Becoming a sanitation entrepreneur against the odds in Ethiopia.
Published on: 02/04/2020
Have you even wondered why an elephant, a massive, powerful animal, can fall prey to a lion whose size is a tiny fraction of the elephant’s? That is the power of the lion’s attitude and determination. The following story is also a clear demonstration of the power of total commitment.
Assefash Tadesse, 32, is a grade eight dropout and a mother of five. In her community, like many other Ethiopian communities, she has seen children getting sick and dying from diarrheal diseases. She knows that her family members and neighbors openly defecate in the surrounding forests, and rarely prioritize investing in a household toilet. With much green space surrounding her village, the need for capturing waste is not always understood by her neighbors, who are used to using the outdoors to relieve themselves.
She often heard people chatting and complaining about their lack of money, the limited supply of good quality and affordable products, and their lack of knowledge about construction as the key reasons why they failed to construct private and safe latrines. Though she was not a Health Extension Worker (HEW) and lacked any formal training, she had an entrepreneurial spirit. Where her neighbors saw barriers, she saw an opportunity.
With training provided by the USAID Transform WASH project on sanitation marketing and business development at Yirgalem town in Ethiopia’s Southern Nations, Nationalities, and Peoples’ Region, she started manufacturing concrete slabs and fitting them with the low-cost, low-water requirement plastic toilet pan called the “Sato Pan”.
She started her business in September of 2019 after receiving a loan from the Omo Microfinance Institution with the support of project staff. She knew that embedding the Sato Pan in the slab would increase its price and that her potential customers were farmers who often lack much disposable income. However, Assefash was not deterred. She believed it would be possible to produce a good quality product, and that her neighbors deserved it and would be willing to pay for it. She saw that many households owned a motorbike, lived in a good quality dwelling, and were able to send their children to school in proper uniforms.
She also was aware of a savings and loan group being set up in her community. These were being organized by Plan International as part of the USAID Transform WASH project to help community members access affordable credit so they could invest in an improved sanitation facility. The Village Saving and Loan Association (VSLA) is a community-based platform where 15-25 household heads/members come together and save a little amount of money ranging from 5-20 birr as per their bylaws. The group is managed by a volunteer leader and get support from VSLAs facilitators who are responsible for screening, supporting the leaders, and linking members to local manufacturers. Even though all the VSLAs are established to provide easy access to loans for their members, the interest rate, payment period and loan sizes vary based on their bylaws.
A recent study on Sanitation Financing commissioned by IRC for USAID Transform-WASH in three regions of Ethiopia (which is under review), indicated that only 30.5% of the total savings were disbursed. Of the disbursed loans, only 20% were used for the sanitation related investments while the remaining 10% covered other expenses. Several factors have been associated with the low performance of VSLAs. Risk aversion and limited financial literacy among group leaders, low level of supervision and coaching from the facilitators, and also lack of guidelines and clarity on the core purpose of VSLAs were among the key factors for VSLAs’ low performance.
Assefash volunteered to become the facilitator of the VSLA in her neighborhood, closely working with the group leaders and others to ensure better record-keeping and planning. The leader and members recognized her commitment and members approved a loan to her in form of advance payment. This direct provision of individual member’s loan money greatly minimized possibilities for loan diversion.
Once she received the advance payment from the VSLA, she started working on producing latrine slabs and delivering them to her customers who had ordered them and paid in advance. She strove to deliver them on time and provided the installation service herself. She only accepts full payment when the household was satisfied with both the quality of the product and her installation work.
Nearly all the community now knows her well and they trust the quality of the products and services she provides.
Between September and December 2019, she sold 239 slabs embedded with Sato Pans. She has hired two employees (including her husband) to help keep up with the demand from households. She works with project-trained Sales Agents who promote her products (they receive a 30 Ethiopian Birr commission per sale – about $1.00). Even though she has no written business plan, she intends to sell and install products in 4 kebeles (villages) during 2020 and wants to expand her business to other nearby Woredas (districts) in the coming years. She also wants to diversify her range of products to include both superstructures and substructures.
When asked if there was a potential conflict of interest by being both a sanitation business owner and the VSLA Facilitator (who benefits from the VSLA providing loans to households in order to purchase her products), she replied that, “…the VSLA was …organized to ensure improved toilets were installed in the community. I am trying to deliver on that very promise. If the quality of the products had been poor, the customers would have rejected them. I am their neighbor and am always accessible to anyone.” As both the lion and Assefash demonstrate, with drive, passion and commitment, what may seem impossible can actually be achieved!
USAID TRANSFORM WASH sets out to improve water, sanitation and hygiene (WASH) outcomes in Ethiopia by increasing access to and sustained use of a wide spectrum of affordable WASH products and services, with a focus on sanitation. It does so by transforming the market for low-cost, high quality WASH products and services: stimulating demand at community level, strengthening supply chains, and building the enabling environment for a vibrant private market.
USAID TRANSFORM WASH is a USAID-funded project implemented by PSI in collaboration with SNV, Plan International, and IRC. The consortium is working closely with government agencies including the Ministry of Health, the Ministry of Water, Irrigation and Electricity, the National WASH Coordination Office and regional governments.
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