CRITICAL SUCCESS FACTORS
Strong market understanding:
Appreciating the way in which the
business system operates enabled the
program to clearly chart the
constraints and the opportunities. This
ensured minimal wastage of time and
resources and contributed to project
credibility amongst stakeholders.
Being able to understand market
dynamics, such as the relationships
between farmers, cooperatives,
providers, or the accepted precepts
amongst institutions, is essential to
diagnosing real issues affecting the
market. This demanded extensive
local knowledge within the program
team and local facilitators.
Define an exit strategy up-front:
The facilitator‘s role is temporary and
the market must be sustainable when
facilitation activities end. Certain
facilitation activities need to continue
on a commercial basis - KDSCP
prepared for this by encouraging
providers (local facilitators) to develop
and offer demand led commercial
services.
Implement a full market scan:
Scanning of the entire market is
required in order to adopt a systemic
approach to program design. This
involves looking at the broader market
picture, identifying market players and
their functions and exploring the
influences - while also shaping a
future vision of the desired market
change. The sources of understanding
can be varied and not just focused on
formal research and studies. A scan
could be done before a program is
designed or implemented or can be
undertaken during implementation.
Disseminate market information to
potential service providers:
Sometimes information is all that is
needed to stimulate action by market
players. Useful forums for passing
along information are business
opportunity seminars and exposure
visits. These can also serve for
different market players to get to know
one another and initiate business
relationships for mutual benefit.
Plan for an impact assessment: This
is an in-depth understanding of impact
on farmers and the wider environment.
Time scales present a major
challenge. Many worthwhile changes
take a long time and effects may even
appear negative in the short term.
Explore the use of proxies-indicators–
these are easier to measure than final
impact, but that are linked to final
impact - such as farmers' own
perceptions of the services they
receive as measured by their
satisfaction or willingness to purchase
them or indicators of change in the
market that relate to the specific
issues the program is trying to
address.
Encourage innovative promotional,
packaging, and payment
mechanisms: Providers can package
services in small pieces or ―sachets‖,
offer introductory services with
immediate value-added for a small fee,
offer gradual payment mechanisms
such as installment payments, offer
financing to allow the poor to pay for
services, collect payments ―on
commission‖ if services help the
business make a profit and help small
enterprises purchase as a group and
receive a discount.
Share financial risk appropriately:
Share financial risk only when the
market development effects would
outweigh the market distortion effects.
Facilitators should analyze the potential
impact of risk sharing on the market. Will
risk sharing distort the BDS market,
limiting the entry of potential providers,
or expand the market, facilitating the
entry of other providers in the market? In
the following situations, sharing financial
risks is likely to be both essential and
beneficial: when no or very few existing
providers are in the market, when
developing new services, in very weak
markets and in markets with subsidized
providers.
Challenge free service provision: To
develop a sustainable commercial
market for BDS alongside subsidized
BDS - commercial services must offer
something different, better, or beyond
what subsidized services offer; and small
enterprises must be aware of what these
added benefits from commercial services
are. Providers can develop unique
selling features of a commercial service
by understanding the clients‘ needs and
the gaps in the subsidized services.
Facilitators can assist providers with
customizing services, enable BDS
providers to address small enterprise
problems that are not addressed by
existing subsidized services, and teach
commercial providers how to promote
their services.
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