The impact of large, flexible loans for microenterprises

Last registered on November 03, 2025
View Trial History

Pre-Trial

Trial Information

General Information

Title
The impact of large, flexible loans for microenterprises
RCT ID
AEARCTR-0017099
Initial registration date
November 03, 2025

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
November 03, 2025, 10:43 AM EST

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

Locations

Country
India
Region
Tamil Nadu

Primary Investigator

Name
Ben Roth
Affiliation
Harvard Business School
Contact Primary Investigator

Other Primary Investigator(s)

PI Name
Natalia Rigol
PI Affiliation
Harvard Business School
Contact Investigator

Additional Trial Information

Status
In development
Start date
2025-11-01
End date
2027-06-30
Keywords
Finance & Microfinance, Firms & Productivity, Gender
Additional Keywords
JEL code(s)
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
In this study, we use a randomized controlled trial in Tamil Nadu, India to evaluate the impact of a new loan product that is two to three times larger than a typical microfinance loan. The loan is targeted at borrowers who have taken near the maximum loan size and now seek larger loans to make capital investments or grow their businesses. The loans also have flexibility features, including repayment frequency options and the ability to take a grace period. We use primary and secondary data to quantity the impact of the new product on men's and women's business activity, income generation, and women's empowerment, as well as additional surveying with business employees and customers to evaluate spillover effects.
External Link(s)

Registration Citation

Citation
Rigol, Natalia and Ben Roth. 2025. "The impact of large, flexible loans for microenterprises ." AEA RCT Registry. November 03. https://doi.org/10.1257/rct.17099-1.0
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
The loans provided as part of the study are between 2,400 and 3,600 USD, which is equal to two to three times the maximum size of the standard microfinance loan offered by the partner MFI. These individual liability loans last between one and three years and have an interest rate of 22% APR. Borrowers are also able to choose the frequency of repayment – weekly, biweekly, or monthly - and have the option for a grace period whereby borrowers only need to pay the interest due during the first three months of the loan. The loans also include life and health insurance for the business owner. They are intended for borrowers to purchase a fixed asset to either expand their existing business or, in a few cases, to begin a business based on the skills that the borrower has developed as a wage worker.
Intervention Start Date
2025-11-01
Intervention End Date
2027-06-30

Primary Outcomes

Primary Outcomes (end points)
We will evaluate the following families of outcomes:
(i) Business Performance: this includes profits, revenues, business assets (including investment decisions and behaviors), number of employees and expenditures.
(ii) Livelihoods and Wellbeing: this includes household income, household asset ownership, and psychological wellbeing (such as PHQ4)
(iii) Empowerment: this includes decision-making and spillovers on other norms and attitudes as they relate to women’s labor force participation
(iv) Spillover Effects: this includes measure of consumer and employee surplus capturing the impact of the business on their customers and employees.
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
1,000 individuals will be enrolled in the study, with 500 randomly assigned to the treatment group and 500 randomly assigned to the control group. Recruitment will happen through SHGs, and randomization will be assigned at the level of the SHG. To evaluate impact, we will use an in-person baseline, midline, and endline. We will also capture spillover effects using surveys conducted with customers and employees of the businesses. This will happen at the same time as the midline. We will also use secondary data from the partner MFI to evaluate outcomes.
Experimental Design Details
Not available
Randomization Method
Randomization done in office by a computer
Randomization Unit
SHG
Was the treatment clustered?
Yes

Experiment Characteristics

Sample size: planned number of clusters
~300 SHGs
Sample size: planned number of observations
1000 microenterprises
Sample size (or number of clusters) by treatment arms
500 treatment, 500 control
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
We have 80% power to detect a heterogeneity in a sample whose average effect size is an increase in monthly profits of about Rs. 2,150. We have 80% power to detect the average treatment effect across the full population of borrowers in a sample whose average effect size is about Rs. 3,250 per month. Both of these figures are well within the range of estimates in the literature on the return to capital of microenterprises.
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
Harvard Business School
IRB Approval Date
2023-06-14
IRB Approval Number
N/A
Analysis Plan