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Stimulating Microenterprise Growth: Experimental Evidence from Uganda
Last registered on April 05, 2017

Pre-Trial

Trial Information
General Information
Title
Stimulating Microenterprise Growth: Experimental Evidence from Uganda
RCT ID
AEARCTR-0000401
Initial registration date
June 06, 2014
Last updated
April 05, 2017 1:07 PM EDT
Location(s)
Region
Primary Investigator
Affiliation
University of Connecticut
Other Primary Investigator(s)
Additional Trial Information
Status
Completed
Start date
2012-07-31
End date
2014-11-01
Secondary IDs
Abstract
This pre-analysis plan details the analysis to be conducted on new data being collected for an evaluation of a micro-loan, grant and training program that was conducted at the end of 2013. Extensive data has already been collected on a range of business outcomes and has found significant effects of pairing ILO Start Your Business (SYB) trainings with microfinance on business outcomes for men. It is though unclear what the effect of these programs has been on general individual and household welfare. The next data collections will conduct two household follow-up surveys of the participants of the program to understand the long-term effect of cash grants and finance for both business and household welfare outcomes.
External Link(s)
Registration Citation
Citation
Fiala, Nathan. 2017. "Stimulating Microenterprise Growth: Experimental Evidence from Uganda." AEA RCT Registry. April 05. https://doi.org/10.1257/rct.401-2.0.
Former Citation
Fiala, Nathan. 2017. "Stimulating Microenterprise Growth: Experimental Evidence from Uganda." AEA RCT Registry. April 05. http://www.socialscienceregistry.org/trials/401/history/15888.
Sponsors & Partners

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Experimental Details
Interventions
Intervention(s)
Intervention Start Date
2012-08-01
Intervention End Date
2012-11-01
Primary Outcomes
Primary Outcomes (end points)
The main questions of interest for the next rounds of data collection include a range of indicators on the following topics:

1. Income
The existing data collection has focused on outcomes for the main business. Individuals and households in Africa though often have multiple sources of income. It is not clear from the current data if the money from the grants and loans was used for productive investment in other enterprises, or has replaced other income. A detailed exploration of the other businesses run by the individual and others within the family will be conducted.

2. Intra-household bargaining and money allocation
The issue of money allocation within the household is important, especially for married women. The initial results of the SYB evaluation show a negative effect for married women with family living nearby. It is not yet clear what happened to the money women received. It is common for women in Africa to have little or no control over money they earn or receive and are expected to give money to their husbands or extended family for both productive and non-productive investment. This new survey will explore women’s bargaining power over money within the household to determine what might have led to these negative results and determine where the money went.

3. Investment in household welfare
While the initial results for men with training and loans has been to increase business profits, it is not clear what the men did with the money. There are currently no consumption or savings impacts from the program. It is possible that men simply use the extra money for short-term individual consumption, which would not have significant welfare implications. It is also possible that there is a hidden welfare effect on business or household assets and investment. The household survey will thus explore the household assets and spending further to determine if there is a positive welfare effect from the programs.

4. Unintended consequences
The initial results have raised a number of questions about the unintended consequences of the programs, especially for family employment and child schooling. The household survey will further explore this issue to better understand whether the business owners pulled children out of school to work in the business, and if so, for how long.
Primary Outcomes (explanation)
Secondary Outcomes
Secondary Outcomes (end points)
Secondary Outcomes (explanation)
Experimental Design
Experimental Design
From August to October 2012, 1,550 microenterprise owners in Uganda were offered randomly either a loan, grant, businesses skills training, a combination of these programs, or no program (the control group).
Experimental Design Details
Individuals have been randomly selected and split into five different groups. 406 were assigned to the loans intervention, 401 to the loans and training, 167 to grants, 219 to grants and training, and 357 to the control group. The sample sizes were based on power calculations after taking into account implementation budget limitations. A local microfinance organization, PRIDE Microfinance, provided the loans. Unknown to the participants, the loans were guaranteed by the ILO as the sample came from all businesses that expressed interest in a loan. These businesses may not have fit the lending requirements of PRIDE, and so a guarantee was decided upon to mitigate risk. PRIDE normally provides loans with an interest rate of 26% and requires 100% collateral. Lenders reduced the interest rate to 20% and described the program as a special promotion to individuals. For those who were not able to provide 100% collateral, PRIDE agreed to accept 50% collateral instead. This special promotion was designed to encourage participation in the loan program and to reflect what a subsidized loan program might be like if conducted in the future. Individuals were then required to repay the loan in monthly installments, starting in the first month. The ILO delivered the cash grants through PRIDE bank accounts. The ILO then contacted individuals to attend information meetings explaining how the cash grant program would work. They were then asked to open a free savings account, where the money would be deposited. The ILO conducted the trainings using the Start and Improve Your Business (SIYB) training modules. This training program reached 4.5 million people in 100 countries from 2003 to 2010. Researchers have evaluated the trainings experimentally twice before. First, Mano et al 2012 looked at the effect of giving training to 53 business owners. In keeping with other training results, they found survival rates increased, as did the incidence of good business practices such as keeping budgets, with no consistent effects on business profit. de Mel et al (2008) also use the SIYB training on female business training and cash grants in Sri Lanka. They found no effect on profits for those already in business for training, but some initial effect for the grants that disappears after the second year. There is also increased entry for those without business and some income growth. The trainings have thus been evaluated previously and have presented mixed results. It was decided not to pursue a pure training treatment arm, but instead use trainings as a potential augmenting effect on the use of cash grants and loans to test if training can increase the effects of decreasing capital constraints through better business management practices or attitudes.
Randomization Method
Randomization was done in an office by a computer in Stata.
Randomization Unit
Randomization was done at the individual level, stratified by region.
Was the treatment clustered?
No
Experiment Characteristics
Sample size: planned number of clusters
1550 business owners.
Sample size: planned number of observations
7750
Sample size (or number of clusters) by treatment arms
Individuals have been randomly selected and split into five different groups. 406 were assigned to the loans intervention, 401 to the loans and training, 167 to grants, 219 to grants and training, and 357 to the control group. The sample sizes were based on power calculations after taking into account implementation budget limitations.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials

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IRB
INSTITUTIONAL REVIEW BOARDS (IRBs)
IRB Name
INNOVATIONS FOR POVERTY ACTION IRB – USA
IRB Approval Date
2011-11-27
IRB Approval Number
11November-002
Post-Trial
Post Trial Information
Study Withdrawal
Intervention
Is the intervention completed?
No
Is data collection complete?
Data Publication
Data Publication
Is public data available?
No
Program Files
Program Files