Improving financial literacy and participation of female entrepreneurs in Chile

The study makes two different implementations to be evaluated in the business and finance courses given by Simon de Cirene Corporation. First, a role model, who graduated from the program in a previous version, assist in class 3 or 4 to tell about his successfull experience and the benefits of making use of the tools and knowledge adquired.
Additionally, there are different modalities of technical assitance give. One third of the students receive group technical assistance in class, other third individual technical assitance in class and the last third receives individual technical assistance in the business location. This component is given during the last classes by a teacher assitant.
A double randomized assignment methid is used to distribute the different components of the program. The purpose of this double randomized assignment is to guarantee the comparability of the participants who receive the role model with the ones who do not on one side, and between the ones who receive each kind of technical assistance.

2013-03-01

2014-03-01

The data collection of this experiment included the application of three instruments in different moments in time. Together with the application form, a short survey on analytic abilities and financial knowledge was applied (this is referred to as LB0). This survey includes four mathematic questions to capture the analytic abilities of the participant before de training and an additional question that measures the level of financial alphabetization. In class number four, before de role model session or the assistance checking beginning, a second baseline survey was applied (LB1). The objective was to characterize the households in terms of their economic situation, labor supply, entrepreneurship, access to credit and banking and adoption of financial and management techniques. Finally, once the training was concluded, a follow-up survey was applied (SEG0) to obtain information, right after the ending of the course, about the participants in terms of socioeconomic condition of their households, business situation, access to credit and banking, adoption of financial and management techniques, evaluation of the technical assistance received and evaluation of the role model if applicable. This survey was collected in three different instances. Most of it on the last class, though some participants could not assist so they were surveyed during the graduation ceremonies. Finally, those who did not attend any of the two, were surveyed by telephone calls.

Targeted population: micro-entrepreneurs participating in Simon de Cirene´s program, applying through Minucipalities
Data collection:
Base Line 0 (LB0): analytic abilities and financial knowledge survey (5 questions)
Base Line 1 (LB1): household characterization, economic variables, labor supply, entrepreneurship, access to credit and banking and adoption of financial and management techniques
Follow-up 0 (SEG 0): same as LB1, and evaluation of technical assistance and role model.
Follow up 1 (SEG 1): same as LB1, and business status

Lottery by computer system.

Stratified according to their cohort, county and region.

The assignment of role model is in the class group level.
The technical assistance is delivered at individual or group level within each class group.

Yes

The Role Model treatment stratified the courses according to their county and region.
The technical assistance treatment stratifyied the participants acording to their possession of an actual business and provision of an informed consent.

Role Model: 66 courses 1,705 participants. Technical Assistance: 53 courses 1,371 participants.

32 courses with Role Model, 34 courses without Role Model

Role Model: assuming a 80% power, an ICC of 0,05, attrition rate of 10%, a compliance rate with the treatment assigned of 95% and a correlation between base line and follow-up of 0,5 , the power estimations reveal that the available sample allows us to detect with enough statistic confidence a minimum detectable effect (MDE) of 0,267 standard deviations. Technical assistance: assuming a power of 80%, an ICC of 0,05; attrition rate of 10% and a compliance rate with the treatment assigned of 90%, the power estimations reveal that the available sample allows us to detect with enough statistic confidence a minimum detectable effect (MDE) of 0,206 standard deviations.

We implemented a randomized experiment in Chile with micro-entrepreneurs participating in a training program. Some groups received the visit of a successful ex-student as a role model; students also received personalized versus group “consulting sessions”. Both interventions increase household income one year after, mostly through increased business participation and business income, with role models being particularly cost-effective. Role models did not improve knowledge or use of business practices but rather increased motivation and worked best when similar to the participant. The two interventions benefited different micro-entrepreneurs: role models helped those with less experience while consulting benefited experienced and ed-ucated entrepreneurs.

February 2017

https://sites.google.com/site/jeannelafortune/papers/Draft-final-Jan2017%20v2.pdf