Market Systems Development (MSD) is an approach to poverty reduction that aims to create long-lasting and large-scale change by stimulating more inclusive growth. To achieve a systemic change vision, market systems programmes often partner with the private sector to introduce new or improved business practices, products and services.
Market systems development aims to catalyse private sector investments into new or improved products, services and practices. Too often, however, interventions fail to scale or be sustained because they do not generate profitable returns for market actors. Programmes need to get better at unpacking business models and looking more closely at core drivers of company decision-making that shape whether innovations are likely to become embedded in the market system. This paper includes detailed case studies from Afghanistan, Zambia, Kosovo and Nigeria which are used to draw practical lessons on how market systems programmes can support business models that pass the twin ‘tests’ of commercial viability and development impact.
Produced by the Lab, this paper contributes to addressing the gap by examining business models being supported by market systems programmes. It sets out to better understand what business models look like in reality and the practical challenges facing project implementers and their partners. Above all, it asks the question: what can MSD practitioners learn to support business models that bring both commercial viability and development impact?