Case Study: FAIDA SEP Tanzania BDS Support Project, 2002

    Contributing up to a third of Tanzania's GDP, micro and small enterprises also help alleviate poverty and create employment. However, the lack of data on performance and dynamics of the sector and limited information on associations and chambers has seriously constrained policy development.

    The main focus of the case study is on FAIDA SEP's efforts to build the capacity of BDS suppliers through the provision of technical assistance, training, and product development. Providers helped design the program activities which included:
    1. Participatory organizational assessments of BDS providers resulting in specific proposals and agreements on cost sharing.
    2. Market surveys turned up potential niche markets; stimulated creative thinking about new products; confirmed that repeat clients were willing to pay for services; and revealed the existence of embedded services through business to business relationships.
    3. Product development assistance helped providers develop innovative, cost-effective products, such as special packages for gender-sensitive training and for associations. Providers developed 'grass roots providers' who could supply basic, affordable services to SMEs in rural areas.
    4. Regular workshops shared experiences with Government, and other BDS support agencies and donors and educated them about the market development paradigm.

    Summary of results
    In general, the capacity building, product development, and creation of a network of grass roots BDS providers interventions were successful. The program also helped increase awareness at regional and national levels of the value of BDS and facilitated intensive discussions on the validity of the Market Development Paradigm for Tanzania. Given the current situation in Tanzania, with its emerging BDS sector and high level of market distortion, it is unlikely that a strict interpretation of the market development paradigm can immediately improve the availability of services for MSMEs because most clients do not want to pay for them. Repeat clients, diversification of prices and service types, and links to high demand services such as marketing support, input supplies, or technical assistance, appear to offer the best potential for sustainability.

    Associated Activities and Documents
    Market Assessment
    »SNV - FAIDA Tanzania 2002