In Mberengwa and Gutu districts SNV moulded the WASH supply chain by using its agriculture value chain model. The aim was to make construction materials for WASH facilities accessible to rural communities.
Implemented in partnership with Action Contre la Faim (Action against Hunger), the project strengthened supply chains and distribution networks, making WASH products available at local level and for a reasonable price. This resulted in credit facilities, better business relationships, a mindset change towards self-supply of WASH services and improved cement stock levels.
The intervention consisted of brokering for WASH supply chain through sanitation inputs, capacity building and sustainability mechanisms. Key stakeholders were brought in through an EU funded WASH program that was being implemented by Action Contre la Faim. The main components of the intervention were:
- WASH supply chain analysis: this included identification of key supply chain actors, products on the market, price trends, product availability/accessibility, major bottlenecks and business opportunities.
- Designing a WASH supply chain model: based on SNV Agriculture Agro-dealer Support Model experiences, a supply chain model called ‘consignment stock model’ was created. It identified business risks and capacity development needs, designed business frameworks and constructed the necessary capacity development strategies. The model was based on a voucher system which provided incentives for a ready market for the private sector. SNV provided capacity building support to dealers and wholesalers to minimise business risks before WASH products were stocked for sale.
- Establishing business frameworks: all stakeholders entered into a MoU which provided security, commitment and a business framework. These were steps towards risk management and assurance to the private sector. Agreements were signed between wholesalers and dealers, development partners and government agencies and between financiers and wholesalers.
- Capacity building: to ensure efficiency and effectiveness in the implementation of the model, capacities were built at two levels: 1. Dealer level (basic training on how to manage small business; mentorship to facilitate growth of rural dealers’ business; strengthening business relationship through dealer associations). 2. Wholesaler level (identification of business opportunities and brokering business relationships)
- Operationalisation of the model: wholesalers would receive an order to supply all the WASH inputs and would deliver them to local dealers in the remote rural areas. The targeted beneficiaries were given vouchers with which they would get their sanitation subsidies. The beneficiaries would go to their local dealers to redeem their vouchers. The local dealer would give the vouchers to the wholesaler who in turn redeemed them to Action Contre la Faim (ACF) for payment. SNV provided business skills development support to dealers through a local capacity builder (LCB) so that their business practices would build up the confidence of the wholesaler.
- Strong relationship between wholesalers and dealers: in both districts strong relations were established between wholesalers and dealers. Rural dealers now know where to buy WASH products and wholesalers are exploring ways of distributing other hardware materials through the same dealers. This will improve the business lines for the dealers and will increase their business volume. It will ultimately help reduce the transaction costs of wholesalers as the costs are now being spread over a wider range of products.
- Access to credit: with the growing business relationship, wholesalers agreed to establish credit facilities for dealers, which improved their capacity to trade.
- Increased cement sale for wholesalers and dealers: a total of 18,699 bags of cement were sold (8,337 in Gutu and 10,362 in Mberengwa) through vouchers and at least 4,487 bags were sold outside the voucher system (2,541 in Gutu and 1,946 in Mberengwa).
- Improved infrastructure: about 91% of those who bought cement from the dealers in Gutu used it for the construction of houses. This is not only good for the socio-economic status of the households but will also contribute to the construction of the latrines.
- Local entrepreneurship: the project gave the local dealers an opportunity to engage in the cement business for the first time and by the end of the first year all 13 dealers in Gutu were trading cement through a credit arrangement with the wholesaler whilst 50% of those in Mberengwa were selling cement through their own initiatives. This business opportunity made them keen to remain in the cement business and significantly contributed to poverty reduction.
- Improved income for dealers: average turnover for most dealers in the programme was $200 per month. Dealers got additional income from sales of cement and the amount ranged from $50 to $225 for Gutu dealers. Improvements in income for the small businesses significantly contributed to the improvement of their lives.