reported by household heads during the household survey, and (ii) toilet ownership confirmed by the survey enumerator.<sup>41</sup> In addition, we construct a measure for whether the toilet is functional by combining responses and observations on toilet ownership with responses from the household head confirming that the toilet was not broken, under repair or upgrade, and did not have a full pit at the time of the survey. By estimating impacts on this indicator, we capture the impacts of the intervention on the construction of new functional toilets, and the repair of previously dysfunctional toilets (that became so either before or after the intervention roll-out). Comparing impacts for this variable with those on toilet ownership, provides an indication of the intervention’s impacts on sanitation repairs.

Table 5 shows the effects of the sanitation loan intervention on toilet ownership status and on the ownership of a functioning toilet. Columns 1 and 2 of the table indicate that the intervention led to a 9 percentage point increase in toilet ownership among study households. Reassuringly, the coefficient estimate is similar across both measures of toilet ownership. We also find similar, though slightly higher, impacts of the intervention on our measures of functioning toilet (Columns 3 and 4). A comparison of the coefficient estimates in Columns 3 and 4 with those in Columns 1 and 2 suggests that, in line with client responses on loan use, few of the sanitation loans were used to repair existing toilets. Reassuringly, all the estimates impacts are robust to adjustments for multiple hypothesis testing, as indicated by the step-down Romano-Wolf p-values, which are all below the 1 percent level of significance.<sup>42</sup> It is of interest to note that this increase in toilet ownership is on top of a significant toilet ownership increase in the control areas since the start of the intervention. When the experiment started in February 2015, 25 percent of client households in control areas owned a toilet. By August 2017, this proportion had increased to 45 percent, as indicated by the last row of Table 5. This almost doubling in toilet coverage among MF client households in control GPs suggests that other factors, notably the Government of India’s ambitious SBM(G) policy which started around the same time as the sanitation loan intervention studied here, might have successfully contributed to a boost in toilet construction.<sup>43</sup> We next check whether sanitation loans improved the quality of toilets owned by households. This could be either because better toilets were constructed or because of upgrade or repair, which as shown earlier was reported by at most 11% of clients who took a sanitation loan.

We analyse toilet quality through surveyor-recorded observations of the toilets’ characteristics along a number of dimensions, including the types of materials used to construct the underground chamber, ease of access, cross-ventilation, availability of a lockable door, availability of light among others. We combine the recorded observations into summary measures for underground and overground quality using polychoric principal components analysis. This procedure converts a set of observations of possibly

> 41This includes toilets that were under construction at the time of observation.

> 42All findings presented in this table are also robust to joint hypothesis testing with other outcomes studied in this paper. Table C.1 in Appendix C pools all regressions together and presents p-values adjusted for testing all 21 hypotheses jointly.

> 43And yet, this finding indicates that more than half of the MFI clients in control communities still had no toilet in August 2017. Hence, even though it seems likely that the launch of SBM(G) and/or other factors might have triggered a spurt in sanitation activity in the area, there is still scope for complementary interventions, such as the provision of sanitation loans, to make a difference. In Augsburg et al. [2019] we consider in more detail potential complementarities between the MFI intervention and the SBM subsidy scheme.

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