Social impact business models are challenging to scale in developing and emerging economies. Over the course of the past decade, social entrepreneurs have developed ventures intended to provide marginalized communities access to latrines and fecal waste management. Like many social impact businesses, these models have shown mixed success. That said, a few have demonstrated early signs of the potential to scale. Analyzing the business models of these firms may shed light on models for other sanitation-focused businesses to consider when establishing new ventures in the sector.
This study was designed by STeP to understand best practices in developing scalable business models in the water, sanitation, and hygiene (WSH) sector and provide insight into how firms do (or do not) create, deliver, and capture value within sanitation businesses.
Product innovations that leverage a traditional sales channel or business models such as those that sell directly to public and private sector (B2B) are omitted.
This resource was developed through significant secondary analysis of reports, websites, publications and other data sources as well as limited primary interviews. Insights are also presented within the Business Model Canvas (BMC).
- STeP analyzed 35+ sanitation ventures and identified three common business model innovations for deep analysis—microfinance, franchise, subscription.
- The microfinance model creates access by extending loans to the poor that cover upfront capital costs.
- The franchising model promotes latrine access as well as new economic opportunity for the local franchisees.
- The subscription model provide access to in-home or community toilets at no capital cost and charge a recurring fee for unlimited use during the fee period.
- The report outlines the general business model for these three model archetypes as well as a case study for an organization specifically deploying each model.