Finance & PSD Impact SEPTEMBER 2023 The Lessons from DECFP Impact Evaluations ISSUE 66 Training Microenterprise Owners by Zoom Elwyn Davies, Peter Deffebach, Leonardo Iacovone, and David McKenzie Digital technology offers the potential to Feasibility and Cost lower the costs of delivering business The women who signed up for the program training, and to enable it to be scaled across a were running small and not very profitable wide geographic area. But there are questions businesses. However, they did tend to be about how feasible such training is for slightly younger and more educated on entrepreneurs running microenterprises in average than the average Mexican female developing country settings, as well as microentrepreneur, suggesting that online concerns about high drop-out rates with training may be more of a barrier for less voluntary online courses. literate and older women. We worked with an NGO, CREA, to test Those who signed up experienced their online training program for female relatively few problems with the technology. microentrepreneurs in Mexico and Out of the 75 sessions we monitored, only 3 Guatemala as these countries recovered from experienced large difficulties with the onset of the COVID-19 pandemic. connectivity due to hurricanes or power cuts. Participants typically used their mobile Program, Sample and Experiment phones to connect, and were able to watch the CREA launched a program called sessions and interact with the instructor via Fortalece tu negocio (Strengthen your chat and their microphones. business), that was taught in live classes via Attendance was in line with in-person Zoom to groups of around 20 women at a trainings: 80.7% of those assigned to time. The course consisted of nine two-hour treatment attended at least one session, sessions, and covered standard topics such as averaging 5.5 out of 9 sessions, with 61.4% accounting, planning, and marketing, as well completing the course. as resilience and self-determination. However, cost savings relative to in- We recruited a sample of 2,208 women person training were more modest than running microenterprises throughout Mexico anticipated. Training cost $50 per participant and Guatemala, largely coming from paid in Mexico, compared to $62 per person for Facebook advertising. About 60% of firms CREA’s in-person courses. The main cost is had no employees, and the average firm the instructor’s salary, which applies in either owner earned around $100 a month in profits. modality, and scheduling and recruiting The most common sectors were baked and issues meant that class sizes were not any prepared foods, beauty and handicrafts, and larger online than they typically are in clothing. person. The main cost advantage is then in The sample was randomly divided into a being able to reach a much more control group of 695 businesses, who were geographically diverse population than is offered an asynchronous program of slides possible with in-person training. and webinars that had low take-up; and treatment groups of 1513 businesses that Training led to short-term improvements were offered the live training. We conducted follow-up surveys by phone and online at 2-months and 6-months after training, with 72-73% response rates. We use Do you have a project you want evaluated? DECRG-FP researchers are always looking for opportunities to work with colleagues in the Bank and IFC. If you would like to ask our experts for advice or to collaborate on an evaluation, contact us care of the Impact editor, David McKenzie (dmckenzie@worldbank.org) these to measure whether women learnt There is some evidence that these were anything from the training, made changes in accompanied by an increase in sales: sales their business practices, and saw any increased by a statistically significant $240 a improvement in business performance. month when measured in levels, or We find a statistically significant, but insignificant 11 percent when measured in small, improvement in business knowledge. logs (which captures percentage changes). We then measure 22 different business Profits increased by 10 percent, which was practices covering marketing, accounting, also not statistically significant. and planning. We find the control group is using half of these practices, and training However, these improvements did not last results in a 5.4 percentage point improvement However, as the bottom panel of Figure 1 in these practices over 2-months, mostly shows, treated firms were more likely to stop through changes in planning and accounting. using some of these business practices Figure 1 shows more treated (blue) firms between 2 and 6 months, while the control improving practices than control (red) firms group continued to improve a little. The net between 0 and 2 months. result is no significant impact on business practices after 6 months, nor is there a Figure 1: Churn in Business Practices significant impact on sales or profits after this time. Policy Implications 1. Online training via Zoom is indeed feasible for microenterprises in a middle -income setting. This offers the potential to expand access beyond a few cities. 2. Training needs to include more immediately actionable steps, especially around marketing. Our observations and qualitative work suggested that the training helped firms with getting a snapshot of their situation and some planning, but did not have enough specific tips for getting new customers and sustaining sales growth. 3. Cost effectiveness can be improved by holding larger classes with the best trainers. Identifying the best trainers and having them teach more students at a time can both lower the costs per student, as well as increase the likelihood of effectiveness. For further reading see: Elwyn Davies, Peter Deffebach, Leonardo Iacovone, and David McKenzie (2023) “Training Microentrepreneurs over Zoom: Experimental Evidence from Mexico”.World Bank Policy Research Working Paper no. 10574, September 2023. Recent impact notes are available on our website: https://www.worldbank.org/en/research/brief/finance- and-private-sector-impact-evaluation-policy-notes