Business Training for Microfinance Clients: How it Matters and for Whom?

Veronica Frisancho, Dean Karlan and Martín Valdivia

Working Papers PMMA from PEP-PMMA

Abstract: We measure the impact of a business training program for female microentrepreneur clients of a group banking program in Peru. Using the credit with education model, we assigned clients randomly to either treatment or control groups. Treatment groups received thirty to sixty minute entrepreneurship training sessions during their normal weekly group banking meeting. These lasted between one to two years. Control groups remained as they were before, meeting weekly with the group banking program solely for making loan and savings payments. We find that intention to treat (ITT) led to higher repayment and client retention rates for the microfinance institution, improved business knowledge, and practices. More importantly, average business sales revenues also increase while revenues fluctuations were reduced. In addition, we find significant heterogeneity in the exposure of clients within the treatment group. Treatment on the treated (TOT) estimates, obtained using ITT as instrumental variable, show substantially larger effects.

Keywords: Microfinance; business training; adult education (search for similar items in EconPapers)
JEL-codes: C93 D12 D13 D21 I21 J24 O12 (search for similar items in EconPapers)
Date: 2008
New Economics Papers: this item is included in nep-ent, nep-mfd and nep-mkt
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:lvl:pmmacr:2008-11

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