Expanding Financial Protection through Microfinance: Evidence from a Randomized Evaluation of Bundled Microfinance and Health Insurance in Nigeria

Last registered on June 29, 2026

Pre-Trial

General Information

Title

RCT ID

AEARCTR-0019020

Initial registration date

June 26, 2026

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

June 29, 2026, 9:39 AM EDT

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

Locations

Country

Nigeria

Region

Primary Investigator

Name

Nneka Osadolor

Affiliation

Centre for Economic Policy and Development Research

Contact Primary Investigator

Other Primary Investigator(s)

Additional Trial Information

Status

In development

Start date

2026-08-01

End date

2027-02-01

Keywords

Finance & Microfinance, Firms & Productivity, Health

Additional Keywords

JEL code(s)

Secondary IDs

Prior work

This trial does not extend or rely on any prior RCTs.

Abstract

Despite significant gains in financial access across low- and middle-income countries, financial health and resilience remain critically low among informal sector workers, largely due to exposure to uninsured health shocks. In Nigeria, only about 3% of adults aged 15-49 have any form of health insurance, leaving the majority vulnerable to catastrophic out-of-pocket expenditures that undermine business viability and loan repayment. This study provides causal evidence on the impact of bundling health insurance with microfinance loans on the financial outcomes of micro and small informal business owners in Edo State, Nigeria. In partnership with a microfinance institution and the Edo State Health Insurance Commission, eligible clients are offered a voluntary bundled product combining a microfinance loan with subsidised health insurance coverage. We implement a randomised encouragement design at the beat-week level, where the 24 operational units of the MFI are randomly assigned to encouragement or no-encouragement periods across 24 weeks of recruitment. Clients are free to enrol or not; only those visiting during encouragement weeks can access the bundled product. This design allows estimation of both the intent-to-treat (ITT) effect of the offer and, using two-stage least squares, the local average treatment effect (LATE) among compliers. Primary outcomes include business profit, loan default, financial health, and out-of-pocket health expenditure. Secondary outcomes include health-seeking behaviour and the impact of health expenditure on economic activity.

External Link(s)

Registration Citation

Citation

Osadolor, Nneka. 2026. "Expanding Financial Protection through Microfinance: Evidence from a Randomized Evaluation of Bundled Microfinance and Health Insurance in Nigeria." AEA RCT Registry. June 29. https://doi.org/10.1257/rct.19020-1.0

Sponsors & Partners

Experimental Details

Interventions

Intervention(s)

Intervention
This study employs a randomised encouragement design in which randomisation applies to the offer of the bundled product rather than to actual enrolment. The unit of randomisation is the beat-week – the 24 operational units of the MFB (each assigned to a dedicated credit and recovery officer) crossed with the 24 weeks of the recruitment period, yielding approximately 576 beat-week clusters. For each beat, weeks during the recruitment period will be randomly assigned to either encouragement (treatment) or no-encouragement (control) conditions. During encouragement weeks, all eligible clients visiting the beats will be offered the bundled product with full product information. During control weeks, no offer will be made, and clients receive the status quo product only. Clients remain free to enrol or not; only those visiting during randomly assigned encouragement weeks can access the bundled product. Randomisation will be stratified by branches of the MFB (4 branches) to ensure balance across study arms.

Intervention Start Date

2026-08-15

Intervention End Date

2026-12-31

Primary Outcomes

Primary Outcomes (end points)

Primary outcome: Financial health score, measured using the EFInA Financial Health Index.

Primary Outcomes (explanation)

This composite measure captures day-to-day financial management, resilience to shocks, and capacity to pursue financial opportunities.

Secondary Outcomes

Secondary Outcomes (end points)

Secondary outcomes are (1) out-of-pocket health expenditure (₦) in the 30 days prior to the survey; (2) loan default, defined as failure to repay within 30 days of the due date per MFI administrative records; (3) business profit, measured as monthly net revenue minus costs; (4) incidence of catastrophic health spending (OOP expenditure exceeding 10% of household consumption); (5) impact of health expenditure on business activity; and (6) health-seeking behaviour and utilisation of formal health services.

Secondary Outcomes (explanation)

Experimental Design

This study implements a randomised encouragement design to evaluate the causal impact of bundling health insurance with microfinance loans on the financial outcomes of informal micro- and small-business owners in Edo State, Nigeria. The study is conducted in partnership with a microfinance bank (MFB) operating 24 beats across 4 branches and the Edo State Health Insurance Commission.
The unit of randomisation is the beat-week. The 24 operational beats of the MFB are each assigned to encouragement (treatment) or no-encouragement (control) conditions on a week-by-week basis across 24 weeks of recruitment, yielding approximately 576 beat-week clusters. During encouragement weeks, all eligible clients visiting a beat are offered a bundled product comprising a microfinance loan and voluntary health insurance coverage (Bronze plan, ₦18,000 annual premium). During control weeks, clients receive the microfinance loan only. Randomisation is stratified by branch. Clients are never compelled to enrol; take-up is entirely voluntary.
Eligible participants are active loan clients and clients presenting for loan renewal who operate informal micro or small businesses. Two rounds of data collection – baseline and endline – will be conducted via structured surveys. The study will estimate the Intent-to-Treat (ITT) effect of the offer and the Local Average Treatment Effect (LATE) among compliers using Two-Stage Least Squares with the randomised offer as an instrumental variable for actual enrolment.

Experimental Design Details

Not available

Randomization Method

Randomisation will be conducted using a computer-generated random number procedure in Stata. For each of the 24 operational beats, the 24 recruitment weeks will be randomly assigned to either encouragement (treatment) or no-encouragement (control) conditions using a block randomisation procedure, stratified by branch (4 branches). Within each branch stratum, weeks will be assigned with equal probability to treatment and control, ensuring balance across arms within each branch. The assignment will be implemented by the research team and communicated to MFB branch coordinators on a weekly basis to minimise anticipation effects among loan officers and clients.

Randomization Unit

The unit of randomisation is the beat-week - the intersection of one of the 24 operational beats of the MFB and one of the 24 weeks of the recruitment period, yielding approximately 576 beat-week clusters. A beat is the smallest operational unit of the MFI, each managed by a dedicated Credit and Recovery Officer (CRO) responsible for a defined client portfolio within a branch. Weeks within each beat are randomly assigned to encouragement or no-encouragement conditions; all eligible clients visiting a beat during an encouragement week are offered the bundled product, while no offer is made during control weeks.
The unit of observation and analysis is the individual loan client.

Was the treatment clustered?

Yes

Experiment Characteristics

Sample size: planned number of clusters

576 beat-weeks (24 beats × 24 recruitment weeks)

Sample size: planned number of observations

Approximately 1728 to 2304 individual loan clients (576 beat-week clusters × 3 to 4 clients per cluster on average), based on MFB administrative data showing an average of 329 combined new and renewal loans per month across 24 beats. The exact number of observations will depend on realised client turnout during encouragement and control weeks over the 16-week recruitment period.

Sample size (or number of clusters) by treatment arms

288 beat-weeks assigned to encouragement (treatment) - approximately 864 to 1152 individual loan clients
288 beat-weeks assigned to no-encouragement (control) - approximately 864 to 1152 individual loan clients
Total: 576 beat-weeks, approximately 1728 to 2304 individual loan clients across both arms

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

Minimum detectable effect sizes are calculated assuming J = 576 beat-week clusters (24 beats × 24 weeks), n = 3-4 clients per cluster, ICC (ρ) = 0.29, R² = 0.10, α = 0.05 (two-tailed), and 80% power. The design effect ranges from 1.64 (n = 3) to 1.56 (n = 4). Primary outcome - Financial health score (continuous): MDE ≈ 0.08 standard deviations (Cohen's d). Using an illustrative baseline standard deviation of 17 points on a 0-100 financial health scale – consistent with EFInA's financial health measurement framework for Nigerian informal sector workers – this corresponds to a detectable difference of approximately 1.4 points on the financial health index. The exact MDE in index points will be updated following baseline data collection once the observed standard deviation is available. Secondary outcome - Loan default (binary): Assuming a baseline default rate of 6% per MFB administrative records, the MDE is approximately 2.4–2.5 percentage points, representing a detectable reduction from 6% to approximately 3.5%. This is expressed as a percentage point change in the probability of default. Secondary outcome - Business profit (continuous): MDE ≈ 0.08 standard deviations. The MDE in absolute Naira terms will be calculated after baseline data collection once the standard deviation of monthly business profit is observed. Secondary outcome - Out-of-pocket health expenditure (continuous): MDE ≈ 0.08 standard deviations. The MDE in Naira terms will be determined at baseline.

Supporting Documents and Materials

IRB

Institutional Review Boards (IRBs)

IRB Name

Edo State Ministry of Health - Health Research Ethics Committee

IRB Approval Date

2026-06-19

IRB Approval Number

HA/737/26/C/06191231

Analysis Plan