LESSONS & RESULTS TEMPLATE All TTLs must fill out this template upon completion of their UFGE grants. The information provided will be used in annual donor reporting, to identify and publish results stories, and inform knowledge management activities. Grant Title Gender and private sector development in Africa P code and TF number P148415 / TF015903 Task Team Leader & GP Francisco Campos, FCI Country or Region Africa 1. LESSONS LEARNED (max 500 words) Succinctly describe the main knowledge gaps this grant helped fill and key lessons learned that would be of interest to other practitioners or researchers. Use the questions below as reference and please limit your response to maximum three lessons learned. • What worked? • What did not work? • What difficulties or unexpected challenges did you and your team face during implementation and how did you address them? • What can be improved? What would you have done differently? This grant supported impact evaluation activities in various countries in Sub-Saharan Africa to assess the efficacy and cost-effectiveness of interventions aimed at reducing the gender gap in firm-level productivity. Female's participation in entrepreneurial activities is higher in Sub-Saharan Africa than in any other region, but substantial gender gaps remain in productivity. Women are more likely to be involved in smaller, informal firms, and in traditional low value-added sectors. Constraints to women-owned businesses include (i) the contexts in which women operate, including legal discrimination, social norms, and risks of GBV; (ii) their endowments, including differences in education, confidence, assets, networks; and (iii) household-related factors, including allocation of factors of production and time constraints. This grant financed impact evaluations of projects designed to address these disparities and close the gender gap in firm performance. The main lessons from this work included: FACILITATING WOMEN’S ACCESS TO CAPITAL Women entrepreneurs own fewer assets – like land or a house – that can be used as collateral for business loans. This affects women’s ability to obtain medium-sized loans and, in turn, impacts the growth of their enterprises. Women’s ability to finance their business activities is also undermined by the additional pressures they face (relative to men) to spend their income on domestic needs. Policy in Action: Introducing Innovative Psychometric Tests to Ease Women’s Access to Larger Business Loans In Ethiopia, the team partnered with a fintech company to implement an innovative psychometric test that can ease women’s access to larger business loans, as an alternative to traditional collateral. This test predicts the likelihood that an entrepreneur will repay a loan. Customers who scored at a high threshold on the test were seven times more likely to repay their loans compared to lower-performing customers. Policy in Action: Increasing Financial Deepening through a Low-Cost, Simple Tweak in Project Design In a project aimed at encouraging women-owned firms to formalize in Malawi, the team found that when complementing business registration with a simple information session at a bank including the offer of a bank account, their use of formal financial services increases, which in turn helps increase their profits by 20% on average. And this can be done at a cost of only $27 per firm. SUPPORTING WOMEN ENTREPRENEURS TO BUILD THE RIGHT SKILL SETS In Africa, female entrepreneurs have overall completed fewer years of education than male entrepreneurs. Men have on average higher technical and financial literacy, and are more likely to participate in trainings. Differences between women and men in skills likely influence women’s business decisions and contribute to the performance gap. Policy in Action: Increasing Entrepreneurs’ Profits Through Personal Initiative Training Business training programs that aim to teach women basic business skills have struggled to show sustained impacts on business profitability and growth. In Togo, the team compared the effects of two types of training: traditional business training and the personal initiative training, which focuses on developing self-starting, future-oriented, and persistent proactive mindset. The evaluation showed personal initiative training increases women entrepreneurs’ firm profits by 40 percent, compared to a statistically insignificant 5 percent for traditional business training. The training is cost-effective, paying for itself within one year. ENCOURAGING WOMEN TO ENTER MORE PROFITABLE, MALE DOMINATED SECTORS Female entrepreneurs build more profitable companies when they operate in male-dominated sectors. In Uganda, for instance, only 6% of women operate in male-dominated sectors, but these “crossover� firms are just as profitable as those owned by men in those sectors and are larger than female-owned enterprises in traditional sectors. Policy in Action: Providing information and exposure to the high-performing sectors at early stage. The analysis done by the team in Uganda and Ethiopia suggests that providing women information on earnings in traditionally male-dominated sectors and exposing them to those sectors can encourage their participation in those sectors. The studies reveal that women in crossover sectors have similar level of skills or access to capital, but there are differences in information (women are often unaware of the fact that they earn less than in crossover sectors) and psychosocial factors. 2. OPERATIONAL VALUE (max 200 words) If applicable, please highlight what aspect of this work could be replicated and/or scaled by other teams. This could be new or innovative approaches, instruments, or tools: A number of results from the studies financed by this grant are being used not only in Africa but across the World. The personal initiative training evaluated in Togo under this program has been expanded elsewhere including in DRC, Ecuador, Ethiopia, Jamaica, Mauritania, and Mexico, both in World Bank and other partners’ work. The study highlighted in media pieces including The Economist and Jeune Afrique. In Mozambique, the team has adapted the personal initiative training and been implementing an evaluation of the program to women in agribusiness. The crossovers work in Ethiopia and Uganda subsequently led to pilot World Bank interventions and evaluations in the Republic of Congo and Guinea, and a wider program on crossovers across the World. The findings in Ghana in working with a financial institution led to the development of new products and services. The findings from the psychometrics tests in Ethiopia are being used by other teams in Southern Africa and East Asia. 3. SUSTAINABILITY (max 150 words) Please describe how you intend to ensure the lessons from this grant are made available to and informs the work of other teams: The lessons from this work are described in multiple policy reports and papers including the following: Policy Reports GIL Top Policy Lessons on Empowering Women Entrepreneurs Top Policy Lessons from Africa Gender Innovation Lab Research Supporting Women Throughout the Coronavirus (COVID-19) Emergency Response and Economic Recovery Making It Easier for Women in Malawi to Formalize Their Firms and Access Financial Services Personal Initiative Training Leads to Remarkable Growth of Women-Owned Small Businesses in Togo Designing Targeted Business Trainings for Impact: Insights from a Women Entrepreneurs' Program in Tanzania Can Job Training Decrease Women's Self-Defeating Biases? Experimental Evidence from Nigeria Disruptive Finance: Using Psychometrics to Overcome Collateral Constraints in Ethiopia Crossovers--Female Entrepreneurs Who Enter Male Sectors: Evidence from Ethiopia From Learning to Earning: An Impact Evaluation of the Digital Opportunity Trust Entrepreneurship Training Breaking the Metal Ceiling: Female Entrepreneurs Who Succeed in Male-Dominated Sectors in Uganda Papers Gender and Enterprise Development in Sub-Saharan Africa: A Review of Constraints and Effective Interventions Up before Dawn: Experimental Evidence from a Cross-Border Trader Training at the Democratic Republic of Congo–Rwanda Border Full Esteem Ahead? Mindset-Oriented Business Training in Ethiopia How Should the Government Bring Small Firms into the Formal System? Experimental Evidence from Malawi Teaching Personal Initiative Beats Traditional Training in Boosting Small Business in West Africa Better Loans or Better Borrowers?: Impact of Meso-Credit on Female-Owned Enterprises in Ethiopia Competing Priorities: Women's Microenterprises and Household Relationships The Profits of Wisdom: The Impacts of a Business Support Program in Tanzania Can Job Training Decrease Women’s Self-Defeating Biases?: Experimental Evidence from Nigeria Female Entrepreneurs Who Succeed in Male-Dominated Sectors in Ethiopia Breaking the Metal Ceiling: Female Entrepreneurs Who Succeed in Male-Dominated Sectors Short-Term Impacts of Formalization Assistance and a Bank Information Session on Business Registration and Access to Finance in Malawi Competing Priorities: How Household Income Management Affects Women’s Microenterprises in Urban Ghana The Limits of Commitment: Who Benefits from Illiquid Savings Products? These reports ensure that the lessons from the grant are available to those interested in the topic. The reports are available on the Africa Gender Innovation Lab website. The team has also presented these results in multiple settings and to teams preparing projects in multiple organizations. 4. RESULTS (max 300 words) Please briefly address the following questions related to the results achieved by your grant. 1) What were the main outcomes of this grant? 2) Did this grant achieve its intended results (outputs and outcomes)? Why/why not? 3) Did this grant leverage funding from any other (non-UFGE) sources, including Bank budget? If so, please detail the source and the amount of funding secured. 4) The following questions are linked to the UFGE’s results framework. Not all questions may apply to your grant, please indicate if so. a. Did the grant-supported work (or is it likely to) influence policy dialogue? If so, explain how. b. Did the grant-supported work (or is it likely to) influence the design, implementation and/or M&E of any WBG or non-WBG projects, institutional policies or programming approaches? If so, explain how and include details such as project IDs. c. Did any private sector companies adopt any new approaches to closing gender gaps as a result of the work? If so, explain how. d. Did the grant-supported work stimulate requests from government or private sector clients for new or expanded engagements (e.g. advisory services, TA, follow-up analytical work, or requests to add new components to a project)? If so, explain how. Under this work program. involving the Africa Gender Innovation Lab in partnership with Finance, Competitiveness and Innovation Global Practice, the team implemented 15 impact evaluations on gender and entrepreneurship in Africa. The following list of studies have had support from this TF, typically leveraging on the resources from the individual projects in each country: a) Democratic Republic of Congo/Rwanda Cross-Border Traders Project b) Ethiopia Competitiveness and Job Creation (CJC) c) Ethiopia Women and Entrepreneurship Development Project (WEDP) d) Ghana Financial Inclusion and Savings Promotion in Rural Ghana e) Ghana MSME Investment and Gender f) Guinea Crossovers g) Malawi Business Registration Impact Evaluation h) Mozambique Matching Grant Scheme for Business Performance i) Mozambique Roads Rehabilitation and Non-cognitive Skills of women in agribusiness j) Niger Texting for Change: Mobiles, Messages and Savings k) Nigeria Business Process Outsourcing Youth Employment Project l) South Africa Online Marketplace m) Tanzania Virtual Business Incubator n) Togo Managerial and Personal Initiative Training for Informal Firms o) Uganda Workers Apprenticeship and Managerial Training Skills Program The results from this work were very successful in improving the knowledge about what works and what does not work for female-owned businesses in Africa. The findings appear in the flagship regional report “Profiting from Parity: Unlocking the Unlocking the Potential of Women's Businesses in Africa�, funded through a separate TF. The work leveraged funds from other sources including World Bank lending projects associated with the interventions. The projects included the Great Lakes Trade Facilitation Project, Ethiopia WEDP, Ethiopia CJC, Malawi Business Environment Strengthening Technical Assistance Project, Mozambique Integrated Growth Poles Project, Togo Private Sector Development Project, and Uganda Private Sector Competitiveness Project. The impact evaluations also leveraged resources from other partners including 3ie, BNPP, BRPP, CIDA, IPA, IZA, Jobs, PEDL, WLSME, among others. 5. UFGE VALUE PROPOSITION (max 200 words) Please describe how UFGE funding made a difference for your work. The grant funded impact evaluations in multiple countries in areas of private sector development and gender, hence the impact of UFGE funding is significant. At the minimum the following aspects: (1) direct results from the impact evaluations; (2) findings from parallel studies started from the impact evaluations or analysis of baseline surveys; (3) impacts on improving interventions; and (4) impact evaluations. We are including an example for each of this type of lessons that was generated so far: (1) direct results from the impact evaluations: The results of the experiment in Tanzania indicate that a training including on-site support to the women entrepreneurs and providing them personalized assistance is more likely to be effective in helping women improve the profitability of their business than a traditional managerial training program. Moreover, the results suggest that women running mature businesses benefit more from such trainings than less experienced firms. (2) findings from parallel research: in the context of the impact evaluation in Ghana on cash grants to women entrepreneurs, the team conducted an in-depth qualitative study among women microentrepreneurs to understand the connections between women’s businesses and their households’ management of economic resources. The findings show that women’s business decisions are influenced by: (i) a desire to reinforce their partner’s responsibilities as a primary provider, (ii) attempts to fulfill normative expectations regarding daily provision of needs for the family, and (iii) a need to prepare for long-term security. (3) lessons on how to improve the implementation of operations: one of the reasons often mentioned for the lack of success of traditional business training programs is that the implementation of the intervention is not aligned with the initial plans. To avoid those risks, the research team has supported the government of Togo in thinking of ways of ensuring training quality, as it embarked on comparing the effects of two types of training: a traditional management training and a personal initiative training. The features included in both class-room trainings are: (i) feedback from participants; (ii) feedback from independent observers; (iii) quality control by training experts; (iv) video-recording. (4) lessons for impact evaluations: in one of the studies - of a matching grant program in Mozambique - we used a difference-in-differences propensity score methodology. It's the only impact evaluation that does not incorporate a randomized controlled trial (RCT). In this and in other impact evaluations of matching grant programs in other countries in Africa that were eventually dropped by various researchers before this grant started, there was an attempt first to conduct a RCT. Lessons are drawn from these experiences for both the implementation and the possible evaluation of future projects.