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Impact Evaluation of the Secured Transaction Reform in Fiji

Last registered on March 13, 2023
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Pre-Trial

Trial Information

General Information

Title
Impact Evaluation of Secured Transaction Reform in Fiji
RCT ID
AEARCTR-0011005
Initial registration date
March 12, 2023

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 13, 2023, 3:33 PM EDT

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

Locations

Country
Fiji
Region

Primary Investigator

Name
Russell Toth
Affiliation
University of Sydney
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Other Primary Investigator(s)

PI Name
Christopher Hoy
PI Affiliation
World Bank
Contact Investigator

Additional Trial Information

Status
In development
Start date
2023-03-13
End date
2025-06-30
Keywords
Finance & Microfinance, Firms & Productivity
Additional Keywords
access to finance, secured transaction reform, movable collateral, small and medium enterprises, Fiji
JEL code(s)
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
A key challenge for small and medium enterprises (SMEs) to access finance in many countries is that financial services laws make it costly and inefficient for financial institutions to accept anything other land and buildings as collateral for loans. This particularly excludes SMEs from accessing finance because they are less likely to hold secure title to such assets. A "secured transaction reform" (STR) can create a new legal framewok that removes these barriers to financing for SMEs, expanding the ist of acceptable collateral to include movable collateral such as vehicles, inventory, equipment, and receivables. We evaluate the impacts of an STR in Fiji using a randomized encouragement design. The evaluation will measure immediate outcomes of the reform such as the number of businesses getting access to credit, and the amount of credit that businesses access. It will also measure ‘downstream’ outcomes such as investment in assets and labor, revenue, profitability, and creation of new businesses. The findings will assist governments around the world in designing similar reforms to improve SMEs’ access to credit and support private sector development.
External Link(s)

Registration Citation

Citation
Hoy, Christopher and Russell Toth. 2023. "Impact Evaluation of Secured Transaction Reform in Fiji." AEA RCT Registry. March 13. https://doi.org/10.1257/rct.11005-1.0
Sponsors & Partners

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Experimental Details

Interventions

Intervention(s)
An intervention to maximize the take-up of enterprise loans following the secured transaction reform.
Intervention (Hidden)
The government of Fiji is implementing a Secured Transaction Reform (STR) with support from the Asian Development Bank's Private Sector Development Initiative (ADB/PSDI). Phase 1 of the STR was completed with the Personal Property Securities Act passing the Fiji Parliament in September, 2017. In Phase 2, working with ADB/PSDI, the Reserve Bank of Fiji developed and rolled out a Personal Property Securities Registry (PPSR) in May 31, 2019.

Phase 3 of the STR involves leveraging the legal change and the PPSR to enhance access to finance for SMEs by encouraging financial institutions to expand their product offerings and marketing to cover movable collateral-based financing, and encouraging SMEs to take up these products. This will be implemented through a randomized encouragement design. (all) financial institutions will be encouraged to create and market financial products that leverage the STR, while a randomized set of SMEs will be encourage to take up new financial products after the baseline survey.
Intervention Start Date
2023-07-15
Intervention End Date
2024-02-15

Primary Outcomes

Primary Outcomes (end points)
We aim to analyze impacts on access to finance (including substitution and additionality) as a first-stage outcome, and then to evaluate impacts on enterprise outcomes such as investment in assets and labor, revenue, profitability, and expansion and creation of new enterprises, along with impacts on owners/senior management such as their future business expectations.
Primary Outcomes (explanation)
To be included in PAP.

Secondary Outcomes

Secondary Outcomes (end points)
To be included in PAP.
Secondary Outcomes (explanation)
To be included in PAP.

Experimental Design

Experimental Design
A randomized encouragement design.
Experimental Design Details
The study design is a randomized controlled trial, involving a randomized encouragement design.

First, there is a screening survey conducted to recruit eligible MSMEs to participate in the study, seeking to identify a sample frame of 2400 enterprises. The screening is based on ensuring that the MSMEs meet the basic requirements of the study (located in the eligible sectors, geographies (within 40 miles of Lautoka, Nadi, or Suva), and size as measured by turnover) and ensuring they can be contacted by surveyors. Beyond these necessary requirements, enterprises are screened on possessing the basic characteristics necessary to qualify for access to formal sector finance, including business registration, tax ID, and having a bank account.

Once the 2400 enterprises have been screened, there will be a baseline survey. After the baseline survey, 50% (approximately 1200) enterprises will be randomly selected based on stratified random sampling for the treatment (with the remainder as control).

After randomization, intervention(s) (encouragements to take up new or modified loan products) will be rolled out to MSMEs in the treatment group.
Randomization Method
The randomization will be done digitally.
Randomization Unit
Firm level.
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
N/A
Sample size: planned number of observations
2,400 enterprises.
Sample size (or number of clusters) by treatment arms
Half will be the treatment group, and half will serve as the control group.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
To be included in PAP.
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
Innovations for Poverty Action
IRB Approval Date
2023-01-15
IRB Approval Number
15524
Analysis Plan

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials