Reshad Sadozai, Mattea Stein, Maria Jones, Javaid Zeerak Afghanistan Rural Enterprise Development Program (AREDP) Concept Note for Impact Evaluation Reshad Sadozai, Mattea Stein, Maria Jones, Javaid Zeerak

Key Issues 75% of population live in rural areas where agriculture is the primary activity; High unemployment and poverty rates; Shortage of business planning, management, and marketing know-how (BDS); Shortage of access to formal, affordable, suitable credit

AREDP PDO To Improve employment opportunities and income of rural men and women, and sustainability of targeted local enterprises. Components A. Community-led Enterprise Development B. SME Development C. Program Management Support

Component A Key Interventions Under Component A Facilitating the formation of Savings Groups and delivering financial literacy training Federating Savings Groups into Village Savings and Loan Associations (VSLAs) in order to provide access to credit Facilitating the formation of Enterprise Groups and delivery of Business Development Services

Research questions What is the impact of facilitating the formation of community-based financial institutions and provision of financial literacy training on access to credit & household incomes? (including attitudes towards credit and lending) What is the added impact of aggregating entrepreneurs into productive groups and provision of BDS on the following? Enterprise sustainability/profitability Access to markets Employment creation What is the disaggregated effect of program interventions on women in particular?

Indicators Household Level Improved financial literacy skills & attitudes towards credit and lending Total amount of loans accessed, number of loans accessed, percentage of loans repaid, Changes in investment Number of household members gainfully employed, income, consumption, assets Enterprise Level Access to markets Percentage in turnover, revenue, and profit Number of new jobs created Number of women owned enterprises Sustainability Group Level Frequency of meetings, duration of savings group Amount saved by group, amount lent by group, number of loans given, percentage of loans recovered intra-group cohesion & trust, inter-group cohesion & trust Village Level Number of VSLAs & producer associations formed Second order effect on public goods

Identification strategy Total CDCs formed by NSP AREDP-eligible CDCs District Randomization for 3-year rollout Year-1 Roll-out Assignment to sub-interventions & control SIT-1 SIT-2 Control

Sample Universe 250 CDCs 125 CDCs SIT-1 SIT-2 Control 2500 SGs 1000 EGs 37,500 HHs 1250 SGs 18,750 HHs SIT-1 SG formation VSLA Federation FinLit EG Formation BDS provision SIT-2 Control

Sampling Strategy # CDCs in SIT-1 Control All CDCs in SIT-2 HHs member of SGs HHs member of EGs HHs member in both HHs member in neither # CDCs in SIT-1 All CDCs in SIT-2 Control (Actual #s of HHs and Villages TBD)

Timeline D&R – 2 months FR – 1 year Midline – 2 years Design & Randomization First round of Data Collection Midline Data Collection Endline Data Collection D&R – 2 months FR – 1 year Midline – 2 years Endline – 5 years

Impact evaluation team AREDP IE Specialist M&E field staff (for data coll.) Head of Office of M&L, AREDP Program Mgmt Staff DIME Field Coordinator Research Team Academia Lead Researcher

Estimated budget AREDP Data collection Data entry & cleaning Data Analysis DIME Impact Evaluation Field Coord & Technical Assistance AREDP Budget allocated for M&E – >$1.5million

Parting Questions Measuring social cohesion

Questions & Discussion Fin Questions & Discussion