Money Management and Entrepreneurial Training in Microfinance: Impact on Beneficiaries and Institutions

38 Pages Posted: 15 Mar 2015

See all articles by Emanuele Rusinà

Emanuele Rusinà

University of California, Berkeley

Lucia Dalla Pellegrina

Università degli Studi di Milano-Bicocca - Department of Economics, Management and Statistics (DEMS)

Giorgio Di Maio

Università degli Studi di Milano-Bicocca - Department of Economics, Management and Statistics (DEMS)

Paolo Landoni

Polytechnic University of Turin - Department of Management and Production Engineering (DIGEP)

Date Written: March 14, 2015

Abstract

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

Rusinà, Emanuele and Dalla Pellegrina, Lucia and Di Maio, Giorgio and Landoni, Paolo, Money Management and Entrepreneurial Training in Microfinance: Impact on Beneficiaries and Institutions (March 14, 2015). University of Milan Bicocca Department of Economics, Management and Statistics Working Paper No. 296. Available at SSRN: https://ssrn.com/abstract=2578304 or http://dx.doi.org/10.2139/ssrn.2578304

Emanuele Rusinà

University of California, Berkeley ( email )

310 Barrows Hall
Berkeley, CA 94720
United States

Lucia Dalla Pellegrina (Contact Author)

Università degli Studi di Milano-Bicocca - Department of Economics, Management and Statistics (DEMS) ( email )

Piazza dell'Ateneo Nuovo, 1
Milan, 20126
Italy

Giorgio Di Maio

Università degli Studi di Milano-Bicocca - Department of Economics, Management and Statistics (DEMS) ( email )

Piazza dell'Ateneo Nuovo, 1
Milan, 20126
Italy

Paolo Landoni

Polytechnic University of Turin - Department of Management and Production Engineering (DIGEP) ( email )

Corso Duca degli Abruzzi, 24
Torino, Torino 10129
Italy

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