Housing Microfinance and Climate Resilience in the Philippines

The interventions are a new pilot loan product that features increased loan amount and loan tenure, and high-touch consumer education on building resilient houses.

The interventions to be evaluated are:

1. (i) ASA Philippines’ existing housing loan product, (ii) ASA Philippines’ new housing microfinance product designed to increase climate resilience of borrowers’ households. The product features an increased loan amount and loan term relative to the standard ASA housing loan. The modified loan terms intend to allow families more flexibility to borrow for home improvements based on their needs.
(i) The existing housing loan product has a fixed 12 month loan term, offers up to 50,000 Philipino pesos (PHP) loan size (just under 1000 USD), requires clients to already have an ASA productive microfinance loan.
(ii) The new housing loan product can have a 12 to 48 month loan term (decided jointly by the client, their loan officer, and ASA), offers up to 300,000 PHP loan size (just under 6000 USD), and does not require clients to already have an ASA productive microfinance loan.

2. high-touch consumer education on building resilient houses, designed by ASA in partnership with Habitat for Humanity. The education component trains beneficiaries on materials selection, effective budgeting, and construction basic dos and don’ts. It will be delivered by the loan officer, to the client, and any other close family members involved in the construction project. The focus of the education is on high-touch support once the client decides to take up a loan, rather than generalized training for all clients pre-loan. So it will be timely, adaptive, and customized to the client's own situation.

3. Socialization of the loan products and/or the education component. Each of the 4 treatment arms will receive socialization about the interventions they are receiving (new/old loan products, education). This includes the (old loan, no education) group, which will still receive socialization of the old loan product, which is what distinguishes it from the pure control group, which still has access to the old loan product, but does not receive any new socialization or prompting.

These interventions will be offered to existing ASA clients, all of whom are female micro-entrepreneurs already receiving productive loans from ASA, depending on which treatment arm they are in.

2022-05-16

2022-12-31

There are four areas of primary outcomes: (1) loan usage, (2) climate resilience of dwelling, (3) climate resilience of households, and (4) economic outcomes such income, expenditure and savings.

We will run a 2x2 randomized evaluation that cross-randomizes the education component (versus no education) and the new loan terms (versus being offered the old loan terms), against a control group.

We will work with 12 selected ASA branches (each serves over 1,000 clients), as our partners pilot test the interventions prior to scale-up across all branches. Randomization will be at client group level, stratified by loan officer. We will randomize 720 client groups and randomly divide them into four treatment arms, stratified by branch and loan officer:
Control (0): no product is marketed
Treatment (1): market new loan with education
Treatment (2): market new loan without education
Treatment (3): market old loan with education
Treatment (4): market old loan without education

To measure outcomes, we will
1. Obtain administrative data on loan outcomes.
2. Conduct a brief, written mini-survey offered to all clients in the study branches. This will focus on core climate risk and resilience outcomes, and also be used to quantify the correlates of loan demand.
3. Conduct one end line phone survey. We will survey a maximum of 1,000 housing loan takers on a rolling basis, at least 3 months after loan disbursement. We will proportionally survey a random sample of non-loan takers and those in the control group, also on a rolling basis. For example, if there are 100 loan takers during the first month, we will survey these 100 loan takers, and a random selection of 50 non-loan takers and 50 people from the control group. If a surveyed non-loan taker becomes a loan taker in a later month, we will survey one additional non-loan taker as replacement.

Randomization will be done by computer using Stata.

Randomization will be at the microfinance client-group level (720), stratified by loan officer (70).

Yes

720 microfinance client groups, across 12 MFI branches and 70 loan officers.

On average each client group has about 25 clients, so the eligible population has about (720 client groups) x (25 clients) = 18,000 clients. We will obtain administrative data on all of these clients, and mini-survey data on all who agree to respond. We plan to survey 2000 of these ASA clients, through a phone survey: -1000 loan takers across treatment arms, where loan takers are successively surveyed as they take up the loans, at least 3 months after they first take up the loan. Once any treatment arm reaches 250 surveyed, we will stop surveying loan takers from that arm. -500 randomly-selected non-loan takers across treatment groups, evenly selected at 125 per group. These will be surveyed so the survey timing balances with the loan taker group. Since a non-loan taker could later become a loan taker, we will randomly replace any respondents who later attrit from this group by taking up a loan. -500 randomly selected clients in the pure control group. These will be surveyed so the survey timing balances with the loan taker group.

Each treatment arm, and the control, have 144 clients groups.

This leads to the following number of observations per treatment arm:
Administrative data and mini-survey: up to (144 client groups) x (about 25 per group) = 3,600 per arm.
Phone survey:
-Treatment arms: up to 250 loan takers + up to 125 non-loan takers = up to 375
-Control arm: 500