Abstract
Utilities require a stable revenue stream to provide customers access to high quality energy, water, sanitation, and other essential services. Historically, utilities have used disconnections, or the threat of disconnection, to compel customers to pay their bills on time. However, the increasing recognition of the human rights to water and sanitation by many governments and the COVID-19 pandemic have led some water utilities to discontinue or curtail disconnections. Reducing arrears and encouraging on-time bill payment is essential to getting water utilities in the Global South on the path to financial sustainability. In partnership with the water utility serving Nairobi, Kenya, we test the impact of five simple, low-cost reminders on customer bill payment using a pre-registered, randomized controlled trial of 60,000 residential customers. We use four measures of payment behavior: making any payment, paying the full current month's bill, total arrears accumulated over the six months when messages were sent, and the fraction of the cumulative 6-month bill paid. While a potentially low cost means of compelling on time bill payment, we find that SMS-based bill payment reminders were not effective at improving bill payment.
Keywords
Water; Sanitation; Information provision; Field experiment; Bill payment; Africa
Highlights
- Customer arrears undermine the financial sustainability of utilities across the globe.
- SMS-based information treatments (reminders) were not effective at improving bill payment.
- Utilities' transition to electronic billing and payment must be paired with efforts to ensure customers receive their bills.
