Teaching Entrepreneurship: Impact of Business Training on Microfinance Clients and Institutions

Dean Karlan and Martín Valdivia

The Review of Economics and Statistics, 2011, vol. 93, issue 2, 510-527

Abstract: Most academic and development policy discussions about microentrepreneurs focus on credit constraints and assume that subject to those constraints, the entrepreneurs manage their business optimally. Yet the self-employed poor rarely have any formal training in business skills. A growing number of microfinance organizations are attempting to build the human capital of microentrepreneurs in order to improve the livelihood of their clients and help further their mission of poverty alleviation. Using a randomized control trial, we measure the marginal impact of adding business training to a Peruvian group lending program for female microentrepreneurs. Treatment groups received thirty- to sixty-minute entrepreneurship training sessions during their normal weekly or monthly banking meeting over a period of one to two years. Control groups remained as they were before, meeting at the same frequency but solely for making loan and savings payments. We find little or no evidence of changes in key outcomes such as business revenue, profits, or employment. We nevertheless observed business knowledge improvements and increased client retention rates for the microfinance institution. © 2011 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Date: 2011
References: Add references at CitEc
Citations: View citations in EconPapers (361)

Downloads: (external link)
http://www.mitpressjournals.org/doi/pdf/10.1162/REST_a_00074 link to full text (application/pdf)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Teaching Entrepreneurship: Impact of Business Training on Microfinance Clients and Institutions (2007)
Working Paper: Teaching Entrepreneurship: Impact of Business Training on Microfinance Clients and Institutions (2006)
Working Paper: Teaching Entrepreneurship: Impact of Business Training on Microfinance Clients and Institutions (2006)
Working Paper: Teaching entrepreneurship: Impact of business training on microfinance clients and institutions (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:tpr:restat:v:93:y:2011:i:2:p:510-527

Ordering information: This journal article can be ordered from
https://mitpressjour ... rnal/?issn=0034-6535

Access Statistics for this article

The Review of Economics and Statistics is currently edited by Pierre Azoulay, Olivier Coibion, Will Dobbie, Raymond Fisman, Benjamin R. Handel, Brian A. Jacob, Kareen Rozen, Xiaoxia Shi, Tavneet Suri and Yi Xu

More articles in The Review of Economics and Statistics from MIT Press
Bibliographic data for series maintained by The MIT Press ().