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How A Toilet Franchise Business Is Cleaning Up Kenya’s Slums

When the government isn’t providing clean sanitation, Sanergy is showing that there’s an opportunity for local entrepreneurs to step in.

Sanergy is a social enterprise that’s building out a sanitation network in Nairobi, Kenya. It designs its own toilets, franchises them out to entrepreneurs (who charge people to use them), then converts the waste into fertilizer that it sells to farmers. Started by MIT graduates, Sanergy takes a business approach, based on the premise that people will pay to use toilets if you make them clean and sturdy enough.

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We first spoke to co-founder David Auerbach back in November 2011 as it was launching its first cubicle. Its since sold 734 toilets to 362 “Fresh Life operators” in two slums, Mukuru and Mathare. Auerbach says they’re now used 33,000 times a day and that, so far, Sanergy has collected more than 6,000 tons of waste.

“We’ve shown that people are willing to pay if their demands are met, which means clean toilets, close to where they are living, at an affordable price. The fact that the toilets are run by peers in their community gives them added credibility,” Auerbach says.

An estimated 2.5 billion people worldwide lack access to toilets and it’s questionable whether governments can build the sort of integrated public works that we enjoy here. At least, it’s questionable whether it’s possible in the immediate future. That’s led a growing number of startups to seek alternatives, from high-tech, solar-powered units that do their own composting to decidedly low-tech, toilet-in-a-bag approaches. Sanergy’s toilets–which are basic but now come with tile floors–cost about $500. It helps entrepreneurs pay for them through a partnership with Kiva, the online micro-lending platform, and promotes them on radio and on murals in the slums (tagline: “Live fresh!”). The entrepreneurs set their own end-prices–the standard rate is about five cents.

When Sanergy started out, it looked to put toilets in public places, but over time it realized there was a lack of sites to reach the scale it wanted to achieve. So, it’s now working with landlords and schools. Typically, landlords buy toilets for plots of 10 to 15 rooms, meaning each unit is used by 50 to 60 people. Auerbach says the entrepreneurs can cover the cost of the toilets in seven to nine months.

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The toilets come with “cartridges” that collect the waste, which are then swapped out as they become full. The waste is transported to centralized facilities, where Sanergy adds agricultural waste like sugar cane husks and rice husks, as well as microorganisms that break down the matter. The fertilizer is ready in about six months. You sometimes hear that farmers don’t want to deal with fertilizer derived from human excrement. But Auerbach says they’re convinced once Sanergy can show that the product comes pathogen-free and increases crop yields, often by as much as 30%.

As for Sanergy’s balance sheet, it hopes to break even by the end of 2017. It’s currently supported by social impact investors, USAID, the Gates Foundation, and several family foundations. Indeed, it’s a good example of a business that’s got off the ground through philanthropy, but, through its business model, should eventually be self-sustaining. Sanergy has a long way to go before it’s even meeting Nairobi’s needs–65% of the population lives without a toilet–but it’s definitely made a good start.

About the author

Ben Schiller is a New York staff writer for Fast Company. Previously, he edited a European management magazine and was a reporter in San Francisco, Prague, and Brussels.

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