| Abstract: |
There is broad evidence of gender gaps in the productivity of
microenterprises, which are in part linked to financial and human capital
constraints. Existing literature suggests that interventions simultaneously
addressing skills and capital constraints can be effective, but there is
little evidence to date exploring the combination of skills and savings
interventions. This study tests the relative effectiveness and cost
effectiveness of providing supply-side incentives to promote agent banking
savings accounts, business and financial literacy training for female
entrepreneurs, and the combination of the two on women’s businesses and
agency in Indonesia. The study took place in 401 villages in East Java in
which agent banking products were recently introduced. Although the trial
found only small positive effects on the take-up of branchless banking
services, both interventions had significant positive impacts on women’s
profits. The impacts of the training and mentoring intervention seem to come
in part from improved business practices, greater savings, increased business
assets, and increased decision-making power. Because the high incentives
treatment impacted women’s profits but not any intermediate outcomes the
mechanisms are less clear—potentially coming either from a more
woman-friendly business environment or through using their husbands’ savings
or their existing savings to support their businesses. Although the high agent
incentives are more cost-effective than the training and mentoring, policy
makers may still prefer the demand-side intervention, as it has more positive
implications for women’s overall empowerment and stronger impacts for the
poorest quintile of female entrepreneurs. |