heterogeneity in impacts by subsidy eligibility status (Column 4 in Table 4), we see that, on average, the impact of the credit intervention on toilet uptake was most significant for households which were classified as ineligible for the government subsidy. By 2017, subsidy ineligible households residing in sites where micro-credit for sanitation was made available were 20 percentage points (pp) more likely to own a toilet compared to their counterparts in control areas. This is similar in magnitude to the impact on sanitation loan uptake that we observed in column 2 for this sub-category (22pp). In contrast, for the subsidy eligible group the significant impact on sanitation loan uptake of 18pp observed in column 2 does not translate into a similarly significant impact on toilet uptake. With a p-value equal to 0.126, the coefficient estimate of 8pp is nonetheless close to being significant at conventional statistical levels.

Following ACGMS 2019, in Table 5 we construct a loan-to-new toilet conversion rate, by regressing interviewer-observed toilet ownership on sanitation loan uptake, instrumenting the loan uptake indicator with the treatment assignment. Provided that the treatment improved toilet uptake only through sanitation loan uptake - which we believe to be credible in this context - this estimate essentially tells us the rate at which sanitation loans provided as part of the intervention translated into _new_ toilets constructed _because of the intervention_ . Interestingly, there is significant heterogeneity in the magnitude of the loan conversion rate by whether or not the household is officially eligible for a subsidy. For the subsidy ineligible group the estimated conversion rate is high at 86%, whereas for the subsidy eligible group it is estimated at only 45%.

It is essential to keep in mind that the loan-to-new toilet conversion rate indicates the extent to which the sanitation loans translated into _new_ toilets in the treatment communities. That is, toilets that would not have been constructed in the absence of those loans. To interpret this statistic, it is therefore helpful to consider trends in toilet uptake in control areas. Using toilet ownership status and date of toilet construction reported during endline survey in August-Sept 2017, in Figure 3 we plot toilet coverage over time in our study area from 2010 up until 2018. We do this by treatment status (red lines for control and blue lines for treatment villages) and by officially classified VG status (solid lines for VG households and dotted lines for non-VGs). We use household’s VG status here rather than SBM’s eligibility status because we are interested in the time trend by subsidy eligibility irrespective of whether or not the household was classified as having a toilet at SBM baseline (prior to SBM baseline subsidy eligibility depended on VG status and not on the household’s SBM baseline record on toilet ownership). The vertical red line depicts the launch of the micro-credit intervention at the beginning of 2015, which happened shortly after the start of SBM (October 2014). VG households without a toilet were in principle eligible to receive a sanitation subsidy, particularly under SBM.

Figure 3 clearly shows that sanitation coverage among our sample population had started increasing even before the introduction of the sanitation loan product. In 2010 virtually none of the MF clients owned a toilet, and by the time the intervention started in 2015, on average more than 20% did. Prior to the launch of the credit and SBM interventions, we do not observe any statistically significant differences in the level and the evolution of toilet coverage, neither between control and treatment GPs, nor between VG and non-VG households. This is confirmed through sample balance checks (available upon request). This pattern changes remarkably from around 2015 onwards, with two notable trends in particular: (i) In control sites - where SBM was active but where no micro-credit for sanitation was available - toilet construction among VG households accelerated. Toilet coverage among non-VG households, on the 14