Stimulating SME performance: Evidence from a business training intervention in Liberia.

Last registered on April 17, 2019

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Pre-Trial

Trial Information

General Information

Title

Stimulating SME performance: Evidence from a business training intervention in Liberia.

RCT ID

AEARCTR-0002481

Initial registration date

October 16, 2017

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published

October 17, 2017, 2:01 PM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Last updated

April 17, 2019, 11:49 PM EDT

Last updated is the most recent time when changes to the trial's registration were published.

Locations

Country

Liberia

Region

West Africa

Primary Investigator

Name

Aisha Nansamba

Affiliation

BRAC Liberia

Contact Primary Investigator

Other Primary Investigator(s)

Additional Trial Information

Status

In development

Start date

2017-10-16

End date

2019-06-30

Keywords

Firms & Productivity, Labor, Post-conflict

Additional Keywords

Business management training, non-cognitive skills, customer care, Small and Medium enterprises (SMES), Firm Performance, Consumers

JEL code(s)

Skills, Firms performance

Secondary IDs

Abstract

The Liberian Micro Small and Medium Enterprises sector experienced a significant decline in performance during the Ebola outbreak. Business closures or downsizing were very frequent over this period. Similarly, BRAC Liberia Microfinance registered a significant increase in missed repayment rates, particularly among borrowers of its Small Enterprise Program (SEP). By July 2016, 12% of SEP clients had missed at least one repayment, up from 7% in January 2014.
Understanding the impact of interventions targeting MSMEs performance is thus important from a policy perspective. Improving management skills, and in particular customer care skills - that is, the ability to communicate effectively with customers, to be polite, helpful and welcoming, thus adopting a "customer first" mentality - seems a particularly promising avenue. CRS (2016) report indicates 41% of Liberians do not feel empathy towards others. Moreover, the Ebola outbreak was characterized by a dramatic reduction and aversion towards social interactions at all levels of society (World Bank, 2015). However, interacting with customers is an important part of the daily operations of typical MSME owners in the retail or service sectors.
The study is intended to assess the feasibility of alternative approaches to business management skills training for MSME owners in the post epidemic and disaster period. The baselines will inform us about which management skills and personality traits are associated with business performance. Also, we will assess firm owners attitudes towards different types of skills training. Our aim is then to evaluate the impacts of this pilot business training intervention on firm recovery and firm growth.

External Link(s)

Registration Citation

Citation

Nansamba, Aisha. 2019. "Stimulating SME performance: Evidence from a business training intervention in Liberia.." AEA RCT Registry. April 17. https://doi.org/10.1257/rct.2481-2.0

Former Citation

Nansamba, Aisha. 2019. "Stimulating SME performance: Evidence from a business training intervention in Liberia.." AEA RCT Registry. April 17. https://www.socialscienceregistry.org/trials/2481/history/45215

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Experimental Details

Interventions

Intervention(s)

The training will recognize that business outcomes related to firms poor performance partially result from poor business skills and knowledge on: i) financial management ii) records keeping iii) business organisation and iv) marketing skills. In addition, poor performance might stem from negligence regarding non-cognitive skills, namely: i) communication, ii) time management and use, low trust, minimal flexibility with customers and inadequate work place hygiene).
In order to enhance the firm owner’ abilities, firm owners will receive a 2 days training, which will cover a) business management skills, and b) inter-personal skills.
Training in business management modules will include: financial literacy, records keeping, sales and marketing. Modules on inter-personal skills will contain: customer care basics, good practices, and relevance of: communication, trust, flexibility, time management and work place hygiene/cleanliness.
Thus the training aims at improving firms performance through enhancing business practices and behavior, customer satisfaction and loyalty. Ultimately, the intervention aims to sustainably improve SMEs business outcomes and loan performance.

Training modules shall be developed by the research team, together with help from BRAC Microfinance and Adolescents programs trainers. Also, an organisational psychologist will be contracted in order to develop modules on interpersonal skills. Training will be delivered by BRAC Credit officers (CO) given their good relations with the clients. Credit Officers will use both English and pigeon English to be able to accommodate clients with low literacy levels. In order to be able to deliver the training, CO will be provided with a Training of Trainers for two days by the research team with the help of a psychologist.
The study will include both male and female clients. Selected SEP clients through lottery shall be invited to the respective branch locations to receive the training.

Intervention Start Date

2018-02-01

Intervention End Date

2019-03-31

Primary Outcomes

Primary Outcomes (end points)

Business performance

Primary Outcomes (explanation)

Main measurement of business performance will comprise of continuous variables namely; self-reported sales, profits, firm size and number of customers served. Sales are considered as the main outcome indicator given ease to recall the amounts by firm owners.

Secondary Outcomes

Secondary Outcomes (end points)

Loan Performance

Secondary Outcomes (explanation)

Loan performance will be the secondary outcome to be measured using continuous indicators namely; loan repayment rate, retention and loan size indicators.

Experimental Design

The study will be conducted, from the 6 counties where BRAC Small and Medium Enterprise (SEP) program operates: Bong, Margibi, Montserrado, Nimba, Grand Bassa and Lofa. This will allow us to capture regional variations.
In order to have equal representation from each county, we applied stratified random sampling to select our survey respondents (SEP clients). Then, clients shall be randomly assigned (at individual level) to receive business skills management and customer relations training. The remaining selected clients shall be assigned to the control group.
Individual firm owners’ will hence act as the unit of randomization and analysis.

Experimental Design Details

Randomization Method

SEP clients will be randomly assigned to participate in the survey through a lottery.The randomization will be done in office by a computer. The sample will be separated into strata (branch) and the randomization was done within each strata .

Randomization Unit

Individual firm owners will hence act as the unit of randomization and analysis.

Was the treatment clustered?

Experiment Characteristics

Sample size: planned number of clusters

17 BRAC Branch office locations

Sample size: planned number of observations

577 Individual Firms/businesses and 1,731 customers to the respective firms in 17 BRAC Branch office locations

Sample size (or number of clusters) by treatment arms

In total 577 individual firm owners [192 to receive only business management skills training +192 to receive both business management and interpersonal skills training +193 to be assigned to the control group].
Also, 1,731 customers (3 per firm) will be surveyed.

Minimum detectable effect size for main outcomes (accounting for sample design and clustering)

For power calculation, We considered four parameters i) significance level, ii) effect size, iii) effect size variability and iv) sample size using optimal design software. Given power 80% with a total number of 17 clusters, at significance level of 0.05, we would be able to detect an effect size equivalent to 0.20 (increase in sales). However, the sample was overestimated by 20% to cater for attrition.

Supporting Documents and Materials

IRB