While it is obvious that access to services may be reduced because of the cost of the service, there may also be a range of other constraints relating to payment that are overlooked, or are confused with affordability. The access of poor households to services is frequently affected by the capacity each has to make payments in the form, at the time and at the place required by the service provider. Continued access can be threatened if there is no flexibility for poor households to take on an appropriate and feasible payment scheme.
This flexibility may be necessary to pay tariffs and consideration might be given to methods of:
• delaying/spreading payments during difficult times (e.g., taking account of the seasonality of incomes);
• adjusting monthly/quarterly payments to shorter timeframes, which are more applicable to the way the poor manage their money (e.g., weekly payments);
• ensuring greater predictability of costs (e.g., in some cases, pre-payment methods are requested by the poor (in others they have been rejected), low-cost communal meters); and
• reducing the constraints and costs of making payments (e.g., by introducing collectors, neighbourhood or area payment points, or community collectors).
Where connection costs are passed on to users, it may be necessary to improve the capacity of the poor to pay by arranging financing options. This might include, for instance, mechanisms for:
• delaying/spreading payments by paying in instalments at affordable rates and agreed intervals (e.g., 24 monthly payments to spread the capital cost of connections);
• establishing the possibility for householders to offset some costs by providing their own labour at the household or lane level (e.g., digging trenches for pipe work to be laid); and
• establishing or linking into existing micro-credit initiatives (e.g., working with poor householders to save and ultimately to obtain credit to fund connections).
As a part of the initial and detailed poverty assessments and willingness-to-pay studies, municipalities should explore the factors affecting payment and, where possible, design mechanisms to address constraints. Analysis should identify the reasons for low-cost recovery and the constraints affecting service provision and access. It is particularly important to identify those issues that characterise the way that poor households utilise a service - especially where solutions need to be adapted to respond to the circumstances in which the poor live. In the water and sanitation sector, the practice of communal or collective billing has developed as a response to the constraints and characteristics of consumption in poor areas. Yet, this needs to be signed in relation to the specific context. For instance:
• the practice of shared connections or neighbourhood resale in poor areas means that the consumption per meter may be very high. In such cases the application of a rising block tariff developed for individual use (and discussed later in this chapter) is inappropriate, penalising poor users through higher tariffs. In some areas of Cartagena, responding to shared connections and the different consumptive pattern of poor communities, the billing system is communal and the responsibility of a community leader (see Box 7.7).
• For some poor individual users consumption per meter may be very low, and call into question the need for the meters and the corresponding high connection costs.
• In complicated and unplanned settlements, the practice of block billing may be introduced, often by placing an intermediary in charge of household-level collection. This approach has been instigated successfully in limited areas of Buenos Aires. Such initiatives are useful for poor householders (as well as the private operators), who might otherwise have to pay for transport to a payment centre.