Village Enterprise Development Impact Bond Study

Last registered on March 16, 2021

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Pre-Trial

Trial Information

General Information

Title

Village Enterprise Development Impact Bond Study

RCT ID

AEARCTR-0007168

Initial registration date

March 15, 2021

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

March 16, 2021, 6:35 AM EDT

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

Locations

Country

Kenya

Region

Country

Uganda

Region

Primary Investigator

Name

Christy Lazicky

Affiliation

IDinsight

Contact Primary Investigator

Other Primary Investigator(s)

PI Name

Sarah Carson

PI Affiliation

IDinsight

Contact Investigator

PI Name

Cassandre Pignon

PI Affiliation

IDinsight

Contact Investigator

PI Name

Maureen Strickel

PI Affiliation

IDinsight

Contact Investigator

PI Name

Nisha Hariharan

PI Affiliation

IDinsight

Contact Investigator

PI Name

Jeffery McManus

PI Affiliation

IDinsight

Contact Investigator

Additional Trial Information

Status

On going

Start date

2018-01-01

End date

2021-08-31

Keywords

Other

Additional Keywords

Social protection

JEL code(s)

Secondary IDs

Abstract

Despite decades of development work and billions of dollars expended, over 700 million people still live in extreme poverty. Village Enterprise (VE) offers a household graduation program that lasts for approximately one year per cohort, and provides groups of target size three entrepreneurs with cash transfers as seed capital, training, ongoing mentoring by a local business mentor, and support for formation of Savings Groups. The goal is for these households to start sustainable businesses, grow their income and elevate their households out of poverty. VE, IDinsight, Instiglio, USAID, and FCDO are partnering together on the VE Development Impact Bond (DIB), the first DIB for poverty alleviation in Sub-Saharan Africa, to serve over 12,000 households in Western Kenya and Eastern Uganda, over the course of seven cohorts. As the DIB evaluator, IDinsight is conducting a clustered randomized control trial (RCT) to independently measure the impact of Village Enterprise’s program on increases in consumption and net assets (as a proxy for income). This is a cluster-level RCT with randomization at the village level and the unit of analysis at the household level. The estimated program impact will be measured through a comparison of the treatment group that was offered to participate in the VE program, relative to the control group, which was not offered to participate in the VE program. The effects measured by the evaluation will determine the payments that are made from the DIB to VE for the achieved results.

External Link(s)

IDinsight project page

Registration Citation

Citation

Carson, Sarah et al. 2021. "Village Enterprise Development Impact Bond Study." AEA RCT Registry. March 16. https://doi.org/10.1257/rct.7168-1.0

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Experimental Details

Interventions

Intervention(s)

VE is a non-profit that administers a micro-enterprise graduation program in east Africa. The goal of the VE graduation program is to lift the poorest east Africans out of extreme poverty. VE’s program runs similar to an ultra-poor graduation model, as it targets the poorest members of the communities they operate in, and provides them with an integrated package of cash transfers and training. The program places a large emphasis on business skills and microenterprise development. This is important as experience shows that the extreme poor lack business skills and financial literacy, as well as access to capital, financial institutions, and markets, which limits their opportunities for generating enough income to break out of poverty. The intervention is multidimensional including three-four months of business skills and financial literacy training, access to business savings groups, seed funding for businesses, and mentoring. VE’s unique graduation approach is aimed at helping entrepreneurs launch and run a business, increase household income and savings, and improve standards of living, helping to break the cycle of poverty.

Intervention Start Date

2018-01-01

Intervention End Date

2020-12-31

Primary Outcomes

Primary Outcomes (end points)

Household consumption and net asset ownership

Primary Outcomes (explanation)

Household monthly consumption includes the sum of :
1. Total food, beverage, and temptation goods expenditure over the preceding seven days including food prepared at home, purchased outside, and given in-kind
2. Total recurrent expenditure, such as fuel and transportation expenditures, utilities, personal hygiene and health over the preceding four weeks
3. Total infrequent expenditure on larger social and religious activities (wedding, funeral etc.), clothing, taxes, housing maintenance, migrations, travel and educational costs and fees over the last 12 months.

Consumption measured over different recall periods will be converted to monthly amounts. Note, the sum of these components will be approximated through a subset consumption module approach.

Household net asset ownership includes the sum of:
1. Total durable assets
2. Total home improvements
3. Total productive assets
4. Total household savings, including savings generated through the VE business savings groups
5. Total business assets, accounting for business ownership by the household
6. Total household and share of business liabilities (subtracted from 1 – 5 above to arrive at total net ownership).

Secondary Outcomes

Secondary Outcomes (end points)

Secondary Outcomes (explanation)

Experimental Design

IDinsight will estimate the impact of the VE program via a cluster randomized control trial (RCT) conducted in Trans Nzoia and Bugoma counties of Kenya and Soroti, Amuria, and Dokolo districts of Uganda. The estimated program impact will be measured through a comparison of the treatment group, that were offered to participate in the VE program, relative to the control group, which were not offered to participate in the VE program.

The evaluation will include 10,122 households across 241 treatment villages and 241 control villages. Treatment was randomized at the village level. IDinsight did not conduct a baseline but rather leveraged Village Enterprise's program targeting data to randomize villages into treatment. Household consumption and net asset ownership will be measured during the endline data collection planned for April 2021. As the intervention was staggered across program cohorts and the endline will pool results across all cohorts, our preferred estimate will calculate a weighted average effect across households that graduated from the program between 0.5-2.5 years ago. IDinsight will randomly select 21 households from the list of households offered the program from each village to collect information on consumption and assets.

Experimental Design Details

Randomization Method

Randomization was done in office by a computer

Randomization Unit

The intervention was randomized at the village level but stratified by business mentors (Village Enterprise staff that manage the intervention in a given village).

Was the treatment clustered?

Yes

Experiment Characteristics

Sample size: planned number of clusters

The evaluation includes 482 villages (241 treatment villages and 241 control villages).

Sample size: planned number of observations

IDinsight will sample 21 households per village for a total of 10,122 households.

Sample size (or number of clusters) by treatment arms

In both the treatment and control arms, there are 241 villages and 5,061 households.

Minimum detectable effect size for main outcomes (accounting for sample design and clustering)

0.08 SD for household consumption and net asset ownership (assumes 10% significance level, 80% power, and an ICC of 0.09 and correlation between baseline covariates and outcome of 0.243 for consumption estimated using data from the previous RCT conducted on Village Enterprise's program in Uganda).

Supporting Documents and Materials

IRB