Impact of COVID-19 Stimulus Packages on Small and Medium Enterprises (SMEs) in Colombia

Last registered on September 10, 2021

Pre-Trial

Trial Information

General Information

Title
Impact of COVID-19 Stimulus Packages on Small and Medium Enterprises (SMEs) in Colombia
RCT ID
AEARCTR-0007936
Initial registration date
July 08, 2021
Last updated
September 10, 2021, 7:01 PM EDT

Locations

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Primary Investigator

Affiliation
Northwestern University

Other Primary Investigator(s)

PI Affiliation
Northwestern University
PI Affiliation
University of California, Berkeley
PI Affiliation
Universidad de Chile
PI Affiliation
Inter-American Development Bank
PI Affiliation
Universidad de Chile

Additional Trial Information

Status
On going
Start date
2021-05-17
End date
2022-05-31
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
The economic recovery from the COVID-19 crisis in Latin America hinges on the survival of SMEs, which employ a large fraction of the region’s workforce. Governments are responding with large economic stimulus packages, including liquidity or methods to prop up demand for SMEs. We are evaluating the impact of randomly offering loans to SMEs within the framework of the Colombian Government COVID-19 support program. The researchers hope to understand what might be preventing firms from taking up these services and to quantify the impact of pandemic-specific protections and relief on firm profits, survival, and employment.
External Link(s)

Registration Citation

Citation
Gertler, Paul et al. 2021. "Impact of COVID-19 Stimulus Packages on Small and Medium Enterprises (SMEs) in Colombia." AEA RCT Registry. September 10. https://doi.org/10.1257/rct.7936-2.1
Sponsors & Partners

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Experimental Details

Interventions

Intervention(s)
A Colombian bank randomly offers credits to SMEs. Credits are supported by the COVID-19 stimulus package designed by the Colombian Government.
Intervention Start Date
2021-05-17
Intervention End Date
2021-11-30

Primary Outcomes

Primary Outcomes (end points)
Our primary outcomes are firm survival and sales. We will measure these outcomes using Administrative data from the bank for each client’s activity before and after receiving the credit intervention (e.g. card transactions, deposits, payroll, and loan applications and approvals).
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
The study is conducted in multiple rounds.

We will be working with potential and actual SME clients of a Colombian bank. We have conducted two rounds of intervention, in efforts to increase the study sample.

First round of intervention (May 17-August 13, 2021):

Firms are divided in the following four eligible groups, with 1,004 firms total:

i. Type 1: Clients from a previous credit campaign that received loans but may need loans again now.
ii. Type 2: Clients from a previous credit campaign who were not interested in loans then but may need loans now.
iii. Type 3: Firms which are at the credit score margin and thus were not considered for contact in any previous credit campaign.
iv. Type 4: Firms that are above the credit score margin, but have not been contacted in any previous credit campaign.

These firm types are used as a stratification variable in the randomization procedure. To avoid a sparse strata, we merge together Group 2 and Group 4, thus leaving us with 3 strata for this variable.

We also stratify by the number of months where clients made at least one deposit in 2020 (12 strata). Clients that did not make at least one deposit in 2020 were excluded from the experiment.

There are 59 SMEs that made their first deposits in 2021. For these clients, we only starify by the firm type, as we have no available transaction data to randomize in a similar fashion to firms who were clients since 2020 or earlier.

Second round of intervention (September 13-November 30, 2021):

To increase the sample of the first round of intervention, we have added an additional 2,424 SME firms to the experiment. These firms made at least one deposit between January and August 2020 (no updated data was available before the second intervention round launched). These firms were stratified into the client type as defined above:

i. Type 1: Clients from a previous credit campaign that received loans but may need loans again now.
ii. Type 2: Clients from a previous credit campaign who were not interested in loans then but may need loans now.
iii. Type 3: Firms which are at the credit score margin and thus were not considered for contact in any previous credit campaign.
iv. Type 4: Firms that are above the credit score margin, but have not been contacted in any previous credit campaign.

As in the case of the first intervention round, we merge together Group 2 and Group 4, thus leaving us with 3 strata for this variable. Since the transaction data was incomplete for this new additional SME sample, we only stratified on firm type.

For the firms that are randomized into the treatment group, these will be offered the credit product by the bank via phone call, at which point they can express interest in receiving the loan. After a bank evaluation, these loans are approved and disbursed to the client. We will then receive administrative bank data for these clients to evaluate the outcomes of interest in the short and medium term.
Experimental Design Details
Not available
Randomization Method
Randomization is done in a computer using Python software.
Randomization Unit
Firm
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
N/A
Sample size: planned number of observations
3,428 firms, we are working with our partner to expand the sample size as additional funds for guaranteed loans are made available.
Sample size (or number of clusters) by treatment arms
2,424 treatment firms, 1,004 control firms
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB

Institutional Review Boards (IRBs)

IRB Name
Office for the Protection of Human Subjects, UC Berkeley
IRB Approval Date
2021-03-18
IRB Approval Number
CPHS Protocol # 2021-03-14127
IRB Name
Northwestern University IRB
IRB Approval Date
2021-03-31
IRB Approval Number
STU00213968