Supply Chain Analysis for Rural Sanitation Products and Services in Lao pdr

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Source: ACLEDA Bank.

As highlighted in the “Consumer Research to Inform Rural Sanitation Behavior Change and Marketing Communications for Lao PDR”, most non-latrine owners (82%) are not interested in using microfinance to purchase a latrine. The main reasons are that: (1) they do not know anything about microfinance (40%); and (2) have concerns about interest rates (38%). The majority of households surveyed prefer to 'save money and get a latrine later' rather than 'getting loan to get a latrine now'. Only one-fifth of non-latrine owners would like to obtain a latrine now by using credit.

However, evidence from Cambodia suggests that although many households initially do not want to borrow to purchase a latrine, this attitude can change as they are given more exposure to the concept. Pilots in two Cambodian provinces of a sanitation financing approach that included MFI officers attending group sales meetings (and offering loans for latrine purchases) found that in one province there was a strong preference for buying latrines on credit; and in the other province the number of latrines bought on credit grew strongly late in the pilot (Path 2013).

GIZ is establishing village banks in Lao PDR. WSP intends an experiment using these to provide household financing for latrines.

  1. Business constraints

Actors cited labor issues (availability, quality, and training), roads, insufficient demand, customers not paying, and access to finance as main constraints. The cost of inputs, availability of materials, Government fees and regulations, and corruption were generally not viewed as constraints by most actors.

Figure 23: Business constraints (percent of actors reporting each as a main constraint)

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