long commute across town after a week full of events and conferences. When we arrived in South Bombay, my taxi driver slowed down to point out a nearby slum, dangerously perched on one of the slopes of Malabar Hills—Mumbai’s most upscale and expensive property. I could see a few narrow lanes crowded with women washing clothes, utensils, open drains with children squatting over them—a loose tap with gushing neon blue water—and the overwhelming stench of feces.

Coincidentally, this was World Toilet Day, November 19. I had just spent the past week attending discussions to raise awareness about the sanitation crisis in India. Nothing could match the immediacy and stark reality of the moment as I stared at fecal sludge lining the slum’s narrow lanes against the backdrop of high-rise buildings and penthouses.

The ‘wow’ factor to make the sector more attractive for talented and ambitious entrepreneurs is missing. We believe that human waste treatment, reuse and its conversion into valuable by-products, presents an underexplored potential and a hidden business opportunity.Luan Nio, Enviu

India’s sanitation crisis is astounding. In a 2016 study by WaterAid, India topped the list for the highest number of urban dwellers without access to sanitation and the highest number of open-defecators. More than 157 million Indians (41 percent of the population residing in urban areas) live without adequate sanitation and more than 40 million people in India defecate in the open. There have been efforts to address this growing and precarious issue, but most toilet schemes fail due to administrative apathy, lack of maintenance, insufficient water, unsanitary habits, and a lack of focus beyond infrastructure.

Sanitation for All

This month marks the one-year anniversary of the United Nation’s Sustainable Development Goals (SDGs). The SDGs, 17 goals covering a range of development areas (relating to poverty, health, education, sanitation, and clean energy among other issues), aim to achieve specific targets by 2030. SDG 6 focuses on ensuring availability and sustainable management of water and sanitation for all.

Engaging a range of players in a coalition is critical to achieving lasting improvement to the sanitation crisis in India. The government and others are beginning to understand that small and growing businesses (SGBs) have become a promising and sustainable tool to help mobilize for the global goals.

Small businesses can help governments and corporations build reliable value chains and introduce new services into local markets. They create employment in emerging markets, and increase access to goods and services that could potentially improve the lives of the underserved.

Business solutions

A fascinating example of a business solution to the sanitation crisis in India is Samagra Sanitation. Founded in 2011 by Swapnil Chaturvedi, famously known as “Poop Guy,” Samagra is a small business working at the intersection of design, technology, and behavioral science, to tackle the issue of open defecation in 140 locations in Pune, India.

Samagra operates in urban slums and has so far built more than 300 toilet seats with more than 150,000 daily users, almost half of which are young girls and women. Samagra designs, manages, and renovates community toilet blocks in partnership with the municipality, which pays for maintenance and utilities like water and electricity. Each block is run by local women who act as Kiosk Managers (or “Loo-Preneurs”) and is regularly cleaned by Samagra's “Cleaning Force.”

Slum dwellers can use Samagra toilets for free, but those who pay for usage get access to value added services or “LooRewards” such as mobile tops-ups, bill payments, banking, and health services. The cleaning staff also receives 100 percent of the revenue collected. In this way, the impact of Samagra goes beyond better sanitation to give women in these communities a means to earn a stable income.

Changing Perceptions

What is often missing from even the savviest of entrepreneurial efforts is a systematic process for conceptualizing a business model that replicates global best practices. Enviu, a developer of innovative social businesses from the Netherlands, is working to harness the power of business in India by co-creating impact businesses that can drive system-change. By leveraging the experience and knowledge of its network across the globe, Enviu works with local businesses to develop what it calls “bottom-up solutions”.

In late 2016, Enviu began working on a multi-year effort with the Bill & Melinda Gates Foundation to co-develop and refine business models focused on Fecal Sludge Management (FSM). The foundation has focused for years on developing safe and sustainable sanitation solutions in India. Enviu plans to build on the existing network of foundation partners in India and on the work done by existing partners on sanitation business models globally.

“Entrepreneurial activity in the FSM sector has been extremely limited due to the type of work associated with the sector, specific knowledge required, and limited perceived profitability, which has resulted in very few innovation-focused business ventures addressing this problem,” notes Luan Nio, Enviu's country director in the U.S.

“Good sanitation is dependent on the public sector, which historically did not have the topic high on the agenda and invested insufficiently in basic infrastructure,” she says. “In addition to the infrastructural and ecosystem-based hurdles, the ‘wow’ factor to make the sector more attractive for talented and ambitious entrepreneurs is missing. We believe that human waste treatment, reuse and its conversion into valuable by-products, presents an underexplored potential and a hidden business opportunity.”

Luan adds that the direct impact will be to “establish companies that focus on reusing fecal sludge into valuable products, thereby demonstrating a business opportunity and attracting new talent to the sector.”

Enviu envisions that this project will lead to improved sanitation practices and a better working environments for operators. “We ultimately hope to create cross-linkages between industries, change public perception about human waste, and change the stigma around ‘poo’.”

Ecosystems

Due to the unorganized nature of the startup ecosystem in India, entrepreneurs working on sanitation issues are often doing so in silos–duplicating each other’s failures and unable to tap into the ecosystem support available due to low visibility. To address this challenge, Ennovent, a social innovation capacity developer, launched the Sanitation Innovation Accelerator – a nation-wide search for entrepreneurs who are developing sustainable solutions “across the rural sanitation value chain” and then supported these entrepreneurs in building and scaling their business ideas. According to Vipul Kumar, Ennovent's global director, “there is immense opportunity for organizations like Ennovent to drive business innovations and scalability and provide private investors a pipeline to infuse capital within the rural sanitation ecosystem.”

Small businesses alone are not equipped to end poverty; fighting the complexities of these issues requires collaboration and coordination. Foundations, governments bodies, corporates, and capacity developers play an undeniable role in eradicating poverty; however, they often overlook the role of small business, a large and important ally.

Public-private partnerships have significant potential to accelerate progress toward the 2030 UN sanitation target. An example of this collaboration is the recent partnership between USAID and the Toilet Board Coalition that brings together companies, NGOs, and business leaders to help mitigate unmet need for improved sanitation across the developing world (see, “Corporate ‘Toilet Coalition’ Takes Care of Business of Sanitation“).

Similarly, Water for People, a non-profit international development organization, launched the “Sanitation as a Business” (SAAB) program to strengthen the sanitation supply chain, in collaboration with local communities, governments, and civil society organizations. The program seeks to provide community-driven sanitation services and move away from subsidy-reliant programs.

In India, Water for People is working in the Muzaffarpur and Sheohar districts in Bihar, and has so far identified 15 entrepreneurs in the region and supported them in creating one-stop sanitation shops that provide individuals from local communities with all the resources needed to design and build a latrine. Water for People provides local entrepreneurs the training and technical assistance needed to run these shops, and gives them access to micro-finance institutions for loans. That lets communities and the local private sector drive sanitation solutions and the demand for safe toilets through ease of access and behavior change.

Potential

Small and growing businesses are run by entrepreneurs who are invested in local communities and have deep insights into the problems that these communities face. With their lean business models, localized solutions, and potential for global replication, they play a crucial role in addressing the challenges outlined by the UN global goals.

As the role of small businesses in addressing critical issues faced by India becomes more glaring, intermediary organizations like capacity developers, technical service providers, and impact investors, as well as corporates and the government are beginning to realize the need to enable these businesses to grow, spread, and scale. The Sustainable Development Goals need local solutions to be sustainable and small and growing businesses play a crucial role in ensuring the success of these local solutions.

Disclosure

Photo credit: Mandolin Media.

This is the third in a four-part series in partnership with the Aspen Network of Development Entrepreneurship exploring the role of small and growing businesses around the world in achieving the U.N. Sustainable Development Goals. See other editions here:

How Small Businesses Are Having Big Impact on Global Goals

Letter from Brazil: Collective Action to Help Small Businesses Achieve Development Goals

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