Why is the supply of BDS to small enterprises often so low?

The supply side in weak BDS markets must be considered carefully during the market assessment. Macro-economic constraints to BDS market development must be identified and removed before starting the market development. The "crowding out" of private suppliers by competition of subsidized monopoly providers must be revealed and stopped. The cost of creating permanent public benefits should be identified  and subsidized by public or donor funds. In markets, where the supply is low compared to the demand, facilitating and stimulation market development can be done by the activities suggested above. NGOs should ensure that their efforts do not distort, but facilitate, market development and should follow a pragmatic approach, depending on the level of development of BDS markets. The intervening organization can act as a facilitator, provider, or a combination of both at different stages in a program. In general, acting as a provider should be only an interim measure, and an exit strategy should be part of the upfront design.

Paper by Karsten Weitzenegger 2005
http://www.weitzenegger.de/new/supply.pdf

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