Tapping the market : opportunities for domestic investments in sanitation for the poor

This report examines private sector provision of on-site sanitation services in Bangladesh, Indonesia, Peru, and Tanzania, four countries where the local private sector already plays a major role in helping rural (and many urban) households construct and maintain sanitation. 

In each country, the study examines the preferences and circumstances of poor households and the performance of enterprises that provide sanitation-related services directly to them. It examines commercial and investment climate factors that may affect enterprises’ actual or perceived costs and risks, driving their decisions about increasing investment in their business. Specifically, the study seeks answers to the following questions:

• Is lack of interest by the domestic private sector a rational response to weak market potential, or are lack of enterprise viability and the use of inappropriate business models preventing it from taking advantage of market opportunities?
• Are investment climate factors increasing the (actual or perceived) costs and risks associated with doing business?

While the sanitation market in the four countries studied was found to be large, the report concludes that significant commercial and technological constraints are preventing the domestic private sector from tapping it:

• enterprises are not offering products and services households want to buy; and
• a weak investment climate s constraining investment