Impact of psychometric credit scoring as an alternative to collateral for women entrepreneurs in Ethiopia

Last registered on November 28, 2021

Pre-Trial

Trial Information

General Information

Title
Impact of psychometric credit scoring as an alternative to collateral for women entrepreneurs in Ethiopia
RCT ID
AEARCTR-0008608
Initial registration date
November 23, 2021
Last updated
November 28, 2021, 6:04 PM EST

Locations

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Primary Investigator

Affiliation
World Bank

Other Primary Investigator(s)

PI Affiliation
World Bank
PI Affiliation
World Bank
PI Affiliation
World Bank

Additional Trial Information

Status
On going
Start date
2018-04-01
End date
2022-06-30
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
This study partnered with the Ethiopian MFI Wasasa to test the impact of granting relatively large, uncollateralized loans to women business owners after screening via a psychometric loan appraisal technology. Potential borrowers were required to present themselves at the MFI's branches to apply for the loan and take the psychometric test. If a woman passed the test cut-off score, she was deemed eligible for the loan, and was randomised with 50-50 probability into the treatment or control group. All eligible women were subsequently required to provide documentation and pass a business appraisal; then their treatment status was revealed, and women who had been assigned to treatment and who had also met the documentation and business appraisal requirements were granted a loan. We analyse the impact of the loan using baseline data collected at the time a potential borrower presented herself at the branch between April 2018 and March 2020, and endline data from a face-to-face follow-up survey in September 2021. A short midline phone survey was also conducted with part of the sample in May 2020, to assess immediate impacts of COVID.
External Link(s)

Registration Citation

Citation
Alibhai, Salman et al. 2021. "Impact of psychometric credit scoring as an alternative to collateral for women entrepreneurs in Ethiopia." AEA RCT Registry. November 28. https://doi.org/10.1257/rct.8608-1.0
Experimental Details

Interventions

Intervention(s)
Intervention Start Date
2018-04-01
Intervention End Date
2020-08-31

Primary Outcomes

Primary Outcomes (end points)
Credit constraints, firm survival, firm performance (see pre-analysis plan for full list of variables and their construction)
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
This study partnered with the Ethiopian MFI Wasasa to test the impact of granting relatively large, uncollateralized loans to women business owners after screening via a psychometric loan appraisal technology. Potential borrowers were required to present themselves at the MFI's branches to apply for the loan and take the psychometric test. If a woman passed the test cut-off score, she was deemed eligible for the loan, and was randomised with 50-50 probability into the treatment or control group. All eligible women were subsequently required to provide documentation and pass a business appraisal; then their treatment status was revealed, and women who had been assigned to treatment and who had also met the documentation and business appraisal requirements were granted a loan. We analyse the impact of the loan using baseline data collected at the time a potential borrower presented herself at the branch between April 2018 and March 2020, and endline data from a face-to-face follow-up survey in September 2021. A short midline phone survey was also conducted with part of the sample in May 2020, to assess immediate impacts of COVID.
Experimental Design Details
Not available
Randomization Method
In office by a computer
Randomization Unit
Individual
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
124 individuals in IE sample, 357 individuals in total sample (including 124 in IE sample)
Sample size: planned number of observations
124 individuals in IE sample, 357 individuals in total sample (including 124 in IE sample)
Sample size (or number of clusters) by treatment arms
61 treatment group, 63 control group
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB

Institutional Review Boards (IRBs)

IRB Name
HML IRB Research and Ethics
IRB Approval Date
2021-08-31
IRB Approval Number
969TWBG21
Analysis Plan

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