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Reducing Credit Market Frictions for Workers: Role of the Firm

Last registered on October 28, 2024
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Pre-Trial

Trial Information

General Information

Title
Reducing Credit Market Frictions for Workers: Role of the Firm
RCT ID
AEARCTR-0014607
Initial registration date
October 24, 2024

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 28, 2024, 1:17 PM EDT

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

Locations

Country
India
Region

Primary Investigator

Name
Shreya Sarkar
Affiliation
University of California, Berkeley
Contact Primary Investigator

Other Primary Investigator(s)

Additional Trial Information

Status
On going
Start date
2024-08-16
End date
2026-08-16
Keywords
Finance & Microfinance, Firms & Productivity, Gender, Labor
Additional Keywords
JEL code(s)
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
Low-income individuals often face barriers in accessing productive capital that could enhance their economic potential. When access to such capital increases worker productivity, the lack of it can reduce both worker productivity and firm revenues. In collaboration with a large service-providing firm, we aim to reduce credit market barriers that hinder worker investment in productive capital.

The treatment includes a bundled intervention: (i) a randomized 10% discount on the price of capital, which can be applied towards the lender's deposit requirement, and (ii) a connection to a lender. Subsequent experiments will separately randomize access to each component to isolate their individual effects and explore any complementarity between them. Additionally, we plan to conduct a lab-in-the-field experiment to estimate whether the firm's involvement increases the lender's probability of lending to this population and whether firm facilitation is ultimately profitable for the firm.
External Link(s)

Registration Citation

Citation
Sarkar, Shreya. 2024. "Reducing Credit Market Frictions for Workers: Role of the Firm." AEA RCT Registry. October 28. https://doi.org/10.1257/rct.14607-1.0
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
Randomize access to a discount equal to 10% of the cost of the productive capital which can be used towards the deposit requirement of the lender and connect to a lender.
Intervention (Hidden)
Main analysis will focus on the group which has a high likelihood of getting ex-ante lender approval, i.e. whose ex-ante stated cibil score is more than 700 or they are new to credit. (This may change if we learn the lender is using any other metric to predict approvals such as owned home).
Intervention Start Date
2024-08-16
Intervention End Date
2025-08-16

Primary Outcomes

Primary Outcomes (end points)
Admin data: Worker savings, jobs done, earnings, late arrival to jobs, job cancelled by worker, firm revenues, lender revenues
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Survey data: worker non-work outcomes welfare (leisure, family welfare)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
Workers interested in purchasing the productive capital will apply following communication from the firm. After completing a baseline they will be randomized into treatment vs. control if they complete the baseline and submit key documents.
Experimental Design Details
The productive capital here is scooters which is a very relevant capital for these workers - it is a cost and time saving technology for these workers as they have to travel to the house of the clients to complete various jobs in the services sector such as beauty related, spa related, etc. The target group is female workers of the app, hence an important contribution will also be in understanding how reducing mobility constraints can help enhance female work force participation.
Randomization Method
Using computer
Randomization Unit
Individual
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
0
Sample size: planned number of observations
400 in the first experiment
Sample size (or number of clusters) by treatment arms
60% in treatment, 40% in control
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
University of California, Berkeley
IRB Approval Date
2024-08-16
IRB Approval Number
2024-04-17427
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