Viewing all posts with tag: Training  

Grants Double Income but not Empowerment for Ultra-poor in Uganda

A new paper by Chris Blattman (Columbia) and co-authors provides optimistic new evidence on the returns to providing cash grants to impoverished women in northern Uganda.  The new experiment varied whether the ultra-poor, largely women, were offered a business grant worth $150, training and supervision, and found dramatic impacts of the cash grant on entrepreneurship, hours worked, individual earnings, and household consumption.

The paper stands out from previous studies in that it finds strong positive impacts for women, and that it does so among the most impoverished people in the village.  Only those people identified by a local nonprofit as the poorest fifteen people in each village (86 percent of whom were women) were eligible for the study.  Previous studies of cash and in-kind small enterprise grants delivered to women in Sri Lanka and in Ghana find more mixed effects.  Grants to female-owned microenterprises had, on average, no impact in Sri Lanka, and in Ghana, only in-kind grants or grants made to initially more profitable female microenterprises appeared to benefit recipients . . . 

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The Elusive Benefits of Training

Whether it is education generally or domain specific skills, it seems obvious that imparting knowledge and skills should be an effective approach for improving outcomes. What’s not so obvious is how to deliver useful knowledge and skills. A few new papers shed some light on two areas of specific interest to us: financial literacy and business training for microentrepreneurs.

A new paper based on a two-year, in-school, financial literacy program for high school students finds increased use of savings over borrowing, increased likelihood of financial planning and spillover of financial knowledge to the students’ parents. There are two important things to note in these findings. First, this is a very intensive program, with training of teachers, significant investment in curriculum materials, and many hours of instruction. Second, the results are self-reported. So the impact noted is not whether, for instance, the students actually saved up for a large purchase rather than borrowing at expensive rates, but whether they report doing so (for fairly obvious reasons of time and expense, it is rarely possible to measure actual behavior in large samples). A cynical interpretation of these results would be that two years of financial literacy training is effective at teaching people how to respond to financial behavior survey questions . . . 

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Women Pay More and Get Less: Experiences from Malawi

Here on the FAI blog we’ve written many posts  on the shortcomings of financial literacy training programs, both in the US and abroad. When I came across a study from the World Bank’s Development Research Group evaluating a vocational training and entrepreneurship program in Malawi, I was prepared to add this to the stack of mounting evidence of training programs that show little to no effect on business development and personal finance and move on. But in this case, the study focuses on the gendered differences of participation in the training course, not just whether or not it was effective at facilitating new business activity.

Like previous research, the Malawi study found no effects on self-employment*, but it did find significant differences in satisfaction and self-esteem between women and men after taking part in the program. The authors (Cho et al.) comment, “these differences are explained by both the conditions under which women participate in training, as well as gender differences in the training experience" . . . 

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What’s Next? Understanding—and Improving—Microenterprise Performance

Hundreds of millions of people in the developing world work in microenterprises. These businesses tend to be very small, often employing only a single operator, and they tend to have difficulty growing. Yet growing evidence suggests that such businesses could increase profits by increasing investment – a number of recent studies find that the marginal return to capital among small firms in developing countries tends to be very high (i.e. de Mel et al. 2008). If returns to capital are high, why don’t microenterprises borrow, invest and grow rapidly?

The obvious answer is that these firms don’t have access to credit. But while credit constraints are likely part of the explanation for the puzzle, accumulating evidence suggests that it’s not just credit that limits investment . . . 

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Role of consumer education and technology in microinsurance

When CARE India field officers delivered emergency relief services to the coastal regions ravaged by the 2004 tsunami, they were struck by the communities’ vulnerability to shocks and lack of access to appropriate risk protection tools, and assessed that microinsurance could be an effective product for these communities. Out of this determination, the CARE Insure Lives and Livelihoods (ILAL) microinsurance program was born. In introducing this new program, CARE set out to improve communities’ risk management capacities by improving their understanding of insurance.

A new case study from FAI takes an in-depth look at the key challenges—such as sustainability and performance measurement of the education programme—and how CARE tried to overcome them . . . 

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Microlending Taking Off in the US?

As banks tighten their lending criteria in response to the financial crisis, would-be entrepreneurs are finding that they can’t get start-up capital from the usual sources, and some small business owners are turning to microlenders like ACCION USA, Grameen America, and home-grown institutions like the Wisconsin Women’s Business Initiative...

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