Smart sanitation finance should recognize the varying needs and priorities of different market segments within rural communities and across programme areas, and provide a range of financial instruments to serve these different segments.
(Updated 8th February 2023: The authors have published a blog reflecting on this chapter and progress in sanitation financing since 2016, ‘Smart sanitation finance seven years on!‘ )
Effective sanitation finance is a key factor in the success of a phased approach to rural sanitation development: creating incentives for rural communities and households to invest in sanitation and hygiene improvement, and encouraging more rapid and sustainable progress to higher levels of service. Smart sanitation finance should be carefully designed and targeted to reach the least able, those who are most at risk of reverting to open defecation (OD) over time, and to encourage upgrading and improvement of sanitation services across the entire community. Critically, this finance should provide choice to the households targeted – choice of options and suppliers, and choices around installation – to improve the likelihood of sustained sanitation behaviour change.
This chapter from Sustainable Sanitation for All: Innovations and Insights proposes a range of sanitation solutions, including targeted toilet vouchers and toilet rebates that can be used to reward certified open defecation free (ODF) communities for their improved sanitation behaviour, and assist poor and vulnerable households to upgrade and improve their sanitation facilities. Conditional grants are also recommended to encourage the achievement of higher level collective sanitation outcomes, including 100 per cent use of improved sanitation facilities, improved institutional sanitation services, handwashing with soap, and effective sustainability monitoring.
