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Abstract
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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 branch (beat)-week level, where the 24 operational units of the MFI are randomly assigned to encouragement or no-encouragement periods across 16 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 financial health and out-of-pocket health expenditure. Secondary outcomes include business profit, loan default, health-seeking behaviour and the impact of health expenditure on economic activity.
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After
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 affects 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 informal micro and small business owners in Edo State, Nigeria. In partnership with a microfinance institution and the Edo State Health Insurance Commission, eligible interested clients are offered a voluntary bundled product combining a microfinance loan with subsidised health insurance coverage. We implement a Randomized Encouragement Design at the branch-week level, where the 24 operational units of the MFI are randomly assigned to encouragement or no-encouragement periods across 16 weeks of recruitment. Clients are free to enrol or not; only those visiting during encouragement weeks can access the bundled product. We estimate both the Intent-to-Treat (ITT) effect of the offer and, the Local Average Treatment Effect (LATE) among compliers. A two-wave endline design is implemented: Wave 1, administered two months after the end of the recruitment period, and Wave 2, administered four months after recruitment. The outcomes include health insurance take-up, out-of-pocket expenditure (collected at wave 1), and catastrophic health spending, health-seeking behaviour, financial health, business profit, and loan default (collected at wave 2).
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Last Published
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August 15, 2026 05:58 AM
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September 04, 2026 01:22 PM
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Primary Outcomes (End Points)
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Primary outcome: Financial health score, measured using the EFInA Financial Health Index.
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Primary outcomes: 1) insurance take-up (2) out-of-pocket health expenditure
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Primary Outcomes (Explanation)
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This composite measure captures day-to-day financial management, resilience to shocks, and capacity to pursue financial opportunities.
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1) insurance take-up measured as a binary indicator equal to one if the client has an active EDOHIC enrolment record arising from the study's encouragement period; and (2) out-of-pocket health expenditure measured as the total household spending on health care in the 30 days prior to the survey, net of any amounts reimbursed by insurance, from the endline survey.
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Experimental Design (Public)
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Before
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 16 weeks of recruitment, yielding approximately 384 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.
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After
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 16 weeks of recruitment, yielding approximately 384 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 endline data is collected across two waves to enable short-run and long-run analysis of effects. Wave 1 is administered approximately two months after the end of the recruitment period and focuses on outcomes expected to respond quickly to insurance access, specifically insurance take-up, out-of-pocket health expenditure, and catastrophic health spending. Wave 2 is administered approximately four to five months after the end of the recruitment period and captures outcomes that require sustained exposure to health insurance coverage exposure, including health-seeking behaviour, the financial health score, and business profit. 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.
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Randomization Unit
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The unit of randomisation is the beat-week - the intersection of one of the 24 operational beats of the MFB and one of the 16 weeks of the recruitment period, yielding approximately 384 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.
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After
The unit of randomisation is the beat-week (the intersection of one of the 24 operational beats of the MFB and one of the 16 weeks of the recruitment period), yielding approximately 384 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.
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Secondary Outcomes (End Points)
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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.
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Secondary outcomes are (1) catastrophic health spending (2) health-seeking behaviour, (3) financial health score (4) business profit, and (5) Loan default
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Secondary Outcomes (Explanation)
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Secondary outcomes are (1) catastrophic health spending, measured as a binary indicator equal to one if out-of-pocket health expenditure exceeds 10 per cent of total household expenditure in the same 30-day reference period; (2) health-seeking behaviour, defined as the type of care sought at the most recent health event, timeliness of care-seeking, and utilisation of the EDOHIC-assigned contracted facility among enrolled clients; (3) Financial health score, defined as a composite index adapted from the EFInA Financial Health Framework; (4) Business profit measured as the net monthly business income defined as total revenue minus total costs in the 30 days prior to the survey, self-reported at the endline; (5) Loan default measured as a binary indicator equal to one if the client's loan is classified as non-performing in Zeemat's internal loan management system
The financial health score is a composite measure captures day-to-day financial management, resilience to shocks, and capacity to pursue financial opportunities.
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