Finance & PSD Impact MARCH 2017 The Lessons from DECFP Impact Evaluations ISSUE 42 Our latest note highlights the results of an evaluation of the Get-Ahead business training program for female microenterprise owners, showing the potential for training to grow underdeveloped markets. Business Training for Female Microenterprise Owners in Kenya grew their firms without harming their competitors David McKenzie and Susana Puerto Business training is one of the most counties of Kenya. The typical business common support services offered by owner was selling food products from a table governments to small firms around the world. in the market, was 36 years old, and was However, a number of evaluations of such earning approximately $13 per week. training programs have struggled to identify We used a two-stage randomized impacts, and an additional concern has been experiment. First, we allocated markets to that any growth of trained firms might come treatment (93 markets) or control (64 at the expense of their competitors. markets). Then within the treatment market In contrast, supporters of training we randomly selected 1,172 women to invite programs argue that there might be positive to training. benefits to other firms in the economy, if Comparing the women invited to better business practices are like a technology training in the treatment markets to women in that others can observe and copy, or if the control markets enables us to estimate the training encourages collective action. We impact of training. Comparing the women in designed an experiment to measure both the treatment markets who were not invited to direct and spillover impacts of training. training to women in the control markets enables measurement of any spillover The Get-Ahead program impacts of operating in a market where others The ILO’s Gender and Enterprise are trained. Together (Get-Ahead) training program is a We conducted four rounds of follow- 5-day business training program for low- up surveys, two after one year, and two after income female business owners. It has been three years, in order to measure impacts. We used now in at least 21 countries, training were able to interview 95 percent after one over 400,000 women. It aims to teach both year, and 92 percent after three years. traditional business skills such as marketing and accounting, as well as helping women to Results overcome gender-specific barriers to  After three years treated women are business growth (such as dealing with gender earning 15 percent higher profits (about attitudes and separating household and $2.60) than the pure control group, with business tasks), and to network and work no spillover impact on other women in together. their markets (see figure 1). They also are Training cost approximately $250 per 3 percentage points more likely to have woman trained, and was offered for free in had their businesses survive, and have 13 our study. 77.7 percent of those offered percent higher weekly sales. training participated.  This increase in business income is accompanied by improvements in mental Data and Study Design health and subjective well-being. We work with a sample of 3,537 women working in 157 markets in four Do you have a project you want evaluated? DECRG-FP researchers are always looking for opportunities to work with colleagues in the Bank and IFC. If you would like to ask our experts for advice or to collaborate on an evaluation, contact us care of the Impact editor, David McKenzie (dmckenzie@worldbank.org) Figure 1. Profits Increase for the Treated  The treatment impacts are stronger after with No Spillover Impact three years than after one year. Few firms receive finance, and training does not Weekly Profits increase the use of credit. As a result, it 2000 seems firm owners had to slowly build 1800 their inventories by reinvesting profits 1600 over time.  We also tried a mentoring intervention 1400 KSH per week for half of those trained. This was more 1200 1000 800 costly ($553 per woman), and did not 600 have a significantly different impact than Pure Controls Spillover Controls Treated Firms training alone. Notes: 95 percent confidence interval around means shows impact relative to pure control group. Policy Implications Many evaluations of business training  Examining impacts at the level of the programs have struggled to find significant market, rather than individual firm, impacts. A key reason has been that they have shows that the treated markets have 17 used relatively small samples with percent more customers each week, and heterogeneous firms. This lack of statistical 14 percent higher sales. There is no significance has been interpreted by some as change in the rate of new business entry evidence that training seldom works, rather into these markets. than the correct interpretation of a lack of  Treated firms have a 0.05 to 0.07 increase evidence of whether it works or not. The in the proportion of good business treatment impacts here are not larger than practices used. found in prior studies, but are much more  A main mechanism for this market precise, and show that training can have a growth appears to be that training led positive impact. business owners to be more reliable in The impact of $2.60 per week is not their opening hours, and to diversify the transformative, but represents an important range of products they sell. Both factors increase in income for poor women. make the market more attractive for Moreover, importantly this benefit to the customers, and allow overall sales to women trained does not come at the expense grow rather than just reallocating sales of other women operating in their same from one business to another. markets. It appears the training passes a cost- benefit test, since gains would need to last 1.5 “I used to not care much about my years to offset the costs, and we find higher business, I could open late, and profitability and sales are occurring three sometimes the shop would remain closed years after training took place. if I don’t feel like opening. Now I know The results also highlight the role of that it is important to put effort into my policy in building markets in developing business” (Qualitative interview) countries, since many markets are full of poorly managed firms selling a limited variety of products. For further reading see: David McKenzie and Susana Puerto (2017) “Growing Markets through Business Training for Female Entrepreneurs: A Market-Level Randomized Experiment in Kenya.” World Bank Policy Research Working Paper no. 7993. Recent impact notes are available on our website: http://econ.worldbank.org/programs/finance/impact