The Cochabamba Case: Can Vouchers Stimulate Sustainable Market Change?

Training services with vouchers (voucher programs) are one of the most recent and innovative attempts to stimulate the Business Development Services (BDS) market. Their aim is to lessen the risk for the consumer by subsidizing the cost of training and to lessen the risk for the provider by ensuring payment once the courses are given.This paper describes the voucher program and examines its impact on the demand for BDS:

• Program voucher typically covers 40 to 80 percent of the cost of a training course;
• Microentrepreneurs are responsible for paying the difference before the class begins; this acts as an indicator of their commitment to attend the entire course;
• Vouchers are applicable at any training institute and for any course approved by the administering entity.

The paper aims to contribute to the Microenterprise Best Practices (MBP) Project's research agenda regarding voucher programs by drawing from the case of Cochabamba:

• Pros and cons of different exit strategies;
• Different approaches of integrating these strategies into the design of new programs at the earliest possible stage of implementation;
• Valid and practical indicators of best practices to monitor developments (or distortions) from voucher programs.