Services can fall under 3 categories:
Specialized fee-based services: offered to enterprises as distinct services for which they pay a fee or via
commission. This could include accountancy/audit, freight forwarding, advertising, legal advice, veterinary,
equipment repair, business consultancy, technical information, network brokering and product design
Embedded services: included within a commercial transaction for another product or service. This could include
design advice offered by a retailer to a producer, livestock advice offered by a trader to a farmer and producer,
advice offered through commodity supply chains and quality control provided by an exporter to a small processor
Informally provided services: information, knowledge and advice available to enterprises through other business
or social relationships. This could include information and advice on price, market and technology trends through
social networks or mediation through traditional cultural mechanisms.
FOR MORE INFORMATION VISIT:
FOR MORE INFORMATION VISIT:
Key Principles
Separate the roles of provider and facilitator: It is possible for the same organization to perform both the provider
role of offering services directly and the facilitator role of encouraging others to supply services. Combining roles can
lead to ineffective programs and inefficient use of funds. Ideally facilitators should disappear as the market develops
and providers or other permanent market actors take over its functions. This does not rule out a facilitator test
marketing a service or aiming to demonstrate the commercial viability of a service, but in this case, the facilitator
provides the service for a brief and limited period with a clear exit strategy.
Start with market assessment: To effectively intervene in a market, donors and practitioners must first understand
it. What services are being offered and by who? What types of services do farmers demand? What prices can they
pay? What are the market weaknesses and opportunities? To minimize the market distortion that any subsidy
creates, it is helpful to conduct market assessments and understand BDS markets before starting interventions.
Coordinate donor efforts: It is very difficult, and not at all effective, for one donor to pursue a market development
approach if others continue to subsidize transactions and offer publicly-funded services in the same market.
Providers will almost always choose to work with a donor who will subsidize transactions rather than one advocating
market development. Free services also dampen users willingness to pay. Even if all donors pursue a market
development approach, coordination is critical. In markets with relatively few providers, these suppliers can be
overloaded or lose their commercial focus if they receive significant financial resources from several donors.
Use subsidies primarily for pre- and post-service delivery activities: Subsidies that directly reduce the cost of
services are likely to distort markets more than subsidies for pre- or post-service delivery activities. Avoid or limit
subsidies for transactions to a short duration with specific objectives. Use them for pre-delivery activities — product
development, test marketing, capacity building, and awareness raising – or for post-delivery activities such as
gathering consumer feedback or for monitoring and evaluation.
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