I MPROVING FINANCIAL LITERACY AND PARTICIPATION OF FEMALE ENTREPRENEURS IN C HILE Jeanne Lafortune and Jose Tessada Pontificia Universidad Católica de Chile & J-PAL LAC 1

Motivation 2  The existing literature evaluating the impact of financial and management training programs has not been uniformly positive in its conclusions.  Complementing in-class sessions with follow-up visits and technical assistance has significant positive effects in most studies, Cho and Honorati (2012).  Female entrepreneurs seem to benefit from personalized support and follow-up visits after a training program in Peru, Valdivia (2011)  There exists great heterogeneity in the programs offered so it is important to identify how the different components of the programs operate in order to achieve the expected results, Xu and Zia (2012)

3 Which elements or teaching methodologies contribute to the effectiveness of training courses for micro entrepreneurs? Guide the design of training courses and focalize the resources on the most effective methods

Experimental Design 4 Total Sample: 4 cohorts and 66 courses Role Model: 32 courses Individual Assistance on site Group Asistance Individual Assistance in class No Role Model: 34 courses Individual Assistance at business Group Asistance Individual Assistance in class  Randomization unit:  Role Model: class group level  Technical Assistance: individual level  Stratification:  Role Model: region and county  Technical Assistance: observable characteristics

Data Collection Procedure 5  Timeline Starting point Class 4: Base Line 1 Participant characterization Class 7: Role Models Presentation Application From: Base Line 0 (analytic abilities and financial knowledge Technical Assistance (Class 10) Last class: Follow-up 1 Final ceremony (remaining surveys applied) Double Digitation LB1 Month 0 Month 1 Month 2Month 3 Month 4 Month 12 Follow-up 2: Phone survey

Compliance Rates 6 86% 67%71%77%

Results in the short-run 7  Visit of a role model significantly increases the attendance of participants to classes  Relatively cheap way of increasing knowledge transmitted to the students!  Role models appear to decrease the purchase of capital goods and the application to seed funds  Change in the way the business is financed and developed.  Receiving personalized technical assistance increases the probability of self-employment and the purchase of a computer  More professional/focused businesses?  Little evidence that this occurred through improved business techniques

Results in the long-run  We only have results for 2 cohorts so far, results are preliminary  Income per capita appears to increase in response to personalized technical assistance  Role model also reduces the probability of having a loan rejected  Personalized technical assistance in the business significantly raises sales but also costs leading to no statistically significant impact on profits  Again, little evidence that this occurred through improved business techniques

Remaining questions 9  Are we not measuring techniques adequately?  Or do role models may operate on a different margin than through learning (advice and motivation)?  Individualized technical assistance may motivate development of a sound business plan more than pushing for the implementation of new practices  We hope to learn more through the follow-up 2 with our last 2 cohorts.