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For decades, business development services in agribusiness have followed a familiar script: free training delivered to whoever shows up, outputs counted in headcount, and donor funding keeping the whole system artificially alive. It looks like support. It functions like a substitute for a market.
When services cost nothing, they are valued as nothing. Providers have little incentive to deliver quality. Enterprises have little reason to engage seriously. And when the donor exits, the market that was supposed to exist simply does not.
AMEA’s 2023-25 BDS surveys confirmed this dysfunction across multiple country contexts. The question was not whether the market was broken. It was whether it could be fixed – and how.
AMEA’s Cost Share Pilot, funded by AGRA, set out to test a structural alternative. Rather than subsidising services entirely, the pilot asked enterprises to co-invest – at a minimum of 20% of service costs – and tied provider payments to verified outcomes.
In Phase 1, six of Uganda’s leading BDS providers delivered services to 24 agri-SMEs, with individual service packages valued at up to $2,500. The design drew on ISF Advisors research showing that even a 17% average cost share was sufficient to ensure enterprises had genuine skin in the game, and that this meaningfully improved outcomes.
The results were clear. 81% of participating enterprises had never accessed BDS before. 88% expressed willingness to pay for practical coaching. Satisfaction with the cost-share model reached 100%. And 56% reported greatly improved business performance.
Perhaps most revealing: 75% of agri-SMEs cited a lack of trusted providers as their primary barrier – not the cost of services. This challenges a persistent assumption in programme design, that price is the central obstacle to BDS uptake.
The pilot produced a detailed picture of what makes cost-share work in practice – and what undermines it.
For BDS providers, the key shifts are outcome-linked fees (subsidies released in two tranches, with 50% contingent on verified enterprise improvement), client selection rights, and a move from transactional delivery toward sustained client relationships.
For agri-SMEs, even a 10% cash or in-kind co-payment changes the dynamic. Enterprises attend. They engage. They apply what they learn. The top service needs identified through diagnostic assessments were business planning (94%), record-keeping (81%), and finance access (75%) – a reminder that practical, commercially-oriented support drives demand.
Phase 1 also highlighted that a single approach cannot serve all enterprises equally. A cooperative of 30 smallholder farmers and an established agri-processor with a decade of trading history face fundamentally different constraints. A uniform co-payment rate is both inequitable and ineffective.
The new LIA brief proposes a three-tier segmentation framework – Emerging, Growing, and Established – with co-payment rates ranging from 10-20% for early-stage cooperatives to 50-60% for commercial agribusinesses. Critically, 44% of pilot participants preferred in-kind co-payment arrangements, a flexibility the framework accommodates.
Four design principles round out the guidance: assess before allocating; prioritise relationship over transaction; treat bankability as a primary outcome; and build for hybrid delivery that works in low-connectivity environments.
This learning feeds directly into the AMEA Annual Learning Event 2026, taking place virtually on 23-24 June, 14:00-16:30 CEST.
Day 2, themed around Scaling BDS Best Practice, includes a dedicated session: “BDS Cost Share Facilities: Will SMEs Pay for BDS?” – a direct extension of this pilot’s findings into broader debate.
Other Day 2 sessions cover transforming BDS markets through quality assurance, measuring BDS cost-effectiveness, the 10,000 FPO Initiative from India, and approaches for engaging youth.
Register now at www.amea-global.com/ale26.
Read the full LIA-LB-01 learning brief, part of AMEA’s Learning into Action series, which documents and analyses BDS approaches from across the AMEA network to build a shared evidence base for the sector.