Going with the social franchising flow

Photo credit: Jay Bhagwan, WRC

Jay Bhagwan, chair of IWA’s Specialist Group on Non-sewered Sanitation, gives the background to and looks at the prospects for South Africa’s use of social franchising.

South African experiences of progressing social franchising as a way to support and sustain sanitation potentially offer lessons for countries across the continent and beyond. Jay Bhagwan, executive manager, water use and waste management, at the country’s Water Research Commission – and chair of the IWA’s Specialist Group on Non-sewered Sanitation – notes that South Africa has its own specific history and features. “It has a strong political will around making change – and the resources to back it,” he adds. But the wider relevance is there. “South Africa is a developing country. The institutional model to deal with a customer base that is poor does not exist – you see that right across Africa and Asia.”

Administrations and institutional models tend to favour better-off parts of urban areas, especially in countries with colonial pasts. Recognition of this has shaped the search for ways to address inadequate sanitation. “We had to offer an innovation – a disruption around how we could service a broader population into the future,” says Bhagwan. “We went into an area that resonated with the government’s ambitions; in South Africa, and in many parts of the developing world, job creation and employment is vital.”

He recalls being inspired by the Rubicon initiative in the United States, where local bakery microenterprises were used to get rehabilitated inmates back into work. Water and sanitation was getting government attention in South Africa, with a focus on building basic services. But, Bhagwan notes, “as government was dealing with closing the gap around water and sanitation, it wasn’t establishing its institutional presence around operation and maintenance”.

“We were saying that meaningful operation and maintenance was required in some form to ensure ongoing sustainability of the system,” he says.

The social franchising concept

Initial studies examined the relevance of social franchising. “It is all about supply chain and logistics,” says Bhagwan. “If we could bring that thinking into the water arena, we could disrupt the institutional environment that was keeping microenterprises out of public service delivery… The models told us this was quite achievable.”

The first demonstration project was based on the “low-hanging fruit” of the void in operation and maintenance in rural schools. “The state of sanitation in the schools was really bad, so we started with a few schools to demonstrate and develop the model around the whole franchising concept,” says Bhagwan.

This drew support from the education department. “After that demonstration, we went into a full-scale programme through which, at its peak, we were servicing nearly 1,500 schools over a period of three years. We extended this to households, servicing municipalities by emptying and cleaning close to 10,000 toilets,” he adds.

A clear lesson from the work is that there needs to be a longer political commitment to this approach. “This is a criticism we put to government, saying there should be longer-term arrangements that allow small businesses to be sustainable,” says Bhagwan.

A viable model

Otherwise, Bhagwan believes the social franchising model has been shown to work, especially in the way that enterprises responded by growing their teams.

“We showed that this model worked – the quality control, branding, and systems worked,” he says. “Trying to get it to the national scale continues to be a challenge. Existing processes are a hurdle to small local enterprises at the bottom of the pyramid, so we are finding ways to change legislation to give momentum to this model, creating a niche in an area where government is failing.”

Bhagwan says enough progress has been made for other countries to build on the South African experience. “What we have shown, and the knowledge we have generated through the process, allows many other countries – and their circumstances are much better – to leapfrog these solutions as a mainstream [option].”

He identifies key aspects of achieving success with social franchising. “The enabling policy is very important,” Bhagwan says, adding that this includes political will. “The second thing is the financial instruments around micro-lending and establishing small entrepreneurs, and then having an institutional and regulatory model that creates this network, so it can thrive and grow.”

Together, these offer an opportunity to overcome the failings of current institutional models in developing countries. “This is about meaningful job creation, about getting people into an economy, around creating employment and the core expertise that can fill the gaps in challenging and remote circumstances,” says Bhagwan. The task now, he adds, is to “create the stepping stones for decentralised management to become the norm, institutionally and technically”.

“There is a lot of excitement around this concept that needs to be grown into a movement.”