1. TANZANIA VIRTUAL BUSINESS INCUBATOR Overview and preliminary findings

2. Context Project implemented by a local NGO, Tanzania Gatsby Trust, which received technical assistance from AIDOS Training is provided in Dar es Salaam and Kibaha Basic criteria: female entrepreneurs who are literate and at least 18 years old Market study was conducted to identify sectors with growth potential The goal of the intervention is to provide a tailored form of training: Tailored to the needs of the entrepreneur Tailored to the demand identified on local markets (or even exports markets)

3. Distribution by sectors and characteristics of participants Distribution by broad sector (entrepreneurs also surveyed at end line) Sector Baseline Freq.Percent Animal Husbandry9713.8 Handicraft/Manufacturing7310.4 Farming202.8 Processing25235.9 Services253.6 Textile486.8 Trading & food retail11416.2 Other7310.3 Total702100 Other characteristics of the entrepreneurs: Median reported monthly revenues from business: TZS 300 000(USD 190) – average is TZS 660 669 (USD 418) Median reported profit in previous month: TZS 150 000(USD 91) – average is 43 years old on average Employ 1.3 workers in addition to themselves

4. Set up of the intervention 821 women selected at baseline – randomly assigned to one of three groups Group 1Group 2Group 3 ControlTreatment 1Treatment 2 Baseline290271256 Endline248239215 14% attrition All groups (including control group) received complementary training sessions on health issues, HIV prevention and domestic violence

5. Description of the intervention Interventions common to the two treatment groups (group 2 and 3) Interventions delivered to group 3 only Entrepreneurship and Business Management Training (5full days) Entrepreneurship and enterprising organization; low cost promotional activities; understanding your market; effective marketing; costing, pricing, and calculating your profit; book-keeping; managing cash, inventory and credit; customer care; sources of finance; business plan; HR management; branding and patenting; time management; leadership training; communication and negotiation Technical Training (up to 5full days) Production skills, packaging and labeling, quality management, maintenance, customer care, product pricing, hazard analysis and critical control points, compliance, traceability and bar code Orientation (1 full day) Business health check; SWOT-analysis of the business Specialized Technical Assistance and Individualized Counseling, Coaching, and Mentoring (flexible) Business counseling; linkage to consultants, advisors, project programmers; marketing assistance and linkage to markets; individualized support from coaches; link with mentors and participation in networking forums; finance facilitation

6. Control and treatment groups are balanced at baseline Mean Group 1 Mean Group 2 Mean Group 3 Diff Group 1- Group 2 Diff Group 1- Group 3 N Log of monthly revenues12.6112.4412.51-0.17-0.11683 (0.11)(0.13)(0.14)(0.17) Log of revenues last year14.2413.9214.06-0.32-0.18668 (0.21)(0.24)(0.26)(0.31)(0.33) Log of profit in last month10.7610.8510.600.09-0.16684 (0.24)(0.23)(0.27)(0.33)(0.36) Log of monthly earnings12.2512.2312.17-0.03-0.09697 (0.10)(0.09)(0.15)(0.14)(0.18) Age43.2142.7643.36-0.450.15699 (0.59)(0.58)(0.59)(0.83)(0.88) Percentage married0.570.59 0.030.02702 (0.03) (0.04)(0.05) Percentage - completed O Level 0.440.420.35-0.02-0.09702 Access to clean water81.8%82.0%78.6%0.1%-3.2%702 (0.02) (0.03) (0.04) Access to electricity81.0%77.0%75.3%-4.1%14.2%702 (0.02)(0.03) (0.04)(0.19) Log of total value of hh assets 14.7914.6314.53-0.17-0.26702

7. Take up and participation Group 1Group 2Group 3 Percentage of entrepreneurs who indicated at endline that they completed a business training (any) in addition to formal education 83.5%97.1%94.9% Percentage of entrepreneurs who indicated at endline that they completed an MKUBWA business training (any) in addition to formal education 73.4%94.1%94.4% Self reported M & E data Group 1Group 2Group 3 Percentage of entrepreneurs who attended 5 (out of 5) entrepreneurship and business management training sessions 0.4%75.3%87.0% Percentage of entrepreneurs who attended at least 3 technical training sessions 0.4%66.5%67.0%

8. Model

9. Impact on business practices CHANGE IN BUSINESS PRACTICES Has a budgetPaid self Registered with Brela Differentiation through packaging Differentiation through neater premises Has a business plan Has a TIN number Has a licence Pools purchase with others Group 20.01400.006490.003030.00295-0.0223-0.01480.0128-0.0156-0.0341 (0.0445)(0.0420)(0.0384)(0.0299)(0.0411)(0.0431)(0.0400)(0.0399)(0.0393) Group 30.0950**0.155***0.138***0.0869**0.0837*0.106**0.0978**0.109**0.0719* (0.0439)(0.0451)(0.0418)(0.0345)(0.0445)(0.0455)(0.0431)(0.0436)(0.0429) N697 700 697 700

10. Impact on business outcomes Revenues from business activity Profits from business activity Earnings from all sources Log of monthly revenues Log of revenue in previous month Log of revenues in previous year Log of profit in previous month Log of profit in previous year Log of monthly earnings Group 2-0.339*-0.1860.0106-0.3320.01060.0880 (0.177)(0.437)(0.289)(0.409)(0.289)(0.164) Group 3-0.0966-0.161-0.0371-0.307-0.03710.0703 (0.171)(0.454)(0.317)(0.430)(0.317)(0.194) N678680645679645692 R squared0.0630.1050.0220.1120.0220.047

11. Heterogeneous effects - Tenure (1) Tenure Log of monthly revenue Log of revenue in previous month Log of revenue last year Log of profit in previous month Group2-0.700**-0.160-0.675*-0.210 (0.275)(0.641)(0.403)(0.592) Group3-0.710**-1.141*-0.925**-0.966 (0.286)(0.680)(0.437)(0.647) Group2 X Tenure0.0520*-0.006660.103**-0.0192 (1 additional year) (0.0285)(0.0730)(0.0494)(0.0676) Group3 X Tenure0.0880***0.137**0.128**0.0926 (1 additional year) (0.0313)(0.0649)(0.0508)(0.0655) Observations675677642676 R-squared0.0850.1220.0360.123 F test P value0.1320.03450.4360.0916 Tenure: Mean : 6.9 years 25 th : 2 years Median: 5 years 75 th : 10 years

12. Heterogeneous effects - Tenure (2a) Percentage

13. Heterogeneous effects - Tenure (3) Cumulative distribution function

14. Heterogeneous effects - Tenure (4) We can rule out education, accumulation of assets and networks as explanations for these results on the importance of tenure Dependent variable: Log of typical monthly revenue Interaction of treatment and education Interaction of treatment and household assets accumulation Interaction of treatment and business assets accumulation Interaction of treatment and professional networks Interaction of treatment and financial networks Interaction of treatment and intensity of networks Group2-0.00611-0.461-0.527-0.352*-0.402-0.238 (0.188)(0.461)(0.322)(0.186)(0.244)(0.325) Group3-0.07580.317-0.0216-0.0609-0.2610.182 (0.236)(0.389)(0.274)(0.182)(0.278)(0.348) Group2 X Variable 1-0.2910.3930.360-0.07950.170-0.408 (0.315)(1.036)(0.456)(0.542)(0.364)(1.597) Group3 X Variable 1-0.0745-1.109-0.149-0.7170.304-1.566 (0.395)(0.844)(0.514) (0.380)(1.612) Group2 X Variable 2-2.065* (1.100) Group3 X Variable 20.611 (0.563) Observations678 R-squared0.0900.0750.0660.0670.0700.069 Variable 1: completed O Levels Variable 2: completed A levels Variable 1: Index of household assets Variable 1: Index of business assets Variable 1: dummy=1 if entrepreneur is a member of a cooperative Variable 1: dummy=1 if entrepreneur is a credit/savings group Variable 1: Network intensity index (# of groups to which respondents belongs/total number of groups listed in questionnaire)

15. Heterogeneous effects - Tenure (5) Effect on accumulation of assets No effect observed on average Value of HH assets (at endline) Value of BIZ assets (at endline) Value of HH + BIZ assets (at endline) Group2526,541-176,396343,981 (592,052)(138,755)(631,695) Group3338,333-63,013265,299 (335,861)(170,022)(426,503) Observations700 R-squared0.0310.0360.031 but a significant impact for entrepreneurs with longer tenure Value of HH assets (at endline) Value of BIZ assets (at endline) Value of HH + BIZ assets (at endline) Group2257,915-281,897-633.0 (921,905)(235,113)(992,591) Group3-534,140-164,712-695,692 (446,903)(266,577)(611,982) Group2 X Tenure40,94615,62452,102 (69,750)(16,659)(74,532) Group3 X Tenure124,763**15,217137,770** (53,874)(17,986)(60,832) Observations697 R-squared0.038