Evaluating business training for microfinance clients

Principal Researchers: Profs. Rohini Pande and Erica Field (Harvard), and Seema Jayachandran (Stanford)
Partner Organization: SEWA Bank, Gujarat

This study examines the impact of a short training course on business and financial skills for self-employed women in Ahmedebad. The intervention is based on currently-used training courses that SEWA Bank offers to its clients. Each two-day class has about 10-12 participants, drawn from SEWA’s members who own a small business (e.g., vegetable vendors, tailors, store owners, etc.) or are engaged in home-based piece work (e.g., embroidery, rolling bidis, etc.). The first day of class covers basic concepts such as keeping track of business income, expenses and options. On the second day, each woman identifies a long-term business goal (e.g., buying a sewing machine, new equipment, learning new skills) and, through group activities, develops a short-term plan to reach that goal. SEWA Bank has found that its training has helped participants, not only because it transfers skills to them, but because it is enabling them to realize that they can run a business and are capable of having a longer-term view.

This evaluation study will test these ideas by collecting survey data six months to one year after the training to measure profits, business investments, and other outcomes, while comparing a treatment and control group. In addition, a main focus of the study is to measure the differential effect when women are trained along with friends and neighbors. For a randomly selected subset of the treated group, their close peers will also be invited. The hypothesis is that there is a social dimension to learning: women might be more (or less) engaged during the training if they are with a friend. Also they might be more likely to implement the skills afterwards and change aspects of their business. This is perhaps because they have a friend with whom they can discuss the training and consolidate what they have learned. Also announcing a goal in front of a friend might act as a commitment device.

CMF Research Associate: Divya Varma and Ami Bhavsar

See some related CMF documents:
# Project description document [pdf, 98KB]
# The Impact of Business Training on Small Business Outcomes (Eye on Microfinance, Issue 5)