SummaryIn Composite indicators for measuring quantity and quality of services were developed and evaluated through monthly formative supervisions by qualified and well-trained district supervisors. The strategy was based on a fixed fee per quality-approved service. The entire budget spent on the implementation of PBF amounted to $0.25 ⁄ cap ⁄ year, of which $0.20 ⁄ cap ⁄ year for subsidies and an estimated $0.05 ⁄ cap ⁄ year for administration, supervision and training. A positive effect on utilization rates was only seen for activities that were previously less well organized; in this case, growth monitoring services and institutional deliveries. The quality of services, defined as the compliance rate with national and international norms, rose considerably for all services in both groups. A sustained level of quality between 80% and 95% was reached within 18 months in the first group. A similar result was reached in the second group in 8 months.