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Rural financial intermediation and agricultural investment: Evidence from the Rural Finance Expansion Program in Zambia and the Zambian Savings Group Panel (ZamSaP)
Initial registration date
July 12, 2018
July 19, 2018 9:19 PM EDT
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University of Mannheim
Other Primary Investigator(s)
University of Göttingen
University of Mannheim
Additional Trial Information
The study aims to evaluate the impact of the Rural Finance Expansion Program (RUFEP), an initiative of the International Fund for Agricultural Development (IFAD) and the Ministry of Finance of the Republic of Zambia. The program’s goal is to improve the livelihood of rural communities by providing access to financial institutions. The population of interest is active members of Community-Based Financial Institutions (CBFIs) or saving groups, engaging in internal savings and credit schemes. These saving groups are supported and supervised by four Zambian implementing partners, which have a grant agreement with RUFEP.
The first intervention of the study facilitates linking CBFIs to formal banks. Thereby, banks shall provide access to formal financial services for CBFIs and enable each saving group to increase their savings and loan capacity.
The second intervention involves an informal insurance component. The majority of saving groups have established a community-based microinsurance mechanism called Social Fund (SF), which aims to cover the most severe socio-economic shocks like illnesses or funerals. A set of recommendations is provided to the groups so that they would be able to increase the Social Fund’s capacity to alleviate the impact of socio-economic shocks. Key features of this recommendation consist of financial education regarding (micro) insurance combined with advocating an increase in member’s contributions which could lead to an increase in grants. The study is conducted as a Randomized Controlled Trial, comparing a control group with 3 treatment groups. Two treatment groups receive each intervention respectively, while the third treatment groups receives a combination of the two interventions. Registration Citation
Frölich, Markus, Andreas Landmann and P. Linh Nguyen. 2018. "Rural financial intermediation and agricultural investment: Evidence from the Rural Finance Expansion Program in Zambia and the Zambian Savings Group Panel (ZamSaP)." AEA RCT Registry. July 19.
The goal of RUFEP, the IFAD-support programme to be evaluated, is to increase access to and use of financial services by the poor rural population in Zambia. This will contribute to improving livelihoods of the rural poor and enhance the rural population’s capacity for agricultural investment.
The intervention is divided in two components: The first component concerns a linkage of community-based financial institutions (also called savings groups) to formal financial services, in specifically formal financial institutions like banks or mobile network providers. The second intervention provides a set of recommendations concerning community-based micro insurance to strengthen the saving groups’ capacity to insure socio-economic shocks of their members.
Intervention Start Date
Intervention End Date
Primary Outcomes (end points)
The key outcome of the first intervention is increased investment activity and less unsatisfied demand for loans in savings groups.
Regarding the second intervention, a key outcome is and less vulnerability to shocks and better mechanisms to cope with socio-economic shocks.
Primary Outcomes (explanation)
Secondary Outcomes (end points)
Secondary Outcomes (explanation)
A balanced randomization was conducted to divide the 520 savings group clustered into three treatment group and one control group. All savings group will receive some general trainings regarding on how to strengthen their group functioning. Apart from the general training which is the only training the control group is part of, the first treatment group receive trainings specifically aimed to link them to formal financial institutions. The second treatment group benefit from trainings specifically on how to improve their inherent group insurance mechanism (so called social fund). Finally, the third treatment group are entitled to both social fund and linkage trainings.
Experimental Design Details
Computerized randomization was conducted while balancing within each NGO based on 26 socioeconomic variables.
A cluster consists of one or several villages, with one or several saving groups each. In fact, there are three combinations for a cluster. Clusters are set up to avoid spillover effects. The main indicator for assigning a village or saving groups to a cluster is location or proximity to other villages or saving groups.
First, if a village is sufficiently remote from other villages or saving groups, the spillover effects are very unlikely. Usually one saving group is located in such a village, which is generally in a rural area. In this case, the saving group corresponds with a village and forms a randomisation unit. The second case consists of several saving groups in the area of one village. Then, saving groups are too close and spillover effects are possible. In that case, several saving groups are assigned to a village and form a randomization unit. Lastly, several villages with several saving groups respectively form a randomization unit. This is the case when independently administered village are geographically close and spillover effects between saving groups cannot be ruled out.
Was the treatment clustered?
Sample size: planned number of clusters
520 saving groups or community-based financial institutions
Sample size: planned number of observations
survey sample of ca. 2000 savings
Sample size (or number of clusters) by treatment arms
Control Group: 140 groups
Treatment 1: 146 groups
Treatment 2: 124 groups
Treatment 3: 108 groups
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
INSTITUTIONAL REVIEW BOARDS (IRBs)
University of Mannheim
IRB Approval Date