Original abstracts from the papers in the database are provided below. All abstracts are drawn directly from the papers referenced. Links to access the papers are provided, although
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Drexler, Fischer, and Schoar (2012)
Individuals and business owners engage in an increasingly complex array of financial decisions that are critical for their success and well-being. Yet a growing literature documents that in both developed and developing countries, a large fraction of the population is unprepared to make these decisions. Evidence on potential remedies is limited and mixed. Two randomized trials test the impact of financial training on firm-level and individual outcomes for microentrepreneurs in the Dominican Republic. We find no significant effect from a standard, fundamentals-based accounting training. However, a simplified, rule-of-thumb training produced significant and economically meaningful improvements in business practices and outcomes.
Intervention settings: Urban (Santo Domingo).
Intervention description: Comparison between: 1) Standard, fundamentals-based accounting training & 2) a simplified, rule-of-thumb training that teaches basic heuristics to manage finances.
Sample: 1,193 business or personal loan clients (90% women).
Findings: Only rule-of-thumb training produced significant improvements in business practices and outcomes (by 6-12% relative to control). Increase in sales in bad weeks. Impact pronounced for micro-entrepreneurs with poor financial literacy upfront. Impacts suggest reducing complexity of training program.
Microfinance and Poverty: Using Panel Data from BangladeshKhandker (2005)
Microfinance supports mainly informal activities that often have a low return and low market demand. It may therefore be hypothesized that the aggregate poverty impact of microfinance is modest or even nonexistent. If true, the poverty impact of microfinance observed at the participant level represents either income redistribution or short-run income generation from the microfinance intervention. This article examines the effects of microfinance on poverty reduction at both the participant and the aggregate levels using panel data from Bangladesh. The results suggest that access to microfinance contributes to poverty reduction, especially for female participants, and to overall poverty reduction at the village level. Microfinance thus helps not only poor participants but also the local economy.
Intervention settings: Rural.
Intervention description: Group-liability credit for income-generation activity. Some loans for consumption and housing.
Methodology: Ex-post evaluation with panel data of clients and non-clients.
Sample: Mainly women; very poor and poor.
Findings: Credit led to much higher poverty reduction among women clients' HHs than among men's. Slightly higher impact on HHs in exterme poverty, than those in moderate poverty. MF accounts for more than half of the 3% decline in poverty among clients. Female borrowing has a positive effect on HH food consumption (male borrowing has no effect).
Atkinson, de Janvry, McIntosh and Sadoulet (2010)
We report on an experiment in which a new set of commercial savings products, informed by the behavioral finance literature, were offered to the microfinance borrowers of Guatemala's largest public-sector bank. We find that prompting savings at the time of loan repayment leads savings deposits to double relative to the control, and framing a contribution of 10% of the loan payment causes them to double again. Loan repayment and savings accumulation appear to be complementary. Mainstreaming the most successful product tested here would allow the bank to realize savings sufficient to leverage 50% of the short-term loan portfolio.
Intervention settings: N/A (locations unspecified).
Intervention description: New commercial savings products, with no financial incentives or penalties, were offered to existing borrowers.
Sample: 1,375 borrowers from 20 microfinance branches of Guatemala's largest public sector bank.
Findings: Prompting for savings at the time of loan payments doubles savings, while suggesting a savings deposit equal to 10% of the loan repayment causes savings to double again. Women are significantly more likely to take up the offer of a savings account. However, women's accumulated net savings are significantly lower overall.
Dupas and Robinson (2009)
Does limited access to formal savings services impede business growth in poor countries? To shed light on this question, we randomized access to non-interest-bearing bank accounts among two types of self-employed individuals in rural Kenya: market vendors (who are mostly women) and men working as bicycle-taxi drivers. Despite large withdrawal fees, a substantial share of market women used the accounts, were able to save more, and increased their productive investment and private expenditures. We see no impact for bicycle-taxi drivers. These results imply significant barriers to savings and investment for market women in our study context. Further work is needed to understand what those barriers are, and to test whether the results generalize to other types of businesses or individuals.
Intervention settings: Rural.
Intervention description: Individual commitment savings products offered by a village bank. Interest-free account; high withdrawal fees. Tested the importance of savings constraints for self-employed individuals.
Methodology: RCT - Moderate rigor (small sample size).
Sample: 185 microentpreneurs.
Findings: Positive impact of savings on business investment among women (40% increase). Increase in women's private expenditures (37 to 40% higher). Some impact on making women less vulnerable to health shocks. No effect for men.
Klinger and Schündeln (2011)
We study the effect of entrepreneurial training on enterprise outcomes, in particular whether business training for (potential) entrepreneurs of small- and medium scale enterprises can lead to an increase in the number of business start-ups or an expansion in the size of existing businesses. We study this question by analyzing the results of business training programs that an NGO held in Central America between 2002 and 2005. To deal with endogenous selection into the training program, we exploit the fact that a fixed number of applicants are taken into the training program based on a pre-training score, which creates a discontinuity around which we can compare accepted and rejected applicants and estimate the effect of training with a regression-discontinuity design. We find that receiving business training significantly increases the probability that an applicant to the workshop starts a business or expands an existing business. Thus, entrepreneurial activity such as starting and expanding businesses can be fostered by training. Exploiting the fact that in the last stage the most successful participants of the program receive substantial monetary prizes (between US$ 6,000 and 15,000) we can also provide some experimental evidence that suggests the presence of financial constraints. Finally, we investigate gender differences, and find that females experience a much larger increase in the probability of starting a business if they win the monetary prize than men, suggesting financial constraints may be significantly larger for female entrepreneurs.
Intervention settings: Not reported.
Intervention description: TechnoServe business training program implemented between 2002-2005. The program is intended for both individuals who wish to start a business, as well as for those who already have a business. Those individuals with existing businesses have about 10 employees on average. Thus, unlike some other programs, this program targets businesses of a size beyond that of household enterprises.
Methodology: Regression discontinuity design.
Sample: 655 male and female current and potential entrepreneurs who have scored into the Technoserve program based on a score of entrepreneurial ability. (Comparison group is those who did not score into the program). Current entrepreneurs have about 10 employees (not household enterprises).
Findings: Business training significantly increases the probability that an applicant to the workshop starts a business (4-9 percentage points) or expands an existing business (25 to 56 percentage points). Differential impacts of different parts of the program on the start-up of new business and the expansion of existing businesses. Results suggest financial constraints to entrepreneurs are present, and financial constraints for women are greater than for men. The effect of the full training program on business start-up or expansion is larger for male participants.