Targeted Subsidies in a Sanitation Marketing Context Add project name Add CSO logo or change cover slide Session 3c: Financing approaches to reach the poor Alicia May | July 14

Targeted Subsidies Play a Key Role Sanitation Marketing Scale Up (SMSU) 22% Purchasers are IDPoor Current SMSU 2 program explores how to capture the majority and laggards What models and tools can be used for deeper penetration into the poorest segments?

What is pilot operational model? SanMark Model Designing to context and building markets by facilitating demand and supply Independent Sales Agents 1 Rural Household 2 3 ( MFI Evaluation ) Independent Suppliers 4 5 Rural Household

Who receives the targeted subsidy? SanMark Model Designing to context and building markets by facilitating demand and supply Independent Sales Agents 1 Rural Household 2 3 ( MFI Evaluation ) Independent Suppliers 4 5 Rural Household

How are households targeted? Pilot Area Villages Pilot Details: 166 villages Pilot ongoing Randomized control trial conducted by Causal Design Control Villages Treatment Villages ID Poor Subsidy Cash and Loans Sales Cash and Loans Sales ID Poor Subsidy

What works and what’s challenging? How effective are these tools in reaching the poor? Preliminary results: Effectively targeting the poor Treatment Village: 51% treatment sales are poor How are targeted subsidies impacting non-poor sales? Statistically insignificant effect on non-poor sales when subsides are offered in their village Exacting sales technique when subsides offered; continue to monitor

What works and what’s challenging? How attractive are loans to rural Cambodian families? Preliminary data: Smaller than anticipated loan utilization 30% of total sales are loans 84% of loans being used by the non-poor Will continue to monitor as pilot progresses Loans alone are not the magic bullet, subsidies needed too Maintaining close relationship with MFI partner is key