Impact of a Partial Portfolio Credit Guarantee for Women-Owned Firms on Credit Supply and Access to Credit in Burkina Faso

Last registered on September 14, 2021

Pre-Trial

General Information

Title

RCT ID

AEARCTR-0008224

Initial registration date

September 13, 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

September 14, 2021, 4:11 PM EDT

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

Locations

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Primary Investigator

Name

Andrew Brudevold-Newman

Affiliation

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Other Primary Investigator(s)

PI Name

Diego Ubfal

PI Affiliation

World Bank

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Additional Trial Information

Status

In development

Start date

2021-08-16

End date

2026-09-15

Keywords

Finance & Microfinance, Firms & Productivity, Gender

Additional Keywords

JEL code(s)

O12, O17

Secondary IDs

Prior work

This trial does not extend or rely on any prior RCTs.

Abstract

Differential access to credit is one of the key drivers of the large and persistent profit gap between women- and men-owned firms. Credit guarantee schemes are a common and promising policy tool to increase credit to targeted sectors but their impact on financial institution lending and firm access to credit remains understudied, particularly in Sub-Saharan Africa. This study will evaluate the impact of a partial portfolio credit guarantee for women-owned firms on credit supply and access to credit in Burkina Faso. Our evaluation will randomly assign independent financial institutions operating under a common credit federation into either a treatment group whose eligible targeted-sector loans will be covered by the guarantee or to a control group whose eligible targeted-sector loans will not be covered by the guarantee. We will measure the impact of access to the guarantee using administrative credit union data by comparing the loan portfolio and lending decisions of the treatment credit unions to the control credit unions. We will supplement our credit union-level analysis with a panel survey of women-owned firms operating in the catchment areas of the credit unions to measure the impact of the program on firm-level outcomes including access to credit, profits, and innovation.

External Link(s)

Registration Citation

Citation

Brudevold-Newman, Andrew and Diego Ubfal. 2021. "Impact of a Partial Portfolio Credit Guarantee for Women-Owned Firms on Credit Supply and Access to Credit in Burkina Faso ." AEA RCT Registry. September 14. https://doi.org/10.1257/rct.8224

Sponsors & Partners

Experimental Details

Interventions

Intervention(s)

The intervention to be evaluated is a partial portfolio credit guarantee of financial institution (FIs) lending to three specific segments---SMEs, women entrepreneurs, and farmers. The partial guarantee applies to all eligible loans in each of the segments within the FI’s portfolio. Under the scheme, the government will provide 50 percent of the regulator-required collateral for all bank loans to SMEs, and 70 percent for all loans to women entrepreneurs and farmers.

Intervention Start Date

2021-09-15

Intervention End Date

2024-10-31

Primary Outcomes

Primary Outcomes (end points)

This evaluation will measure the impact of the PPCG on lending to the targeted sectors and subsequent down-stream firm performance. Specifically, on the financial institution side, we will measure the impact of credit union access to the PPCG on the volume, quantity, and quality of lending to the targeted sectors. On the firm side, we will measure the impact of the guarantee on access to credit and firm performance including surivival, profits, revenues, investments and innovation.

Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)

Secondary Outcomes (explanation)

Experimental Design

Our experimental design will randomly assign 11 of 21 quasi-independent credit unions to receive full access to the partial portfolio credit guarantee, with the remaining 10 serving as a control group. All loans made to targeted-sector eligible applicants from the treatment credit unions will be covered by the credit guarantee. There are three targeted sectors: agricultural, women-owned MSMEs and men-owned MSMEs. The control group credit unions will receive access to the guarantee for only the agricultural sector, while the treatment group credit unions will receive access to the guarantee for all three sectos.

Our firm-level analysis relies on a cluster-randomized controlled trial approach, comparing targeted-sector firms near the treatment credit unions to targeted-sector firms near the control credit unions. Through a firm census, we plan to enroll 50 firms, stratified by guarantee-eligibility, in the catchment area of each of the credit unions.

Experimental Design Details

Not available

Randomization Method

Randomization done in office on a computer.

Randomization Unit

Credit unions were matched on pre-program lending characteristics and randomized within pairs.

Was the treatment clustered?

Yes

Experiment Characteristics

Sample size: planned number of clusters

21 credit unions.

Sample size: planned number of observations

1050 guarantee-eligible women-owned firms

Sample size (or number of clusters) by treatment arms

550 firms near the the 11 treatment financial institutions and 500 firms near the 10 control financial institutions.

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

Supporting Documents and Materials

IRB

Institutional Review Boards (IRBs)

IRB Name

Health Media Lab

IRB Approval Date

2020-09-02

IRB Approval Number

765WBG20

Analysis Plan