Financing On-Site Sanitation for the Poor

This study provides evidence on alternative financing approaches for on-site household sanitation from case studies in six countries: Bangladesh, Ecuador, India, Mozambique, Senegal and Vietnam. The study systematically compares these approaches based on a set of common indicators, including in terms of the effectiveness in the use of public funds, leveraging and targeting. The cases make a compelling case that partial public funding can trigger significantly increased access to household sanitation. The most relevant question is not "are subsidies good or bad?" but rather "how best can we invest public funds?". The study found that micro-finance mechanisms, such as revolving funds, can be particularly effective at leveraging household finance for sanitation. Subsidies paid on an output basis, for specified levels of service, can also be more efficient than subsidies paid to cover a percentage of the costs of pre-specified technical standards. Many questions are left opened for future research, however, and are listed in the conclusions to the study. A Spanish version of the report is also available.