Money Management and Entrepreneurial Training in Microfinance: Impact on Beneficiaries and Institutions
38 Pages Posted: 15 Mar 2015
Date Written: March 14, 2015
Most Microfinance institutions (MFIs) worldwide focus their efforts in relieving the poor from financial constraints through micro-loans. This research focuses on integrating a money management and entrepreneurial training plan to a lending program in a non-profit MFI in Kolkata, India. The paper’s main purpose is to measure the marginal impact of training on the beneficiaries through a randomized control trial. Positive and significant effects are found on the institutional outcomes (number of missing or delayed repayments, average weekly savings) and financial management skills of the clients (ability to separate personal and business money, to track revenues and expenses, to calculate profits). Initiative and self-confidence measures also increase, while business outcomes and entrepreneurial skills of the participants exhibit no significant changes. The effects appear stronger on those for whom the training was compulsory, and for those who expressed more interest in the course before the beginning of the program. A formal set-up and incentives linked with the completion of the training are therefore advised when considering similar interventions.
Keywords: microfinance, training programs, money management, entrepreneurship, difference in-differences
JEL Classification: G21, O15, L31, I25
Suggested Citation: Suggested Citation