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MIT Grads Sell Sanitation Franchises In Kenya Slums

MIT Grads Sell Sanitation Franchises In Kenya Slums

A group of U.S. college graduates is tapping into Africa’s huge demand for improved sanitation with toilets that can be set up as small businesses, HowWeMadeItInAfrica reports.

Millions of slum dwellers in Kenya have limited access to proper hygienic sanitation, the report said. Sanergy, a startup founded in 2010 by a team of MIT graduates, is franchising sanitation facilities called Fresh Life to local entrepreneurs in Nairobi’s informal settlements.

The toilets are sold to people in the Kenyan communities who run them as small businesses, the report said. So far, Sanergy has sold 275 toilets to 140 entrepreneurs. Sanergy provides daily waste collection services, marketing and branding support, as well as training for the entrepreneurs.

The business was inspired by the team’s interest in finding pragmatic solutions to social challenges, Sanergy co-founders David Auerbach told HowWeMadeItInAfrica.

Before Sanergy, Auerbach ran partnerships, policy and outreach at Endeavor, a global nonprofit that claims to have pioneered the concept of high-impact entrepreneurship in emerging and growth markets. Auerbach also served as a deputy chairman for poverty alleviation at the Clinton Global Initiative in 2006.

“Sanitation, renewable energy and fertiliser were challenges out there that were really interesting to my team and myself,” he said. “We came here and went to informal settlements and saw close-up the challenges people faced.”

The social enterprise comprises 107 people working in three slums in Nairobi, with plans to expand into a fourth.

Fresh Life toilets sell for $590 each. The cost covers business support, marketing, branding, training and daily waste collection services for the first year. After that, franchisees pay a $106 annual fee.

Sanergy is partnering with micro-lender Kiva to help entrepreneurs get loans to buy the Fresh Life toilets.

“It is a very good investment. With an average of 50 users per day charging (about six cents) per use, the entrepreneur is making somewhere around $2.6 in profit per day. Over the course of a year that adds up to about $944 in profit so they are able to repay within about nine months,” Auerbach said. “On average, each of our entrepreneurs is purchasing a second toilet. That means it is a good investment.”

Converting human waste into fertilizer will be the “driver of growth” for Sanergy, Auerbach said. Currently, the business collects about 25 tons of waste per week.

“There is a whole variety of what you can turn it into, including fertiliser, renewable energy… plastics (and) animal feed. So there is a huge opportunity. We go to each and every toilet (daily) and collect the waste in a professional and hygienic manner and take it to a centralized facility where we are converting mostly into organic fertilizer but, also at a pilot level, renewable energy. The results have been extremely positive.”

In three years, Sanergy plans to have more than 1,000 Fresh Life toilets in Nairobi.

“Our entrepreneurs are the key to the model,” Auerbach said. “As our entrepreneurs become successful, other people will want to buy the Fresh Life toilet. This makes our model inherently replicable so that we can take it to other peri-urban areas within Kenya as well as other cities around East Africa: KampalaKigali, places like that.”

Working in informal settlements has been difficult, Auerbach said, mostly because the communities are very built up.

“One good problem we have is we are collecting so much waste now, we are running out of space and so we need to move to bigger space,” he said. “The uncertainty around land in informal settlements is always a challenge. We are building our toilets on land and our entrepreneurs need to have access to that land to buy a toilet.”

Auerbach said he relishes the challenges in running the business. “I love this work. Our whole team is motivated by this powerful social mission and the opportunity we have to fix a huge problem around the world. That really excites me every day. I have been on jobs where you wake up every day and you are disappointed to go to work.”

His advice to other entrepreneurs in Africa: Put your “ears on the ground” and build strong teams.

“You have to be prepared to fail and when you do, be able to pick yourself up really quickly because you are going to be wrong more times than you are right,” he said. “You have to learn from that and continue to grow.”