Dealing with human waste has become a health crisis in many poor communities, but residents of a Kenyan slum have found a solution that turns poop into profit.

Working directly with residents of Mukuru, one of Nairobi’s largest slums, an MIT spin-off company called Sanergy has developed a promising new method to improve sanitation. Instead of promoting sanitation through education, Sanergy has addressed the core reason why many residents must still defecate in pits or in the street: a lack of access to toilets.

But contrary to the idea behind last year’s Reinvent the Toilet Challenge by the Gates Foundation, Sanergy co-founder David Auerbach says that access to innovative toilets alone isn’t enough to spread sanitation practices.

“When it comes to sanitation, it’s no longer a question of, ‘Can you bring someone a good toilet?’” said Auerbach. “If that’s the answer we would have already solved it.

“You need to address the entire sanitation value chain to solve the challenge,” he continued.

Sanergy’s toilets are low-tech and low-cost, but they have a key feature: They come with removable waste cartridges. Local entrepreneurs buy and operate the toilets, charging users a small monthly membership fee. Sanergy then collects the waste and processes it into organic, sell-able fertilizer. Soon the company plans to process the waste into biogas, biochar and several types of plastic, as well.

Creating business relationships means that toilet operators earn steady income from their investments, and waste treatment pays for itself. It benefits people you would expect like the toilet users, who now have access to a clean and private space to go to the bathroom, and people you wouldn’t, like the farmers who pay less for the processed, organic fertilizer.

Around the world, a lack of sanitation puts 2.5 billion people at risk of diseases like dysentery, cholera, typhus fever, and typhoid. Every year 1.6 million children die from preventable, sanitation-related diseases. A lack of clean toilets and clean water is “a compound magnifier of poverty, ill-health, and mortality,” said U.N. General Assembly President John Ashe.

Sanergy grew out of a MIT class on building entrepreneurial ventures in developing countries. When students learned the depth of the global sanitation problem, they saw a business opportunity. Human waste, they believed, didn't have to be waste at all.

Sanergy’s answer is "no." Since opening its first toilet for business in 2011, the company has installed 330 toilets, collected 1,800 tons of waste, and created 350 jobs in Mukuru, an area with 40 percent unemployment.

Local toilet operator Agnes Kwamboka says the project changed her life. Before working with Sanergy, Kwamboka sold an illicit beer called chang’aa to support her family.

“People look at you and think you are a prostitute,” Kwamboka said about that time of her life. “When I used to sell chang’aa, many men used to enter my stall. They thought they could just use me like a broom. Policemen used to demand a bribe of 500 shillings each day.”

Now, as a Fresh Life Toilet operator, Kwamboka feels secure.

“The Fresh Life Toilet has given me peace of mind. My children used to steal, but now they don’t have to,” she said. “I keep all my profits, and I’m able to provide for my family and also pay off my debts.”

Sanergy aims to expand in Mukuru and start producing renewable energy as well from the collected human waste. The company’s founders hope to expand into other areas in Kenya, then Africa, and eventually into Asia, where sanitation needs are critical.

Right now, though, the company is focused on its work in Mukuru.

“We need to get it right in the community we’re serving first,” Auerback said.

The project has won widespread recognition. It took first in the 2011 MIT $100K Entrepreneurship Competition and has received awards from MassChallenge, MIT’s Legatum Center for Development and Entrepreneurship, and the Lemelson Foundation.

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What makes Sanergy’s project so strong? It is a great example of developing a sanitation solution that is scalable and sustainable.

Market-driven. Participants pay, but the benefits they gain far outweigh the cost. For example, people get to use safe, clean, and private bathrooms for a small monthly fee. The toilet operators must invest in their business, but they earn more than enough to pay back that investment and support their families.

Fits local needs. Sanergy focused on addressing major local issues, such as the lack of sanitation and unemployment, and tapped into the existing entrepreneurial spirit. And to make sure the project would be locally profitable, Sanergy tested toilet and waste-processing designs in Mukuru and another slum, Kibera, before scaling up the project.

Sanergy’s work connects participants and innovates new solutions as needed. Pay toilets already existed in Mukuru, but they were not designed so that the waste could be collected. Toilet owners had a hard time making a profit. In addition to creating a better toilet design, Sanergy also developed the waste-to-fertilizer factories – the major gap in the value chain from poopers to planters.

But the most exciting feature of Sanergy’s sanitation value chain is that it can be used anywhere. Sanergy’s success in Mukuru shows that sanitation can be solved around the globe.

• This article originally appeared at Global Envision, a blog published by Mercy Corps.