Access to Renewable Energy. Micro-Finance for Small Businesses and Micro Enterprises in Pakistan.

Last registered on May 04, 2023
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Pre-Trial

Trial Information

General Information

Title
Access to Renewable Energy. Micro-Finance for Small Businesses and Micro Enterprises in Pakistan.
RCT ID
AEARCTR-0010648
Initial registration date
December 16, 2022

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
January 03, 2023, 4:30 PM EST

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

Last updated
May 04, 2023, 7:58 AM EDT

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

Locations

Country
Pakistan
Region
Punjab and Sindh

Primary Investigator

Name
David Frank Müller
Affiliation
University of Mannheim, Department of Economics
Contact Primary Investigator

Other Primary Investigator(s)

PI Name
Alexandra Avdeenko
PI Affiliation
University of Heidelberg
PI Name
Markus Frölich
PI Affiliation
University of Mannheim and C4ED
Contact Investigator

Additional Trial Information

Status
In development
Start date
2022-09-01
End date
2025-03-31
Keywords
Environment & Energy, Finance & Microfinance
Additional Keywords
Index Insurance, Solar Panels, Technology Adoption
JEL code(s)
O13, H23, G21, G22
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
We study the uptake of solar panels financed through micro-loans by micro-enterprises and small businesses in rural Pakistan. Working with 1400 households, we test two interventions randomized at the household level: first, we provide households with a one-time subsidy payment at the beginning of the loan-period. Second, we provide an index-insurance throughout the loan repayment period that aims at insuring low returns of solar panels. Besides uptake behavior, we are testing the impacts of the two interventions on business profits, investments, and income variations over time. Individuals who meet the loan-eligibility criteria of the micro-finance institution and run a small business or enterprise are eligible for the treatments, which are assigned using a lottery for which the clients can apply.
External Link(s)

Registration Citation

Citation
Avdeenko, Alexandra, Markus Frölich and David Frank Müller. 2023. "Access to Renewable Energy. Micro-Finance for Small Businesses and Micro Enterprises in Pakistan.." AEA RCT Registry. May 04. https://doi.org/10.1257/rct.10648-1.2
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Experimental Details

Interventions

Intervention(s)
Intervention Start Date
2023-01-30
Intervention End Date
2024-04-30

Primary Outcomes

Primary Outcomes (end points)
Uptake of Solar panels
Primary Outcomes (explanation)
Uptake will be measured by the fraction of individuals who accept the loan offer conditional upon winning/losing the lottery, i.e., receiving the respective treatment/staying in the control.

Secondary Outcomes

Secondary Outcomes (end points)
1. Profits
2. Investments
3. Variations in income/profits
4. Electricity spendings/usage
5. Satisfaction with RE product
6. Awareness of climate change
7. Consumption
Secondary Outcomes (explanation)
1. Monthly and yearly profits of business.
2. Realized investments in last 12 months that were planned according to the baseline interview; and planned investments for next 12 months.
3. Difference between minimum and maximum profits in last 6 months.
4. Electricity spendings by source of electricity generation per month: electricity from the grid and electricity generated by other sources, like a generator.
5. Direct questions on the satisfaction with the solar panels and experience regarding maintenance and reliability of product.
6. Direct questions on the awareness about the impact of the climate change on the earth and the nature.
7. Food consumption: where there some days where people did not have food in last week/days and similar questions.

Experimental Design

Experimental Design
The micro-finance provider that we are working with operates in rural Pakistan with several field offices. Each field office is responsible for the clients in a specific area. The randomized control trial will be conducted on two levels: first, we will randomly assign the 116 field offices to one of two possible intervention groups. Second, within field offices, clients can apply for a renewable energy loan and a lottery. In the lottery, clients can win a prize with 50% probability. In the first group of field offices, the prize that clients can win is the subsidy treatment conditional upon accepting the loan. In the second group of field offices, the prize that clients can win is the risk-coverage treatment (index insurance) conditional upon accepting the loan. Hence, we will have four types of clients (i.e., applicants) that we can compare: (1) 350 applicants that win a subsidy treatment in the first type of field-offices; (2) 350 applicants that have not won the subsidy treatment in the first type of field-offices but can still take up the loan without the subsidy; (3) 350 applicants that win a risk-coverage treatment in the second type of field-offices; (2) 350 applicants that have not won the risk-coverage treatment in the second type of field-offices, but can still take up the loan without the risk-coverage. Thus, we plan to operate with 1400 clients as a target sample.
Experimental Design Details
Not available
Randomization Method
The randomization on both levels is conducted in office by a computer.
Randomization Unit
First level of randomization is on the field-office level: field offices will be randomly divided in two groups. In the first group of field-offices, clients can win the subsidy treatment and in the second group of field-offices, clients can win the risk-coverage treatment. Within each field office, there is a randomization on the applicant level. Half of the applicants are randomly assigned to win the lottery and thus receive their respective treatment conditional upon accepting the loan.
Was the treatment clustered?
Yes

Experiment Characteristics

Sample size: planned number of clusters
There are 116 field offices in the first step of randomization that can be considered as clusters; within clusters, treatment is randomly assigned among loan applicants.
Sample size: planned number of observations
1400 clients
Sample size (or number of clusters) by treatment arms
In the first randomization step, the field offices are randomly split in two groups.
(1) Hence, we have 58 field offices in which clients can win the risk-coverage treatment. Within these 58 field offices, we consider 700 applicants. Of those 700 applicants, 350 will be randomly assigned to win the lottery, i.e., to receive the risk-coverage treatment and another 350 will not win the lottery and will thus be considered as the control group. The 350 individuals in the control group can still take up the loan.
(2) Moreover, we have another 58 field offices in which clients can win the subsidy treatment. Within these 58 field offices, we again consider 700 applicants. Of those 700 applicants, 350 will be randomly assigned to win the lottery, i.e., to receive the subsidy treatment and another 350 will not win the lottery and will thus be considered as the control group. The 350 individuals in the control group can still take up the loan.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
Research and Development Solutions. Roshan Aaj Center, Asad Market, 1-9/4, Islamabad (Pakistan)
IRB Approval Date
2022-09-12
IRB Approval Number
IRB00010843
Analysis Plan