Final Documentation

Comparison of 3 types of BDS providers in India, 2002, by Vikas Choudhary

    With a focus on delivery roles, efficiency, equity, and sustainability, this case study compares state, market, and third sector (NGO) BDS providers operating in the Rajasthan, India handicrafts sub-sector. A fourth organization, an NGO that had evolved into a for-profit company, was later incorporated into the study.

    Support services for home-based artisanal microenterprises, traditionally provided by state supported organizations, were most often subsidized and this helped preserve inefficient technologies, low productivity, and a lack of market orientation. However, the shrinking of India's agrarian economy and the corresponding increases in rural unemployment and migration to urban centers has led to the establishment of specialized institutions to provide assistance such as marketing, skills training, technology dissemination, credit, product and design development, etc. to SEs.

    The consultant selected and studied three organizations representing state, for-profit, and NGO providers to understand the competitive and comparative advantages of the different types of institutions delivering services to rural microenterprises. He then conducted document reviews, focus group discussions and interviews with microenterprises and providers, and in-depth interviews with stakeholders such as design and technical institutes and local functionaries. The organizations were operating in the same environment and were aware of each other's functions and operations and this provided a unique opportunity to assess their perceptions of one another.

    Though the organizations worked in the same subsector and geographical area, and provided similar services, they varied greatly in terms of turnover, employee strength, management systems, scale, nature, and size. They all were unique in their own settings and their differences made comparisons and broad generalizations difficult. However, their approaches, philosophy, and functioning represent their institutional types and the study provides a broad understanding of the issues while focusing on the key principles which render an organization suitable or unsuitable to deliver BDS.

    Methods for info gathering
    SE Interviews, provider interviews, key informant interviews, in-depth interviews, secondary source research, focus group discussions

    Summary of results
    The study found that no one institutional type was best suited to deliver BDS and that an organization's approach and commercial orientation that makes it a more (or less) effective provider. Though equity and efficiency may be thought of as mutually exclusive, the nature of BDS for poor SEs mandates efficiency in operations and the principle of equal access to services by all. The NGO turned private sector provider was seen to be "an organization with the motive of an NGO and the performance of the private sector." A commercial focus on operations and a social objective with respect to clients may be what is required for effective, equitable, and sustainable BDS delivery and the study concludes that a blend of commercial and socially responsible orientations may be difficult, but is not impossible, to achieve.