4. In which ways is the initiative creative and innovative?
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What makes the initiative innovative, among the national sanitation companies, is establishing the most reliable approximation possible about how much a low-income family can pay in a debit negotiation, with lower risk of recurring default. For this purpose, it´s used a system tool that estimates the user income, through the ratio between the family's electric power consumption, number of residents in a home and water consumption, and then, it measures the amount limit for water and sanitation bill and quantity of installments, within the payment capacity.
All tool parameters and criteria were established through the analysis of factors from studies about socio-economic scenario in the State of Bahia (IBGE 2010 Census and Family Budget Research - POF 2009), confronting with the bill balance diagnosis existing in Embasa's database, through statistical methods of information match and use of data mining software of geo-referenced data.
The company was also present in the communities, promoting the new negotiation method, through car with sound system, billboards, banners and folders, in addition to mobile units to carry out the field negotiations.
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5. Who implemented the initiative and what is the size of the population affected by this initiative?
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The initiative was implemented by Embasa itself, through business, operation units and support units.
Embasa is a mixed-economy company with authorized capital, private legal entity, with the State of Bahia government as the major shareholder. It provides treated water supply, sewage collection and treatment services, restating its commitment with the sustainable development, in accord with the State government's macro strategy, which is the universalization of the access to sanitation.
Embasa is one of the executors of State of Bahia's basic sanitation policy, in the water supply and sanitation, and acts on the government priorities, defined within “Programa Água para Todos - PAT” (Water for Everyone Program). It provides services in 366 cities, where it serves the actions settled in the Municipal Basic Sanitation Plan, contributing to the universalization of water supply and sanitation services in a sustainable way. 434 water supply systems are in operation, distributed in 366 of 417 state cities (87.77% of state cities), from which 133 are integrated systems (they serve various locations belonging to one or more cities) and 301 are local. Regarding the sanitation, there are 118 systems are in operation, with 110 local and 8 integrated ones, which serve 102 state cities.
The initiative's target audience are customers with up to two Brazilian minimum wages per capital, where, in the State of Bahia, it´s estimated that there are 1.889 million users in this situation. The program enabled, until December 2016, that 22.201 low-income customers could negotiate their debits, with an average 85% decrease to adapt it to their payment capacities, returning to the regular access to water supply and sanitation services.
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6. How was the strategy implemented and what resources were mobilized?
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In 2013, a study was carried out on the geographic and socioeconomic characteristics of the state of Bahia, where it was found that 61% of families receive up to two Brazilian minimum wages (IBGE).
In this scenario, a diagnosis of the families’ income and behavior was made in relation to the payment of the sanitation services bills, linking to the balance of bills receivable from Embasa due to problems causing default. Consequently, a thematic map of the census tracts1 of the IBGE was prepared, confronting the thematic map of the debit of the geo-referenced users of the Embasa services. From this statistical cross, it was confirmed that more than 90% of the users in debt with the Embasa were concentrated in areas of up to two minimum wages of per capita family income.
The central issue for the recovery of the lowest family income customers refers to the size of the debt that these users have acquired over time with the service provider, which in most cases are unpayable against their income condition.
In this sense, the methodology of this debt negotiation model considered the socioeconomic aspects of the families, such as income, standard of electric energy consumption, maximum percentage of commitment of the income with expenses of water and sewage treatment and its geographic aspect of the location of the debt.
The essential element in a negotiation proposal is to identify the user's income to establish the limits of the agreement. Due to the difficulty of proving income of the lowest class, the standard of energy consumption was used to estimate income. For this, it was used the Pesquisa de Orçamento Familiar – POF (Family Budget Research), (IBGE – 2008/2009). However, data from the POF only comprise the stratification of household income impairment, without demonstrating this relationship by residents of the household, which significantly affects the energy consumption of a household and the estimation of family income.
To overcome this obstacle, a field survey was carried out with a sample of 227 observations, whose statistical regression tests indicated, through the multiple R, that 98% of the variations in income are explained by changes in energy bills and in the number of residents, demonstrating how well the model fits the data.
With this information, it was possible to establish the necessary parameters to estimate the family income at the time of the negotiation through the energy bill and the number of residents in the household and then, a maximum percentage of commitment of the income was used for the calculations of the installment and of the bill. Then, the Padrão de Negociação Flexível de Débito result is the debt adaptation, as well as the maximum amount for the negotiation installment to the family budget, deploying a system tool.
For the operationalization, there was an adaptation in the commercial system, realized through the internal area of information technology, not being necessary the extra injection of financial resources. All the studies for scenario analysis were performed by internal work force, with information available in the market and field research, with not very significant costs. There were also actions of dissemination in the communities, with the possibility of effecting the negotiation in the client's house.
Through reports extracted by the commercial system, it is possible to follow the negotiations carried out, the number of families benefited and the total value recovered by the company with the reduction of the existing debt. The monitoring of this information is translated into important indicators for decision making, which allows monitoring the evolution of the results and the achievement of objectives.
¹ small, relatively permanent statistical subdivisions of a county.
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7. Who were the stakeholders involved in the design of the initiative and in its implementation?
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The initiative was developed and developed by the following players:
- Victor Mota Calmon de Siqueira – Billing Department Manager at Empresa Baiana de Águas e Saneamento S.A.- Embasa;
- Daniel Torres de Oliveira - Planning Division and Billing Control Manager at Empresa Baiana de Águas e Saneamento S.A- Embasa;
- Marcio Costa Lessa - Business Superintendent at Empresa Baiana de Águas e Saneamento S.A – Embasa;
The Initiative was supported by:
- Dilemar Oliveira Matos – Financial and Business Director at Empresa Baiana de Águas e Saneamento S.A – Embasa;
The initiative was approved by:
Executive Board at Empresa Baiana de Águas e Saneamento S.A – Embasa:
Board of Directors at Empresa Baiana de Águas e Saneamento S.A – Embasa;
Contributed to the initiative:
- Information Technology Superintendence at Empresa Baiana de Águas e Saneamento S.A – Embasa;
- Communication Unit at Empresa Baiana de Águas e Saneamento S.A – Embasa;
- Mariana Larissa Negreiros Cabral - Business Superintendence Advisor;
- Companhia de Eletricidade do Estado da Bahia – Coelba.
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8. What were the most successful outputs and why was the initiative effective?
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Since when Padrão de Negociação Flexível de Débito application started, the following results were observed:
- Experimental action in the neighborhood of Sussuarana in Salvador in the year 2013: 487 families, with a historical debt of BRL 2.6 million, joined the flexible negotiation. For the recovery of these families, benefits were granted, determined using the new tool, which reached an average of 90% discount of the outstanding debts to the company;
- Annual Credit Recovery Campaigns:
- Year 2014: 1,874 families, with a historical debt of BRL 7.9 million, joined the flexible negotiation. An average of 84% reduction of debits was verified;
- Year 2015: 1,779 families, with a historical debt of BRL 8.1 million, joined the flexible negotiation. An average of 82% reduction in flow was verified;
- Global result from February 2014 to December 2016: 22,201 families, with a historical debt of BRL 97.6 million, joined the flexible negotiation. An average of 85% of debit reduction was verified. These families became able to enjoy regular access to Embasa's water supply and sewage treatment services.
Regular families with Embasa services and complying with their obligations are also important for the company's own economic and financial balance, which effectively contributes to the improvement of the services offered, as they enable more investments needed to maintain and expand the system of water supply and sanitation.
By collaborating with the improvement of the quality of life of a poorer and more vulnerable part of the poorest population, seeking social inclusion and with a view to the universalization of important sanitation services with economic and environmental sustainability, the initiative is aligned with the following Sustainable Development Goals: “Ensure healthy lives and promote well-being for all at all ages”; " Ensure access to water and sanitation for all"; "Reduce inequality within countries"; and " Ensure sustainable consumption and production patterns”
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9. What were the main obstacles encountered and how were they overcome?
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Considering that income identification is an essential element to enable households to access sanitation services and to negotiate pending debts to establish the limits of the agreement, the first obstacle faced was the difficulty was getting the proof of income of the lowest class. In this sense, the standard of energy consumption was used to estimate income, using the Family Budget Research.
However, the data of the POF only comprise the stratification of family income impairment, without showing this relation by residents of the household, that is, the per capita consumption of energy. This situation was a second obstacle found, and therefore, it was necessary to resort to field research to measure, through a sampling, the commitment with energy per inhabitant. Thus, a field survey was carried out with a sample of 227 observations, whose statistical regression tests showed, through the multiple R, that 98% of the variations in income are explained by variations in energy bills and the number of inhabitants, or either, showing how well the model fits the data.
Another difficulty was the areas that had not yet been georeferenced by the company, which made it impossible to cross the IBGE census data. This problem was overcome with the inclusion of these registrations (registration number of the property at Embasa) in the analysis of the central negotiation committee (collegiate created for assessments of special situations), using photos of the properties, social conditions of the street, the neighborhood and the standard Consumption for inclusion of the family in the Padrão de Negociação Flexível de Débito.
Another obstacle found by the company was the difficult access in areas of high risk (violent areas), which in some cases was supplanting with social actions.
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