Impact of credit relief and business training on performance of small businesses.

Last registered on November 20, 2020

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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

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published

November 20, 2020, 12:35 PM EST

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

Country

Kenya

Region

Primary Investigator

Name

Przemyslaw Jeziorski

Affiliation

UC Berkeley

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Other Primary Investigator(s)

PI Name

William Fuchs

PI Affiliation

UT Austin

Contact Investigator

PI Name

Ganesh Iyer

PI Affiliation

UC Berkeley

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Additional Trial Information

Status

On going

Start date

2020-11-20

End date

2021-11-19

Keywords

Finance & Microfinance, Firms & Productivity

Additional Keywords

credit relief, business training, sms training, randomized control trial

JEL code(s)

G32, O16

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

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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

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

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?

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)

Supporting Documents and Materials

IRB