The Effect of Personalized Feedback on Small Enterprises’ Finances in Uganda

64 Pages Posted: 23 Oct 2019

See all articles by Antonia Grohmann

Antonia Grohmann

German Institute for Economic Research (DIW Berlin); Aarhus University

Lukas Menkhoff

RWTH Aachen University - Faculty of Economics

Helke Seitz

German Institute for Economic Research (DIW Berlin)

Date Written: October 2019

Abstract

This RCT examines the effect of a new style finance training during which participants are given personalized feedback on their financial business outcomes in addition to a “rules-of-thumb” training approach. We compare this to the effects of a “rules-of-thumb” training by itself and to a control group. Targeting about 500 small and micro entrepreneurs in Kampala, Uganda, we find that the personalized feedback training significantly improves outcomes at the six-months horizon. The index of primary outcomes increases by 0.258 SD units and overall savings improve by 0.257 SD units. Analyzing the feedbacks provided we find evidence that feedback works by increasing motivation, in line with “feedback-intervention-theory.”

Keywords: Financial Training, Feedback, Small Business Growth, Economic Development

JEL Classification: O12, D22, O16, L26

Suggested Citation

Grohmann, Antonia and Menkhoff, Lukas and Seitz, Helke, The Effect of Personalized Feedback on Small Enterprises’ Finances in Uganda (October 2019). DIW Berlin Discussion Paper No. 1823 (2019). Available at SSRN: https://ssrn.com/abstract=3473762 or http://dx.doi.org/10.2139/ssrn.3473762

Antonia Grohmann (Contact Author)

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstraße 58
Berlin, 10117
Germany

Aarhus University ( email )

Nordre Ringgade 1
DK-8000 Aarhus C, 8000
Denmark

Lukas Menkhoff

RWTH Aachen University - Faculty of Economics ( email )

Aachen
Germany

Helke Seitz

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstraße 58
Berlin, 10117
Germany

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