What steps are needed to enable the domestic private sector to expand its role in the provision of safe water and improved sanitation to the poor in developing countries? Is an expanded role constrained because of limited market potential, are business models unable to support an expansion of supply, or do government policy and the broader climate for investment inhibit enterprises? Tapping the Markets: Opportunities for Domestic Investments in Water and Sanitation for the Poor presents the results of a detailed examination of market opportunities for the domestic private sector in the provision of piped water and on-site sanitation services in rural and semi-urban areas and of the commercial, policy, and investment climate factors that affect the response to these opportunities. It is based on case studies conducted in Bangladesh, Benin, Cambodia, Indonesia, Peru, and Tanzania. The results of focus group discussions with poor households, surveys of enterprises that directly serve poor households, and analysis of the supply chains that support them provide insights into the nature of demand for services, the prevailing business models of enterprises, and the impact of policy on decisions to invest or expand operations. The issues that prevent local enterprises from tapping the large market for providing poor and nonpoor households with piped water and on-site sanitation differ in important ways across the two sectors. The first part of the book analyzes the challenges that domestic providers of piped water face in Bangladesh, Benin, and Cambodia, countries with very different models of private provision. The second part analyzes the delivery of on-site sanitation services in Bangladesh, Indonesia, Peru, and Tanzania, countries where all providers face supply and demand challenges that are largely unaffected by government policy. Tapping the Markets will be of interest to governments, their multilateral and bilateral development partners, and local and international nongovernment agencies that focus on reducing the impact of lack of access to safe water and hygienic sanitation. The authors propose recommendations for harnessing the entrepreneurial capabilities of the domestic private sector and for addressing this continuing challenge.