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You have to see it to believe it - no pun intended.  VisionSpring, the award-winning social enterprise, has released a new video highlighting its impact on base-of-the-pyramid communities around the world.

I had the pleasure of attending a recent VisionSpring community gathering here in New York, where the team debuted the video and introduced its new Chief Operating Officer, Sean Mayberry.  It's fantastic to see (pun intended) VisionSpring grow with my own eyes.  In just the past two years, they have spun out from Scojo New York, changed their name, launched a runway capital campaign and developed a fantastic storytelling machine.  In addition, they're working closely with leading BoP academics - most notably the University of Michigan's Ted London - to measure their social and financial impact on low-income consumers.

Without further ado, the new video:

VisionSpring 2009 Global Video from John-Michael Maas on Vimeo.

(Full disclosure: Acumen Fund, a sponsor of NextBillion, is an investor in VisionSpring.)

 The main problem with climate change, as David Keith highlighted in his brilliant TED talk, is that in the immediate short run, it creates winners and losers. And the major portion of this loss will be borne by developing nations almost all of whom are in the global south. The food productivity of a lot of areas will suffer. They will be plagued by more diseases. Water scarcity due to the melting of glaciers and evapotranspiration will limit the already acute fresh water supply. The list is endless.

Also, it is pretty much agreed that for the world to meet its climate change mitigation goals, business cannot continue as usual. Though businesses realize that adapting to the changing scenario is inevitable, they don't want to be at the receiving end of a raw deal in order to remain competitive.

I came across an interesting paper (via AccountAbility) titled The Business of Adaptation that strikes at the core of this issue. It's a call to action for the governments and UN from the businesses side. The paper admits that the private sector has been slow to adapt to climate change challenges faced by nations, however, it's also quick to point out that with adequate support in the form of appropriate financial mechanism and suitable international policies the private sector can act be a huge helping hand to the public sector to meet their targets.

Take the case of Microfinance institutions, for example. Given their existing rural market penetration they can always expand the range of services they offer as is the case with Grameen Shakti. It capitalized on the Grameen Bank's business linkages and evolved its financial package to become one of the largest renewable energy companies in Bangladesh. In the future, such a transformation could be performed as a public private partnership too, making the program more efficient.

 But one of the advantages of market based approaches is that they act as primary breeding ground for technological innovations. Some striking examples are Global Easy Water Products which provides affordable drip irrigation solutions to many small scale farmers in India, or Electricité de France, which, through partnerships with NGOs and the government, provided over 6,000 Mali homes with affordable electricity using solar source and low cost village grids.

Efficient business adaptation is hindered by various factors, however. These include lack of soft venture capital, absence of business linkages with the government, lack of awareness pertaining to climate change, and in some cases lack of adequate environments to do business. The report highlights some points and concrete recommendations, including the role of business and its mention in the UNFCC text, the role of national poilicies in enabling private sector participation, and the availability of suitable financing mechanisms that facilitate the participation of enterprise in addressint the effects of climate change. 

In the end, it comes down to a simple inevitable truth which is beautifully summed up by Jared Diamond in his best-selling book Collapse:

"Because we are rapidly advancing along this non sustainable course, the world's environmental problems will get resolved, in one way or the other....the only question is whether they will become resolved in pleasant ways of our own choice, or in unpleasant ways not of our choice, such as warfare, genocide, starvation...and collapse of societies.

If you're at all interested in the way climate change, business and the base of the pyramid meet each other, I suggest you give this report a read.

Some time ago during a BoP conference in Madrid I had the chance to talk with Felipe Acosta, commercial director from Codensa. I remember asking him, “Now that you seem to have figured out individual credit, are you thinking about going for Small and Medium Enterprises (SMEs)?” He replied “You are crazy! It’s so much more complicated that not even many banks get it right!” What Felipe said is the common view about offering financial products to SMEs: fraught with risks and not really profitable. That view, however, is starting to change.

Why are SMEs so important? A firm is normally considered a SME when it has sales below 2.5 (for a small enterprise) and 10 million dollars (for medium enterprises) respectively. According to Ayyagari, Beck, and Demirgüç-Kunt (2003), SMEs account for close to 60% of manufacturing employment in developing countries. Furthermore, SMEs often drive innovation, spur economic growth and facilitate the provision of goods and services – above and beyond other economic actors (Barreiro, Hussels and Richards, 2009).

The problem is that often SMEs have difficulty securing financing because they do not have the necessary systems in place to provide transparent information to investors or lenders and cannot supply the high collateral requirements that banks require for their higher operational risk. In essence, they slip between the cracks of the financial system, because they are too large for microfinance institutions and too small for commercial lenders.

Why are financial institutions perceived as not being interested in SMEs? The conventional view highlights SMEs opaqueness as a crucial factor. As a consequence of SME informality and its lack of full financial reporting, financial institutions find it very hard to ascertain whether SMEs have the capacity or the willingness to pay. The appropriate business model to profitably deal with such opaqueness has been argued to be “relationship lending” which relies primarily on “soft” information gathered by the loan officer through continuous, personalized, direct contacts with SMEs, their owners and managers, and the local community in which they operate, to mitigate opacity problems (Berger and Udell 2006). Nonetheless, relationship lending has a strong disadvantage in the high labor costs required to collect and keep updated such information. Furthermore, big financial institutions are perceived as less capable to process, quantify and transmit such type of information through their formalized communication channels. Therefore, traditionally small or niche banks have tended to take a more predominant role in this market.

This state of affairs has been changing in the last few years as the competitive pressure on most financial institutions in developing countries has increased. Banks have seen their margins in other markets fall due to the intensified competition coming from non-financial organizations such as utilities (like Codensa) or Mobile Phone Banking firms. This reduction in lending margins across segments has prompted banks to increase fee-based revenue and product cross-selling, with SMEs becoming a natural target for expansion. For many large banks, SMEs have now become a strategic client.

How are these financial institutions adapting their business model to serve SMEs? From a purely market-based perspective it is obvious that they should not resort to the relationship lending prevalent at smaller institutions. To facilitate arms-length lending (the opposite of relationship lending), many of these banks have greatly invested in the development of transactional technologies such as credit scoring and standardized risk-rating tools and processes. Moreover, they have started to develop specially targeted products such as asset-based lending, factoring, fixed-asset lending, and leasing (de la Torre, Martinez Peria and Schmukler, 2008).

Some of these technologies benefit from the effects of economies of scale and scope which are present in larger banks. For example, credit scoring models rely on statistical properties to assess risk and need a large number of clients and loans, which tend to increase with bank size. When credit scoring does not adapt to the client (credit scoring tends to work best for micro and very small enterprises), large banks can tap into more sophisticated risk management systems. In this case risk management is done primarily at headquarters by a credit analyst with independence and strong approval and veto powers. Finally, large banks can also take recourse to their service platforms, technical expertise, and IT and back-office infrastructures. These advantages can be very useful with relatively bigger sized (and thus more profitable) SMEs.

During this week and next, I and then Rishabh Kaul will be at the U.N. climate summit in Copenhagen that is intended to launch a successor to the Kyoto Protocol, and we hope to cover any relevant news and events. (That's COP 15, or the 15th Conference of the Parties to the UN Framework Convention on Climate Change, for those of who you like UN acronyms)

This should be a huge job because the success or failure of mitigating and adapting to climate change will impact agriculture, health, water, sanitation, migration, urbanization, and more.  And through the Clean Development Mechanism of the Kyoto Protocol, carbon finance could potentially move millions of dollars from the largest corporations in the world (looking to purchase carbon credits under a cap and trade scheme) to some of the poorest communities in the world (producing carbon credits through low-carbon development) - financing energy, cooking, and land use approaches that prevent the growth of carbon emissions.  Companies like D.Light and investors like E+Co are already taking advantage of this. 

But although they are often discussed here as the first and worst victims of climate change, the base of the pyramid is, at first glance, invisible in the negotiations in the shape of solutions to climate change.  Except in the context of avoiding tropical deforestation, carbon finance relevant to the base of the pyramid is at best a niche conversation.  If intensive energy use and land development equal carbon emissions, the base of the pyramid would by definition not appear to be terribly relevant.

This means I have less to blog about except for maybe some side events, but plenty to say. I would argue that there's is a huge amount wrong with the orientation of these negotiations and the fact that the base of the pyramid is absent gets to the heart of the issue. In a vicious cycle, the weakening of the negotiations will lead to failure in their intended impact, simply hurting the poor even more.

The G77 bloc is angling to increase the $10 billion in annual aid that developed nations are promising to provide in funding for climate change adaptation and mitigation.  But it seems likely that there will be plenty of double-counting of that aid money and it's not enough to begin with to address either mitigation (i.e. low-carbon development) or adaptation.  And it's unclear what this will go towards, who will manage it, what it will truly be intended to do.

As they have in previous years, the negotiations pit the world's wealthiest 1 billion people against the 3-4 billion who have gained a some level of prosperity and are rising quickly.  Who will cut back on carbon - those who already emit a lot, or those who are emitting some and want to emit more in the future?  With the negotiations set up like this, it quickly becomes a zero-sum game.  Since the UN process relies on the commitment of the nations that constitute it, as a zero-sum game it becomes useless as a force to raise the bar towards clean and sustainable development.

Left out of this picture are the 2-3 billion people who are essentially not using modern energy - at best a little bit of electricity from an unreliable grid, a little bit of kerosene for lighting, diesel to operate machinery or transport, and maybe charcoal or LPG for cooking.  But likely using firewood or other biomass for cooking and as likely as not having no access to electricity at all. 

These are the people this blog concerns itself with.  It seems counterintuitive that those who use the least energy currently are critical to an international agreement on reshaping our energy industries and ending deforestation as quickly as possible. But I believe they actually lie at the heart of any global deal to address climate change.

Where does this third of humanity actually show up in the negotiations?

They are the anonymous presence assumed to be within the growth curves in projected energy demand in Asia and Africa.  They imbue these growth curves with moral force because basic services, health care, education and more must reach these billions in the decades that are in question in the negotiations.

These growth curves of energy demand in Asia, and to a lesser extent Africa, are the mountains that the negotiators must climb to reach an agreement.  It is assumed that this demand will be met with fossil energy unless otherwise subsidized, by the West or at the expense of the poor.  And these curves are steep. 

They would probably be insurmountable except for a few things. 

The biggest thing that the developed nations could do to flip this zero-sum mentality and unstick climate negotiations would be to act like they truly cared about access to energy in the developing world - particularly for those whose lack of access is most severe.

Most of the growth in energy demand in Asia and Africa will come from industry but the moral imperative of that growth comes from the people who are in energy poverty and need to get out of it.  Yet this is a relatively small amount of energy demand - it is not the first kilowatt of electricity demand by households at the base of the pyramid that is going to push us beyond the safe levels of carbon in the atmosphere. 

The truth is that it is quite likely that even with no climate treaty at all limiting carbon-intensive development, very few of the 1.6 billion people who are off the grid right now would get on the grid any time soon.  From India to South Africa, electricity grids are going into blackouts straining to provide power to industrial customers, let alone people without access to electricity.  When oil prices rise, try as they might by cutting other services and going into debt, developing country governments will not be able to subsidize fuels indefinitely.  There is no imminent or clear path, under current patterns of fossil fuel and power sector development, for those living in energy poverty to smoothly emerge from this.

If the Copenhagen summit prioritized access to electricity and efficient, low-carbon cooking and heating to the 2-3 billion people it is currently ignoring, it would be a very different summit.  Both developed and developing countries would be united in confronting the dual moral imperatives of addressing climate and development, rather than appearing to pit one against the other.

And the reality is that providing modern energy to these 2-3 billion people could be done with clean energy about as quickly as could be done with dirty energy - over the next 20 years - for about the same price or perhaps a minor subsidy from developed countries.  Solar lighting and similar renewables are now basically at price parity with kerosene and diesel generators, and the variety of price-competitive renewables, such as small wind turbines, will only increase in coming years.  The businesses that Next Billion covers regularly are demonstrating that these technologies can be commercially deployed.  With greater investment and prioritization by the global community, they could start replicating, franchising and scaling dramatically. 

This would not only be a development success, but a climate success, because three billion people cooking and heating with fuelwood and biomass is a significant contributor to climate change.  There could be a billion households that don't need to transition off of fossil fuels because their first electricity comes from solar.

Addressing the pockets - gaping holes really - of the deepest energy poverty would not only shave down the projected energy demand from fossil fuels. It would make negotiating between the wealthiest 1 billion and the 3-4 middle billion a more surmountable task.  Not easy - but much more straightforward,  dealing with a set of maybe fifteen major industrial economies that need to be brought into parity on carbon in the coming decades.  In doing so they will create the utility-scale clean energy technology that can be deployed globally.

One of the key insights behind market-oriented development at the base of the pyramid is recognizing that there is a not a "First World" with one set of economic rules and a "Third World" with a different set.  An extrapolation of this is seeing the world in terms of economic gradations rather than borders - there are "Third World" economic conditions in the poorest parts of the U.S. and "First World" conditions in Rio, Mumbai, and Shanghai.  Seeing the gradation of needs that exist between the wealthy, the emerging middle classes, and the global poor in these climate negotiations would help move them beyond the impasse they have currently reached.

At the recent 2009 Net Impact Conference, I overheard a number of students talking about participating in TheNext:2010 Case Writing Competition. 

"Are you going to enter the competition?" said one student.

"Yeah, I think it'll be a great opportunity to get more involved in this field," replied the other.

Indeed, this case writing competition is an excellent way to contribute to the emerging field of business for social impact and interact with leading figures in the space.  But to enter, you must complete an Intention to Compete Form by January 15, 2010. 

We have an all-star lineup of judges for the competition. Bob Kennedy (Executive Director, WDI), Brian Trelstad (Chief Investment Officer, Acumen Fund) and Virginia Barreiro (New Ventures Global Director, WRI) have each agreed to be a judge for the competition. In addition, we have recently added base of the pyramid guru Ted London (Senior Research Fellow and Director, Base of the Pyramid Initiative, University of Michigan) and Ravi Anupindi (Professor of Operations and Management Science, University of Michigan).

To make the competition meaningful and relevant to the field, the case competition will center on key questions that the three sponsoring organizations are currently wrestling with:

• Where can markets work best to address issues of poverty?
• What business models and business innovations are effective in developing scalable businesses serving low-income markets in the developing world?
• What are the consumer behaviors - in terms of spending and decision-making - that define market opportunities?
• How can market-based approaches to poverty alleviation achieve their goals while also protecting natural resources and preventing environmental degradation?
• How can the public and/or private sector best support the development of businesses serving the poor?

The hope is that these cases will be used to better inform their organizations, help academics teach this material to future leaders, and ultimately, make a tremendous social impact on the ground.  

And an added reason to participate in this competition? Prize money!  Prizes will be awarded as follows:

• First: $1000
• Second: $500
• Third: $250
• Fourth and Fifth: $100

Finally, winners will be interviewed and profiled on NextBillion.net and will receive an autographed copy of Jacqueline Novogratz's new book, The Blue Sweater. 

Cases are due April 30^th, 2010.  For more information on the competition, please click here or email me.

New Ventures (NV), an initiative housed at the World Resources Institute, is one of NextBillion.net's sponsors. Established in 1999, it is one of the pioneering organizations supporting entrepreneurship as an engine for inclusive growth and sustainable development in emerging markets. NV is now approaching a milestone in its history with its 10th anniversary fast approaching and a new strategic plan that will be executed jointly by WRI and the a network of New Ventures Local Centers located in six of the world's most vibrant emerging economies.  

The past decade has seen a lot of activity in NV with almost 250 supported enterprises worldwide; it's also seen a remarkable evolution of the sector where it operates with increased recognition of the role of entrepreneurship and SMEs in addressing the challenges of poverty and environmental degradation. In this context, New Ventures is entering a new phase and making important adjustments to its operating structure aiming to better serve its mission. Part of this is the redesign and relaunch of our communications strategy; the attached request for proposal (below) aims to identify capable vendors that work with us in the redesign of our visual identity and web properties.

We look forward to hearing from dynamic and capable service providers in the US and abroad. The deadline for submission of proposals is January 22, 2010. You can download the RFP clicking on the link below and also contact me directly for any further inquiries.

Request_for_Proposals_-_New_Ventures_WRI.pdf

Well, are you?  If you are, then be sure to apply to this year's Unreasonable Institute.  The Institute is an social enterprise incubator / fellowship / peer-selected investment fund all rolled into one somewhat messy, completely brilliant ball.

OK, in truth, it's not enough simply to be unreasonable.  You must also be starting or running a social venture, and be wholly committed to it.  Not only that, you must be willing to work with a cohort of like-minded social entrepreneurs to create an environment in which a rising tide lifts all boats - this is not just about you.  To understand the full eligibility requirements for the Unreasonable Institute, check them out here.

So, what is this all about?  Simply put, the Unreasonable Institute brings 25 high-potential, high-impact entrepreneurs for training, mentoring and cohort-building every summer.  This is the incubator aspect.  So what - just another incubator, right?

Wrong.  The Unreasonable Institute has recruited a stable of top mentors - including Paul Polak (IDE), Paul Hudnut (The BOPreneur), Dennis Whittle (Global Giving), Lindsay Clinton (Intellecap) and Bob Patillo (Gray Ghost Capital) to name a few. 

Beyond mentoring, the Institute builds a true cohort of enterprises during the 10-week program.  And it's not just a cohort - it's a judge and jury.  At the end of the Institute, the 25 entrepreneurs will vote on the best business plans - Apprentice-style - and the winner will take home $100K to help run the venture.  2nd place wins $50K.  The Unreasonable Village Fund press release has full details (PDF).

For details on the program, I strongly recommend Steve Hamm's post over at BusinessWeek, which gives a better run down than I'll be able to.

Most importantly, apply!  Applications are due December 15 and the process is neither onerous nor particularly long.  Worth a shot, as they say...

Editor's Note: This post first appeared on the Plug-In Blog hosted by E+Co.

MIT Press publishes innovations each quarter. Its fall 2009 issue, “Energy for Change” is well worth reading. It is a study in well established and newer thinking regarding energy issues.  Some of it is old news not listened to enough (“The California Effect” by Art Rosenfeld), and some of it is newer and better and gets more attention (Matthew Bunn et al in “A Future for Nuclear Power”). But for me the most important and telling article is Vinod Khosla’s “Whose Rules?” article.

This article is extraordinarily well grounded, especially as regards to establishing the carbon intensity of an economy as a measure of progress,  the four macro-criteria for negotiations success* and its powerful statement regarding the need for reducing the cost of capital to differentiate low from high carbon development.

My colleagues and I have spent the last two decades investing in more than two hundred developing country clean energy enterprises and are constantly aware of the disadvantage clean energy faces vis-à-vis the cost of capital.  It is significant that these two hundred enterprises – representing a quarter billion dollars of mobilized capital — produce as a portfolio (after losses and after all costs) the very 3% IRR the author cites as the lower boundary that funds such as World Bank IDA should underwrite.

This return is feasible, predictable and practical via investments in local clean energy enterprises. What this means is this: if the world’s public and private sector leaders were willing to underwrite such investments at 3% we believe an enterprise-centered approach to clean energy development would erase energy poverty for the 1.5 to 2.5 billion people who suffer from it.

This is an outcome desired by many.  For these last few decades hundreds of entrepreneurs have imagined and then created a world where clean energy for the poor can be delivered at an all-in return of positive 3%.  But they have struggled against the voices who proclaim “that’s not commercial”.

What a pleasure to hear voices as influential as Mr. Khosla and innovations zero in on the cost of capital as the critical lever.  I particularly love this quote from Khosla:

I believe that access to cheap capital (and thus lower financing costs) is vital; in fact the cost of capital may be the most critical tool in developing a lower carbon GDP economy.

*NOTE on 4 criteria: International agreements must

1. meet CO2 targets in ways acceptable to different participants;
2. be morally acceptable rather than forced and accepted under duress;
3. be politically acceptable inside participating countries; and
4. adjust to changing circumstances.

I envision these criteria as a triangle composed of the first three criteria, on which is balanced a board named “international CO2 agreement” along which a weight of change moves.  If any side of the triangle – the balance of power among the participants, the underlying societal values or domestic politics – is too short then reaching agreement is unlikely. And the weight that slides along this board – changing reality as CO2 is understood and its consequences realized – must be accommodated.

Those who have been involved with the Base of the Pyramid for some time will know that it is often striking (and frustrating) how often among all the information about BoP markets, there seem to be many anecdotes about the promise they hold, but little substance about how exactly to achieve it.

Trying to figure out exactly “what works” is, in fact, fiendishly hard to do. This lack of knowledge about what works and what does not is partly due to the fact that the BoP concept is still in its infancy. We at NextBillion try to spread the word about such solutions from the likes of Al Hammond (see his last ‘notes from the field’: 3, 4, and 5) and Phil LaRocco (see his opinions about platforms: 1 and 2) as well as act as a discussion forum and networking space for individuals interested in the BoP. Yet, the amount of experts willing and with enough time to share their experiences in the field is sorely lacking.

Recently a new website has appeared trying to cover that gap in knowledge. MajorityMarkets.org is an initiative led by the Opportunities for the Majority Office (OMJ) at the Inter-American Development Bank (IADB) focused in Latin America and the Caribbean and with the objective of stimulating the joint development of successful business plans for low-income markets.

The OMJ is the first (and so far only) office in any Multinational Development Bank specifically promoting and financing private sector business models targeted to low-income communities. Since its inception between 2006 and 2007, it has had time to accumulate experiences and learnings directly from its many investments in the field. MajorityMarkets.org also includes an impressive array of partners who will also contribute their own nuggets of wisdom to the debate. This is expected to result in a virtual dialogue between partners (and open to all visitors) to further refine possible business models worth exploring and investing in.

Regular visitors to their site should expect to find articles about business models and project stories that OMJ staff or any of their partners have seen work first-handedly as well as an ongoing debate among the partners about their possible replicability and scalability.

Moreover, its writers are individuals with plenty of field experience. In this line, Luiz Ros, current manager of the OMJ office is an old friend from NextBillion.net. While Luiz was Global Manager for Markets and Sustainable Enterprise at the World Resources Institute (WRI), he supported and encouraged NextBillion as it took its first baby-steps in the Internet world. In a nutshell, and what makes MajorityMarkets.org pretty unique, is that it is designed with the ultimate objective of finding and supporting economically and socially profitable business opportunities. 

This is just a brief overview of what they have to offer. Considering that the webpage is in its very initial stages I would encourage our readers to make it a visit and return frequently. I have big expectations for this website.

If you'd been to the Chowpatty beach in Mumbai on November 19, you would have found a group of people squatting together  with a couple of portable toilets in the vicinity. If you didn't check the papers in the morning, you would probable have thought it was part of a ritual of some bizarre cult. Instead, what these people were doing was showing support for the 2.5 billion people all over the world that lack access to basic sanitary facilities. The folks at Chowpatty beach were not alone. People all over the world were celebrating the "World Toilet Day" by taking part in "The Big Squat".

"If there are five people in each family, then we require 500 million household toilets. Then, we require another 500 million away-from-home toilets - in the workplace, in schools, in religious places, in the marketplace, in transport centers. So in this market, we need 1 billion toilets." says Jack Sim, founder of World Toilet Organization (WTO) (which conceptualized the World Toilet Day) in a interview with Beyond Profit.

The oft-avoided topic is becoming a major cause of worry for developing countries. According to a paper written by Rowshan Nantaz (Associate Professor, Department of Civil Engg, BUET), Dhaka City Corporation runs only 69 public toilets for a city whose population is beyond 10 million. And this isn't half as bad as the condition in Nigeria (est population as of 2008:151.3 million), where reports suggest that there are less than 500 public toilets.

In a recent article by Reuters, Sim was quoted saying "You see it long enough, and there is a basic acceptance that dirt is normal. But being repulsed by dirt, its smell and sight is a natural defence against disease". He estimates that the sanitation market is in excess of 1 trillion USD (which, for sake of comparison,  happens to equal India's GDP). Still, it's interesting to note there have been times in the past where investors have hesitated to invest in this sector,which happened in the case of Saraplast, nowadays one of the fastest growing portable toilets companies in India today. Despite having made record profits for the last three years they had a tough time attracting investors, until Aavishkar finally saw sense in the business and bought a 21% stake for an undisclosed amount this last August. Saraplast will be tying up with the New Delhi municipality for the Commonwealth Games in Delhi next year.

Ecotact (an Acumen Fund investee) is another interesting organization working in the sanitation industry that has received lots of publicity lately. It's Ikotoilet brand works on the build-operate-transfer principle of public-private partnership and plans to open another 200 facilities in Kenya in the near future. An interesting variation to the standard pay-per-use toilet model here is that it complements the toilet facility with additional service such as shoe shining, soft drinks and newspapers, which bring in additional revenue.

The Pee Poo bag, made by a Swedish architect provides an effective solution to the problem for its low cost, biodegradable and since its lined with urea, it sanitizes the feces and doubles up as fertilizer when buried. However, such solutions can at best be a short term measure to a problem which is closely related to the water and sewage industry. In fact, sanitation sufres in many rural areas due to the poor state of the water works and the high costs involved in initial investments. Maintenance costs also become a considerable issue once the public toilets are setup. Issues such as keeping the toilet dry, ensuring there is adequate water supply and flushing function is working become issues of prime importance.

Despite of these challenges, sanitation concerns are huge and growing, which presents an undeniably attractive market opportunity for innovative enterprises willing to tackle it.