WASH-Loans: Evaluating the effect of microcredit on latrine uptake in rural Cambodia
In Cambodia, access to finance is cited as one of the primary constraints preventing the sanitation market from reaching scale. Producers of latrines often complain that lack of access to affordable capital prevents the expansion of their business operations, while households cite financial limitations as a factor preventing them from investing in on-site sanitation. In an effort to help overcome this financing hurdle, WaterSHED-Cambodia, in partnership with a research team from the University of North Carolina-Chapel Hill, is conducting a study designed to test the viability of using microfinance to improve household uptake of latrines.
The intervention seeks to address the following research question:
- Does access to micro-finance, offered during the latrine sales process, improve latrine product uptake/purchase in the sanitation marketing project?
To answer this question, rural communes in the provinces of Kampong Speu and Kampong Cham have been cluster-matched and randomly assigned to either be exposed to standard sanitation sales activities only, or to be exposed to the same activities plus the offer of microcredit from a local microfinance institution (MFI). Through partnerships with two leading Cambodian MFIs – Amret and PRASAC – WaterSHED-Cambodia is deploying credit agents to regularly attend sales meetings in selected communes, while continuing normal, non-MFI-attended sales meetings in control communes.
WaterSHED believes that access to microfinance may serve to increase latrine product uptake in the sanitation marketing project. To measure the impact of microcredit, WaterSHED is collecting data on the use of loans during sales events, and comparing this alongside latrine sales being reported in normal sanitation marketing project areas. By comparing these data, WaterSHED will assess whether or not sales are being augmented by the offer of micro-finance. Further surveying of sales event attendees is serving to provide qualitative, contextual information on factors that potentially influence purchasers and non-purchasers, such as previous exposure to sanitation marketing and/or microfinance.
The study launched in October 2011 and will continue for six months, ending in March 2012. As there is currently little evidence-based research that explores the link between microfinance and the uptake of safe sanitation products, the results of the study will be important in both sanitation and microfinance communities. By generating evidence-based recommendations, this innovative project will serve to inform practitioners about the viability of utilizing microfinance to improve access to sanitation in rural Cambodia, and similar settings throughout Southeast Asia.
WaterSHED microfinance pilot project overview
Primary Question
- Does access to micro-loans offered during the latrine sales process improve latrine product uptake in the WaterSHED sanitation marketing project?
Study Design
- Limited to two provinces – Kampong Speu (18 treatment, 61 control) and Kampong Cham (19 treatment, 41 control) with active suppliers and sanitation marketing campaign as of June 2011*
- Additional inclusion of “high exposure” communes in treatment (n=5) and control (n=11) areas to determine if higher exposure affects uptake
Primary Outcome Measures
- Latrine uptake – measured as a % of commune population (households)
- Latrine uptake – measured as a % of meeting attendees
- Number of loan applications
Participants
- PRASAC (25 communes)
- Amret (12 communes)
- Lien Aid
- WaterSHED
- UNC
Timeline
- Training for MFIs, sales agents, and Lien Aid interns completed in September 2011
- MFI intervention: 03 October 2011 – 30 March 2012 (6 months)
- MFI credit agents attend sales events in treatment communes on an ongoing basis for six months, while submitting data on uptake of loans for latrines to WaterSHED (monthly)
- Completion of data gathering – April 2012
- Analysis and results – May and June 2012
Data Sources and Purpose
- Commune Indicators
- Includes demographic and economic indicators at the commune level
- Collected by National Institute for Statistics (NIS)
- Used for matching as well as controls in final analysis
- Sanitation Marketing Campaign Indicators
- Includes total latrine sales as well as meeting attendance at the commune level
- Collected starting in January 2011 for baseline data, ongoing collection throughout the pilot
- Information on attendance collected from meeting rosters by Lien Aid interns
- Information on latrine sales collected from meeting data using receipts/order forms
- Loan Information
- Collected by MFI in aggregate as well as information on each loan including type of loan (group versus individual), loan amount, repayment terms, and purpose
- Household Survey
- Information about household demographics, reasons for purchase, financing used, previous experience with microfinance, and intention to use microfinance for latrine purchase (for those hearing MFI presentation)
*Communes were matched in groups of 3-4 based on latrine access, a proxy for wealth (roof type), and exposure to sanitation marketing; randomized to receive either the intervention (MFI credit agent participation) or normal sanitation marketing activities (based on baseline sanitation marketing data from January – June 2011).
