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

Discussion Papers 1823, 62 S.

Antonia Grohmann, Lukas Menkhoff, Helke Seitz

2019

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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.”

Helke Seitz

Research Associate in the International Economics Department

Antonia Grohmann

Research Associate in the International Economics Department

Lukas Menkhoff

Head of Department in the International Economics Department



JEL-Classification: O12;D22;O16;L26
Keywords: Financial Training, Feedback, Small Business Growth, Economic Development