Using market-led tools in the design of BDS interventions in Nepal

Jim Tomecko

This article draws the distinction between business development service providers that have until recently derived most of their income from delivering programmes for donors, and those that serve private
sector businesses directly. The former have tended to be responsive more to their donor clients than the businesses they are intended to develop. They also find it difficult to see how to increase their
fee income from businesses in the event of donor subsidy diminishing. On the other hand, smaller suppliers who are already in the BDS market, even in a small way, are quicker to recognize opportunities
that will potentially expand their markets. To be more market oriented, however, both sets of BDS suppliers need to use more modern market-assessment tools in the design of BDS products. This paper looks
at how some of these tools have been applied in one project in Nepal. The results of a broad national survey on the consumption of BDS in Nepal are presented and key lessons are drawn for project design.
A least-distortionary project 'offer' is presented which provides feasibility support for suppliers to commercialize their BDS products for a wide range of private sector firms. The emphasis is on pre-delivery
assistance such as: market niche identification, product development and product concept testing, tailor-made capacity building, awareness and demand creation with the target market and in some cases trial
marketing to test for feedback. Subsidies on the transactions between suppliers and their customers are not provided. A range of indicators are suggested to: track changes in the increasing market for BDS,
identify impact at the firm level, evaluate the viability of individual BDS products, and monitor the overall project efficiency.