Credit Constraints and the Adoption of a Multi-layered Farming Model

Last registered on March 31, 2019

View Trial History

Pre-Trial

Trial Information

General Information

Title

Credit Constraints and the Adoption of a Multi-layered Farming Model

RCT ID

AEARCTR-0004059

Initial registration date

March 26, 2019

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

March 31, 2019, 11:22 PM EDT

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

Locations

Country

India

Region

Uttar Pradesh

Primary Investigator

Name

Liang Bai

Affiliation

King's College London

Contact Primary Investigator

Other Primary Investigator(s)

PI Name

Camille Boudot

PI Affiliation

University of Edinburgh

Contact Investigator

Additional Trial Information

Status

On going

Start date

2018-12-15

End date

2019-12-31

Keywords

Agriculture, Finance & Microfinance

Additional Keywords

JEL code(s)

Secondary IDs

Abstract

This study aims to investigate whether the availability of micro-finance loans increases the adoption of an innovative, multi-layered farming model in northern India. The technology in question enables small vegetable growers to plant two different crops simultaneously, via the use of an overground structure. We work with a local NGO to provide informational and technical assistance to all participating households, while randomizing the availability and interest rate of micro-finance loan products.

External Link(s)

Registration Citation

Citation

Bai, Liang and Camille Boudot. 2019. "Credit Constraints and the Adoption of a Multi-layered Farming Model." AEA RCT Registry. March 31. https://doi.org/10.1257/rct.4059-1.0

Former Citation

Bai, Liang and Camille Boudot. 2019. "Credit Constraints and the Adoption of a Multi-layered Farming Model." AEA RCT Registry. March 31. https://www.socialscienceregistry.org/trials/4059/history/44435

Sponsors & Partners

Experimental Details

Interventions

Intervention(s)

Our interventions are a standard micro-finance joint liability group loan product, as marketed by a local MFI, coupled with an interest rate rebate. Depending on the treatment group, the rebate is either unconditional or conditional on adoption of the farming model.

Intervention Start Date

2019-01-14

Intervention End Date

2019-03-30

Primary Outcomes

Primary Outcomes (end points)

Our key outcome is the adoption rate of the multi-layered farming model.

Primary Outcomes (explanation)

We also plan to examine potential heterogeneous treatment effects along the following dimensions: (i) expected distribution of net returns to adoption, (ii) extent to which the household is credit constrained, (iii) risk preferences, and (iv) time preferences.

Secondary Outcomes

Secondary Outcomes (end points)

Secondary Outcomes (explanation)

Experimental Design

Treatment Arm 1: This group will receive informational and technical assistance from our NGO partners. This includes an initial orientation meeting, a series of video information sessions, the setting up of a demonstration plot, and guidance throughout the growing season.

Treatment Arm 2: In addition to T1, this group will be offered a standard micro-finance loan product from a local MFI. It is a joint liability group loan, with a minimum of 10 members per group. The total amount disbursed is Rs. 14,750, to be repaid in fortnightly instalments over 14 months. The amount is designed to cover all of the required expenditures related to adopting the farming model (i.e. cost of building the structure, and purchasing the relevant seeds). The total interest amount is Rs. 2,050, or equivalent to a flat interest rate of 13.89%.

Treatment Arm 3: In addition to T2, this group will receive an unconditional interest rate rebate if they decide to take out a loan. The rebate amount covers half of the interest payments, thereby reducing the interest rate on the loan to approximately 7%. The rebate will be disbursed in equal fortnightly instalments of Rs. 40 over the repayment period by our study staff.

Treatment Arm 4: This group is identical to T3, except the interest rate rebate will be conditional on the monitored adoption of the farming model. Adoption will be monitored by study staff based on the following criteria: (a) building of the overground structure; (b) planting of a ground-cover and above-cover crop, and (c) planting in both the first and second growing cycles.

Experimental Design Details

Randomization Method

Randomization done in office by a computer

Randomization Unit

Gram Panchayat

Was the treatment clustered?

Yes

Experiment Characteristics

Sample size: planned number of clusters

40 Gram Panchayats

Sample size: planned number of observations

4,000 households (100 households per GP)

Sample size (or number of clusters) by treatment arms

T1 (technical assistance only): 9 GPs;
T2 (technical assistance + MFI loan): 11 GPs;
T3 (technical assistance + MFI loan + unconditional interest rate rebate): 9 GPs;
T4 (technical assistance + MFI loan + conditional interest rate rebate): 11 GPs.

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

Supporting Documents and Materials

IRB