Business model innovation for behaviour change within the goat value chain in Ethiopia: implications for policy and investment

This policy brief examines how behaviour change in Ethiopia’s goat value chain was achieved through trust-based, market systems facilitation under the Resilience in Pastoral Areas (RiPA) programme. It calls on policy-makers and donors to invest in embedded actors, decentralised market access and scalable peer learning models to sustain inclusive, climate-resilient livestock trade.

Key messages

• Innovations in business models are difficult for external organisations such as non-governmental organisations (NGOs) to introduce. Despite best intentions, such innovations are overly focused on reaching marginalised or vulnerable groups and not necessarily on the direct and indirect costs experienced by a business that may lead to increased revenues. Traders especially easily keep the aspects of the business model innovation that work and drop any aspect, such as new livestock pricing models, that do not yield the desired returns. In this study, most traders continued business relationships with rural aggregators using mobile phones because it reduced the traders’ costs when sourcing livestock. National traders do not offer weight-based pricing of livestock because it diminishes profit margin, despite preference for livestock pricing by regional traders.
• Digital market information is the single most cost-effective driver of change. Phone and WhatsApp communication helps align supply with buyer demand, builds trust and reduces losses. But weak telecom networks limit the transformative potential. Expansion of rural telecom access, as well as investment in digital applications or low-cost SMS-based tools, make markets more accessible to pastoralists and increase trade from rural areas.
• Trust-based credit supports business continuity and strengthens relationships but is fragile. Defaults and lack of formal mechanisms expose actors to high risks. A fixed amount of working capital prevents traders from off-taking more livestock from rural areas, especially when there is abundant supply. Donor-backed escrow systems and guarantee funds create an alternative source of low-cost finance, especially during times of crisis, such as drought, when it is necessary to remove more livestock and increase incomes to pastoralists.
• Transport and market infrastructure are critical enablers of scale and inclusion. Shared trucking and feeder-road investments reduce costs, expand women’s participation and improve access to high-value markets. Co-financed local market centres and shared vehicle schemes can be good-value investments for governments and donors.