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Impact of credit relief and business training on performance of small businesses.
Last registered on November 20, 2020

Pre-Trial

Trial Information
General Information
Title
Impact of credit relief and business training on performance of small businesses.
RCT ID
AEARCTR-0006794
Initial registration date
November 20, 2020
Last updated
November 20, 2020 12:35 PM EST
Location(s)

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Primary Investigator
Affiliation
UC Berkeley
Other Primary Investigator(s)
PI Affiliation
UT Austin
PI Affiliation
UC Berkeley
Additional Trial Information
Status
On going
Start date
2020-11-20
End date
2021-11-19
Secondary IDs
Abstract
In this study, we estimate the impact of financial assistance (in the form of credit relief, and direct cash transfers) in combination with business training on the performance of small entrepreneurs during the COVID-19 pandemic. We establish the causal impact of financial assistance, training, and their interaction using the combination of randomization and natural-experimentation via discontinuities in the formulas determining the size of the financial assistance.
External Link(s)
Registration Citation
Citation
Fuchs, William , Ganesh Iyer and Przemyslaw Jeziorski. 2020. "Impact of credit relief and business training on performance of small businesses.." AEA RCT Registry. November 20. https://doi.org/10.1257/rct.6794-1.0.
Sponsors & Partners

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Experimental Details
Interventions
Intervention(s)
We employ a 2x2 design via a large-scale randomized experiment. A random subset of entrepreneurs are assigned to the _immidiate_ financial assistance arm, and another subset into _delayed_ financial assistance.
Entrepreneurs in debt would receive debt forgiveness up to 50%, while entrepreneurs with no debt would receive comparable cash transfers.
Similarly, a random subset would receive _immidiate_ SMS business training, while another subset would receive delayed training.
We measure the indicators of financial performance, employment, expectations about the future, and wholesale ordering.

We employ 5 arms determined by randomization:
Training Later,Credit Never
Training Later,Credit Now
Training Now,Credit Later
Training Now,Credit Never
Training Now,Credit Now
"Later" arms have delayed intervention for 30 days. "Credit Never" arms are not eligible for credit relief, because their credit line was permanently closed by the bank.
Intervention Start Date
2020-11-20
Intervention End Date
2021-01-02
Primary Outcomes
Primary Outcomes (end points)
Company profits, employment, survival, expectations about future, prices, wholesale orders, adoption of business practices,
credit utilization, investment
Primary Outcomes (explanation)
Secondary Outcomes
Secondary Outcomes (end points)
Secondary Outcomes (explanation)
Experimental Design
Experimental Design
We employ 5 arms determined by randomization:
Training Later, Credit Never
Training Later, Credit Now
Training Now, Credit Later
Training Now, Credit Never
Training Now, Credit Now
"Later" arms have delayed intervention for 30 days. "Credit Never" arms are not eligible for credit relief, because their credit line was permanently closed by the bank.
Experimental Design Details
Not available
Randomization Method
Randomization on the office computer stratified by wholesale distributor, size of the store, credit limit, and other financial indicators.
Randomization Unit
Individual firms
Was the treatment clustered?
No
Experiment Characteristics
Sample size: planned number of clusters
12786
Sample size: planned number of observations
12786
Sample size (or number of clusters) by treatment arms
Name Count Frequency
Training Later,Credit Never 2715 0.212342
Training Later,Credit Now 2207 0.172611
Training Now,Credit Later 2942 0.230095
Training Now,Credit Never 2715 0.212342
Training Now,Credit Now 2207 0.172611

Approximately 200 firms were indicated to drop from the sample due to a mismatch in the phone numbers in the banking system.
Most of the dropped firms are in the credit never arms.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB
INSTITUTIONAL REVIEW BOARDS (IRBs)
IRB Name
UC Berkeley CPHS
IRB Approval Date
2018-07-23
IRB Approval Number
2018-04-11050