Paraguay Vouchers Revisited: Strategies for the Development of Training Markets

Can training schemes prosper in the long term?

This paper revisits the successful training voucher scheme and looks at demand for microenterprise training and effective program design. It has an overall goal of measuring and incorporating market sustainability. Its findings include:

  • A typology of service providers,which could be adapted as a framework for use during BDS market diagnostics or program evaluations;
  • Tips on a useful new indicator for measuring market development and nuances to look for when analyzing price trends in a voucher intervention;
  • Lessons on what information should be tracked to provide complementary services for microenterprise clients and generate useful monitoring data for program administrators.

Its conclusions show:

  • Geographical spread where Asuncion-based institutes have adopted a geographic diversification strategy,with the result that training is making inroads into previously underserved markets;
  • Subsidy levels have decreased since the second phase of the program maybe because of cheating. However the market subsidy indicator - the proportion of the voucher subsidy with regard to the larger market for training - is close to the indicator used to track subsidy level for voucher-eligible courses. This suggests that the Paraguayan market is still relatively dependent on vouchers;
  • Consumer satisfaction where over 50 percent of program participants were repeat users and half of microenterprises surveyed reported that they would pay for training in the event that vouchers were not available. Institutes reported a sharp decline in attrition rates due to vouchers;
  • Investment and innovation on the part of training providers where the expanding training diversifiers demonstrate leadership in their sectors, making new technologies and innovative approaches to education accessible to microenterprises.

The Paraguayan voucher program has permanently marked the country's training market and soon funds earmarked for training will be put directly in the hands of students.

About this Publication

By Goldmark, L. & Botelho, C.