Microequity for women led microenterprises - Experimental evidence from India

Working with Buzz Women, an NGO, and Yunus Social Business (YSB), a financing institution, we are running a field experiment that offers microequity contracts in two sectors of particular relevance for rural and peri-rural areas: (i) animal husbandry and (ii) tailoring. By randomizing access to microequity contracts, we will quantify the impact of microequity contracts on business and socioeconomic outcomes by comparing the microenterprises that were offered the contract to those that were not.

2022-07-06

2025-07-15

Firm revenues, expenditure and profit; Repayment data

Daily self-reported data on revenues, expenditure and profit are aggregated on a weekly basis; Repayment data from YSB is collected on a monthly basis

Compliance, work days, household consumption, employment, fixed capital investments, missed reporting

Compliance - Weekly measure of compliance on daily reports;
Work days - Number of days worked per week collected using daily self reported data;
Household consumption - Calculated using 30 day recall from quarterly phone surveys
Employment -Number of workers employed from quarterly phone surveys
Fixed capital investments - For HH or business from quarterly phone surveys
Missed reporting - Difference between self-reported revenue and monitoring revenue

In this study, we have two groups - a treatment group that is offered a microequity contract and a control group that is offered no funding (they have business as usual access to regular loans). We have designed a microequity contract that facilitates the purchase of these assets through a performance-contingent repayment schedule. Monthly repayments under the equity contract will be calculated based on self-reported revenues; these self reports will then be verified using several monitoring technologies. Using daily self reported data, quarterly phone surveys and two in person follow-up surveys we study the impact of these contracts on our key outcomes of interest.

This pre-analysis plan was registered shortly after the loans were disbursed. At the time of writing this pre-analysis plan we were blinded to any post-intervention data.

Not available

Individual level randomization. For entrepreneurs engaged in animal husbandry we randomise with stratification. The sample is stratified based on median revenue in the three months before contract signing. Within tailoring, the sample is very small and therefore, no stratification was done.

Individual

No

28 entrepreneurs

28 entrepreneurs

15 entrepreneurs in the treatment group and 13 entrepreneurs in the control group

For variables where we have daily pre-intervention data, we present power calculations based on simulated data. We have collected over one year of pre-intervention daily data (on revenue, expenditure and profit) for all participants in the study. We use this pre-intervention data to simulate a 50% increase in revenue due to the intervention over a period of three years. Based on simulated post intervention data, we check for power by estimating the primary ANCOVA specification using OLS and clustered poisson and conducting inference by randomization inference. We cluster at the firm level, and re sample according to the underlying stratification scheme. Despite the small sample size, we are powered to detect treatment effects equivalent to a 50\% increase in revenue (which is a reasonable effect size given the large capital injection). For variables collected using the quarterly phone surveys, preliminary power calculations suggest that with full take-up, a sample size of 30 is powered (at 77\%) to detect effect sizes of greater than 0.45sd.