Theme
Capacity Development

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"This document contains recommendations on creating effective micro, small, and medium sized enterprise (MSME) mentoring programs for practitioners and supporters. A key driver for reducing global poverty and unemployment is increasing the growth and sustainability of MSMEs. While technical assistance, financing, and other initiatives can help MSMEs to achieve growth and sustainability, mentoring can also have high returns on investment. This is unsurprising, given mentoring’s historic origins in the areas of knowledge sharing and social networks. Yet there is a lack of consensus on what defines effective mentoring, evidence on good practices, and guidance on implementation. This publication addresses these gaps."

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"Effective human capital formation through the medium of entrepreneurship education and training (EET) is of increasing concern for governments, as EET is growing rapidly across the world. Unfortunately, there is a lack of consistent evidence showing that EET helps to create more or better entrepreneurs. We undertake the first quantitative review of the literature and, in the context of human capital theory, find that there is indeed support for the value of EET. Recommendations to improve the quality of future work in the field are provided."

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"We organise a field experiment with smallholder farmers in Rwanda to measure the impact of financial literacy training on financial knowledge and behaviour. The training increased financial literacy of participants, changed their savings and borrowing behaviour and had a positive effect on the new business start-up. However, it failed to have a significant (short-term) impact on income. Using a two-stage regression framework, we identify enhanced financial literacy as one of the important factors explaining behavioural changes. We also test whether financial knowledge spillovers from trained farmers to their peers in local village banks but find no evidence for that."

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"The objective of this edition is to: 1) Educate agribusiness entrepreneurs on the various available lending options for growth financing; 2) Demystify private equity financing options and how Sahel Capital has effectively created significant value for agribusinesses; and 3) Opportunities and challenges in the agriculture sector, government policies and sustainability in the sector."

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"In economies characterized by low labor demand and high rates of youth unemployment, entrepreneurship training has the potential to enable youth to gain skills and create their own jobs. This paper presents experimental evidence on a new entrepreneurship track that provides business training and personalized coaching to university students in Tunisia."

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"We estimate the effect on business start-ups of a program that significantly speeds up firm registration procedures. The program was implemented in Mexico in different municipalities at different dates. Our estimates suggest that new start-ups increased by about 5% per month in eligible industries, and we present evidence supporting robustness and a causal effect interpretation. Most of the effect is temporary, concentrated in the first 15 months after implementation. The estimated effect is much smaller than World Bank and Mexican authorities claim it is, which suggests attention in business deregulation may be over emphasized."

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"We estimate the demand for business training among entrepreneurs in Jamaica. We use either a re-framed version of the Becker-DeGroot-Marschak (BDM) mechanism or take-it-or-leave-it (TIOLI) offers to elicit willingness to pay for business training. We find that the majority of entrepreneurs have a positive willingness to pay for training, which suggests some scope for providers to help partially recover the costs of offering training. Our results indicate that charging a higher price for the course screens out a large share of entrepreneurs, in particular those entrepreneurs with fewer assets, who are more risk-averse business owners, and those who do not expect to benefit as much from the training. Providing a credit option does not affect take-up of the course. We find that higher willingness to pay is correlated with higher attendance, and conditionally on paying a positive price, those who are offered higher prices are more likely to attend, pointing to psychological or sunk-cost effects. However, this does not fully compensate for the reduction in participation in training due to the extensive margin effect of charging higher prices. Finally, we find some evidence that business training encourages higher adoption of business practices and improves business knowledge.

Our follow-up survey suffered from high attrition, which limits our ability to detect impacts on sales and profits. We do not see that effects are stronger for entrepreneurs paying higher prices or with higher willingness to pay, but a lack of statistical power also means that we cannot rule out the possibility that those
who pay higher prices do benefit more. We conclude that the optimal price for governments to charge may therefore lie somewhere in between free or nominal cost and market price, and depend on how governments trade-off equity and efficiency."

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"In Mexico, microenterprises and SMEs make up 99 percent of firms, employ about 64 percent of the workforce, and account for more than 40 percent of GDP. Given the importance of SMEs in the economy, governments in Mexico over the past twenty years have established a wide variety of SME support programs. How effective these SME programs have been in achieving their objectives is unclear.

This paper evaluates SME support programs in Mexico using a panel of firm-level data for two groups of firms-a treatment group that participated in SME programs and a control group that did not. The panel data have been created by linking SME program participation information to a large panel of annual industrial surveys (1994-2005) maintained by Mexico's National Institute of Statistics and Geography."

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"The GALI team consistently hears questions from accelerators and others in the field about financial sustainability. In this brief, we ask: How do accelerators fund their programs, and how do different funding profiles relate to different accelerator offerings?"

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"In this brief, we respond to a question from the Argidius Foundation about the return on investment for accelerators: At the Argidius Foundation, we assess the return on total investment (ROTI) of the capacity development programs that we support. What can your data tell us about the return on investment for accelerator programs?"

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