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

Last registered on May 23, 2022

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

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
July 09, 2021, 12:46 PM EDT

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

Last updated
May 23, 2022, 3:37 PM EDT

Last updated is the most recent time when changes to the trial's registration were published.

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
2022-12-31
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. 2022. "Impact of COVID-19 Stimulus Packages on Small and Medium Enterprises (SMEs) in Colombia." AEA RCT Registry. May 23. https://doi.org/10.1257/rct.7936
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
2021-12-13

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 and microentrepreneur clients of a Colombian bank. To date, we have conducted three 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 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 stratify 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.

Third intervention round with microentrepreneurs

In parallel with the SMEs added to the second intervention round for the experiment, we planned to launch an additional intervention round with 19,615 self-employed microentrepreneur clients of Davivienda. However, a rule change at the Colombian National Guarantee Fund (Fondo Nacional de Garantías), the government institution which provides the loan backing that is part of our experiment's intervention, now required a handwritten certification of income from loan applicants. This made compliance by Davivienda's microentrepreneur team impossible, because they offer loans 100% digitally through the bank’s mobile app, have little to no physical contact with the clients, and thus cannot obtain this handwritten certification. As a result, none of the microentrepreneur clients that we had randomized into treatment have been pre-approved for loan guarantees from the government, and because of that, this intervention round was discarded.


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
3,379 SMEs
Sample size (or number of clusters) by treatment arms
Total: 2,375 treatment SMEs, 1,004 control SMEs
First intervention round: 472 treatment SMEs, 512 control SMEs
Second intervention round: 1,903 treatment SMEs, 492 control SMEs
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
Analysis Plan

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