Impact of Credit and Training on Enterprise Performance: Evidence from Urban Ethiopia

This study evaluates the impact of business-development-support programs (credit, training, and a combination of both) on the performance of micro- and small enterprises (MSEs) in Ethiopia. Using 2015 Ethiopian urban survey data and employing endogenous-switching regressions for multiple treatments, we document a positive and significant effect of credit, training, and a combination of training and credit on MSEs. Our results highlight the heterogeneity in treatment effects between women- and men-owned MSEs: women-owned businesses do not benefit from access to treatments. Our results suggest that improving the performance of MSEs requires fine-tuned interventions that meet the specific needs of men and women who own small businesses rather than one-size-fits-all programs.

Keywords: Treatment effects, MSEs, Ethiopia

JEL Classification: C31, J16, M21

Suggested Citation: Suggested Citation

Araar, Abdelkrim and Awel, Yesuf and Boka, Jonse Bane and Girma, Hiywot and Shafi, Ajebush and Yitbarek, Eleni Abraham and Zerihun, Mulatu, Impact of Credit and Training on Enterprise Performance: Evidence from Urban Ethiopia (June 26, 2019). Partnership for Economic Policy Working Paper No. 2019-13, Available at SSRN: https://ssrn.com/abstract=3410577 or http://dx.doi.org/10.2139/ssrn.3410577