Support establishment of National Fund for SME Development

[Kuwait]Istanbul, May 14, 2015

Who are we?

• In 2013, Kuwait’s Parliament and government approved the National Fund for Supporting Small and Medium Enterprises; to achieve significant contribution from SMEs to the Kuwait’s economy.

• The law allocates a KD 2 billion ($7 billion) capital for developing SMEs in Kuwait.

• The National Fund for the Development of SMEs (“NF”) entity was formed, in partnership with the WBG, is responsible to achieve the law’s objectives.

What's the NF main Program?• Supports SMEs by:

– Extending loans to meet SMEs financial requirements– Technical and administrative assistance

• Maximum loan of KWD 500,000 (approx. $1.7M) with flexible repayment schedule

• NF will contribute 80% of the funding and a local Bank contributes 20%.

• Interest rate of only 2.8%• 1 year grace period• Incentives for government employees to get entrepreneurship

sabbatical (can go back after 3 years to same job, get salary during the sabbatical)

What is the key challenge? IE?

• The challenge:– The key challenge is Take ups– Easy for Potential Entrepreneurs to get

Government job (well paid): reluctance to leave comfort zone

• Intervention tools:Training, Incubation, etc…

Intervention Summary• For the randomized treatment group of the target population of civil

servants, intervention is to send a SME Fund representative to do in-person awareness/pitching of the SME Law (sabbatical provision) and product offer and encourage them to apply to SME Fund

• Campaign narrative: – About the sabbatical– About the SME Fund Product*– Encourage to apply (Share success story) and how to apply

*(access to Equity and debt capital, incubation, land, ease of license/reg, training)

Evaluation Questions

• What is the impact of the encouragement* on take-up of the opportunity by Government Civil Servants as measured by (a) application to SME Fund; (b) approval and actual availing of encouragement by civil servants?

• *Encouragement:– In-person campaign

• Sabbatical Provision• [Need based – access to Equity and debt capital, incubation, land,

ease of license/reg, training]

Evaluation Design, Sample and Data

Population – Civil Servants Use Civil Service ID data

Sample A (Control) Sample B (Treatment)

No Intervention (ads/newspapers)

Intervention - Encouragement

(Dedicated SME Fund rep awareness)

Take up of intervention

Random Sample (size to be determined)

% people met: Expected high percentage – since it is supply driven and resource intensive (Impl for sample size)

Outcome% application to SME Fund% approved% sabbatical taken$ cost per application / sabbatical# KW jobs created by these firms (2 years)

Data, Metrics

Outcome

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Open issues for consideration• Do we want to test different versions of the marketing pitch?• Do we want to test different segments of target population (by gender, by

years in service)? If yes, how to determine the target groups (e.g., Baseline with psychometric testing?)

• Spillover effects – if the persons in treatment group spreads information to those in control group

• Difficulty in separating causality if treatment group shows impact– Is it because of the campaign or is it because of the encouragement package (SME Law)?– Qualitative survey in endline asking treated officals for reasons for take-up or reluctance

to take-up

• How to manage variability in “pitching” performance of the SME Fund representative?

Timeline• Prerequisite: The fund aims to ready and launch its first set of products in

September, 2015• Sampling and randomization – October• Treatment Campaign: Nov – January (depends also on sample size) • Outcomes - # Applications (1.5 months after campaign), # approvals (6

months after campaign)

Building a sustainable pension scheme for the informal sector

RwandaIstanbul, May 14, 2015

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Background: An Informal Sector Pension Program for Rwanda

• The Government of Rwanda is committed to facilitating long-term savings via an Informal Sector Pension Scheme (ISPS)

• Feasibility study completed (December 2014), implementation strategy and design details forthcoming (June 2015)

• Expected features: voluntary contribution (no commitment), some withdrawal flexibility, incentives to contribute (e.g. matching)

• Leverage existing socio-financial channels to achieve scale– Production co-operatives play an important in the economic life of informal sector

workers, serving as a channel to achieve economic scale, receive training, and develop initiatives for wellbeing of members

– Mobile financial services are growing rapidly, now reaching 18% of adults in Rwanda

Early stage: proposed interventions are subject to refinement!

Intervention Summary

• Objective: Understand whether/which supporting interventions, delivered via agricultural co-operatives or mobile phone platforms, increase takeup and usage of a new pension scheme for the informal sector

• Two distinct channels two projects1. Members of agricultural co-operatives (over

4,000 nationwide)2. Mobile money users (18% nationwide)

Research Questions 1: Agricultural Co-Operatives

1. What is the impact of high-intensity direct marketing to co-operatives on takeup and use of the pension?

2. What is the impact of monetary and non-monetary incentives for co-operative leaders on takeup and use of the pension?

3. What is the impact of pre-committing to pension contributions (deducted from future lump-sum payments for output) on pension balances?

Evaluation Design 1

20 Co-Ops

20 Co-Ops

20 Co-Ops

20 Co-Ops

20 Co-Ops

20 Co-Ops

20 Co-Ops

20 Co-Ops

20 Co-Ops

20 Co-Ops

20 Co-Ops

20 Co-Ops

Light marketing

Intensive marketing

No incentives

Monetary incentives

Non-monetary incentives

No Commitment

Commitment

Our cross cutting design lets us answer multiple questions at once while economizing on sample size

Q1 (of 3): What is the impact of high-intensity direct marketing to co-operatives on takeup and use of the pension?

20 Co-Ops

20 Co-Ops

20 Co-Ops

20 Co-Ops

20 Co-Ops

20 Co-Ops

20 Co-Ops

20 Co-Ops

20 Co-Ops

20 Co-Ops

20 Co-Ops

20 Co-Ops

Light marketing

Intensive marketing

No incentives

Monetary incentives

Non-monetary incentives

Q2a (of 3): What is the impact of non-monetary incentives for co-operative leaders on takeup and use of the pension?

20 Co-Ops

20 Co-Ops

20 Co-Ops

20 Co-Ops

20 Co-Ops

20 Co-Ops

20 Co-Ops

20 Co-Ops

20 Co-Ops

20 Co-Ops

20 Co-Ops

20 Co-Ops

Light marketing

Intensive marketing

No incentives

Monetary incentives

Non-monetary incentives

Sample and data• Sample: 240 co-operatives with 100 members

per co-operative (power calcs for commitment treatment assume 4% takeup)

• Data: – Baseline data to measure co-op member

characteristics and social networks, relationship to leader, national ID number

– Administrative data on pension takeup and use– Endline survey to measure changes in knowledge

and attitudes, savings behavior

Next Steps/Timeline

• Design/implementation report by June 2015• EOI July 2015 concept note• Further scoping exercise Oct/Nov 2015• Iterate design and cement partner

relationships Dec-May 2016• Roll-out July-Aug 2016

Thank you!

Intervention Detail• Marketing: Marketers from financial institutions visit

co-operatives to encourage members to take up and use the pension product– We vary the number of visits

• Incentives for leaders: Leaders receive either monetary or non-monetary rewards (e.g. a certificate) tied to co-op members takeup and use of the pension product

• Committed Contributions: Members can elect to have a portion of future payments for agricultural output deposited directly into their pension account– Here we will focus on use conditional on takeup

Intervention Detail 2• Linking mobile to pensions– Allow individuals to commit a share of airtime

purchases to own (others?) pension– Allow recipients to commit a share of mobile

money transfers to own pension– Allow senders to commit a share of mobile money

transfers to the pension of others (e.g. parents)– Send individuals reminders to contribute to own

(others?) pensionEarly stage ideas – need focus grouping, discussion

with industry partners!

Team and staffing

• Include information for team and program information, but not to be presented

Budget

• Include information for team and program information, but not to be presented

Strategies for delivery using trusted / established FI providers - SACCOs- Mobile-based- Others

- Awareness campaigns

- Incorporation into school / radio / SACCO financial ed. curriculum- Text reminders

Intermediate-term outcomes

Awareness of

Knowledge of

Attitudes towards

Increased savings

Treatment Arms (broad)

Sensitization1

Contribution / Access

Structure vs. Flexibility

2

Long-term outcomes

Micro-pension scheme for informal sector

Flexible - Contribution level

/ frequency- Access to savings

Incentives3- Matching

contributions

Take-up/penetration

value of contribution

Increased welfare through smoothing

consumption through life cycle

Payment / disbursemen

t channels

4

Treatment Arms

(specific)

long-term savings/pension system

Using Savings Lotteries to Encourage Financial Security

Zambia Istanbul, May 14, 2015

Intervention Summary• Context: Of Zambian adults (in 2011):

– 10% have contributed to formal savings– 20% have formal bank accounts (low by

income and region comparison)

Intervention Summary• Objective: Developing a culture of savings using prize-linked-savings-accounts

(PLSAs) amongst the broader Zambian population, both banked and unbanked

• What is a PLSA?– A no-fee, no-frills savings “account” with no interest– Held by individuals as 50 ZMK “prize bonds” - like raffle tickets, with unique

numbers – Interest for all PLSA balances is pooled and given monthly to randomly-

selected PLSA bond holders in the form of various cash prizes

• Components to be evaluated:– 1) Behavioral messaging– 2) Bonus incentives for product use– 3) The effect of a mobile payment option

Evaluation Questions

• Take-Up– Is there demand for PLSAs?– Does the demand differ by financial sophistication

or bank account ownership?• Outcomes:– What is the effect of PLSAs on net savings rates? – Do PLSAs generate new savings, or crowd-out

other savings strategies?

Evaluation Questions: Component-Specific

• Component 1: Behavioral Messaging– Type: Does providing social or financial information, or highlighting individual

winners, using behavioral messaging increase take-up and overall savings?– Timing: Does messaging during key times in the year (New Years, Valentine’s

Day, Christmas, etc.) have a greater impact on savings (PLSA or otherwise)?

• Component 2: Bonus Structures and Incentives– Incentives: Do bonus incentives (additional prize bonds) in a PLSA encourage

longer individual holding of prize bonds?

• Component 3: Mobile-Access– Phone Outreach: Does the ability to purchase and redeem PLSA prize bonds

on your mobile phone increase purchase? And for who?

Evaluation Design• Use planned World Bank Financial Capability (WBFC) survey as a baseline

on financial knowledge, skills, attitudes, and behavior

• National-level rollout of a prize-linked account, through ZamPost (over 200 branches)

• Interventions using a 2x2x2 design:– Behavioral interventions (text messages with behavioral motivations): Yes or No– Incentives (for keeping a prize bond for X months): Prize Bond Bonus or None– Mobile Access (ability to buy prize bonds using phone credit): Yes or No

• Identification: Changes in savings outcomes from detailed baseline to follow-up surveys; aggregate uptake; banking behavior if possible

• Behavioral interventions (text messages with behavioral motivations):

Treatment Idea

“A ZamPost prize bond

winner just won 3,000

ZMK in your town. Get

one today at

ZamPost!”

Evaluation Design

Treatment Idea

“234 ZamPost prize

bonds have resulted in

big wins for Zambians

like you! Get yours

today at ZamPost!”

Treatment Idea

“Did you know? If you

buy five ZamPost prize

bonds each week, you

can pay for children’s

school fees in January

with your balance!”

• Incentives (for keeping prize bonds for X months):

Treatment Idea

“You have been selected for

a ZamPost prize bond

bonus! If you buy 10 prize

bonds today and keep them

for at least 6 months, you

will win 5 fre

e prize bonds!”

Evaluation Design

• Mobile Access (text message with opportunity to buy bonds with airtime):

Treatment Idea

“Buy ZamPost prize

bonds through your

mobile with airtime!

Send a text to 123456

to buy one today!”

Evaluation Design

Sample and data• Of 5,000 people in WBFC baseline (a nationally-representative

sample of adults in Zambia), we expect 4,000 to have phones, of whom we expect ~70% will agree to participate– Sample: 2,800 Zambians with (active) phone numbers

• Data: phone numbers, account activity on phones, prize bond balances, assets/liabilities from baseline and follow-up

Timeline• Sept-Dec 2015: Planned WBFC Baseline Survey data collection

• Jan-Apr 2016: PLSA Rollout via ZamPost

• Jun 2016: Follow-Up Phone Survey with recruited WBFC respondents

• Jul 2016- Jun 2018: Intervention Implementation

• Sep 2018: More Detailed Follow-Up Survey (based on WBFC survey) on sample of WBFC respondents

TheEnd…

of the low-savings culture in Zambia!

Targeting the ultra poor

AfghanistanIstanbul, May 14, 2015

Evaluation Questions1. What is the impact of the TUP program on assets, income, health, education, psychological well-being, social acceptance?

2a. How effective is the targeting of the ultra poor program in terms of errors of inclusion (including non-ultra poor households) and errors of exclusion (not including some truly ultra poor households)?

2b. How do impacts vary by household characteristics and what are the optimal characteristics to target ultra poor households in the future?

3. Is there a benefit from offering beneficiaries an opportunity to choose a unique asset (other than from the livestock menu)?

Evaluation Design1

Within village randomization (1,500 T, 1,500 C)

Standard RCT design (compare T vs. C)

2a

T

TC

C

N

N

• Survey Treatment and Control (3,000 – baseline survey)

• Survey Not eligible (2,000? – additional survey)

• Errors of inclusion: are any in T or C much better off than in N?

• Errors of exclusion: how many in N meet eligibility criteria? How do they compare to T and C?

T

TC

C

N

N

Village A

Village B

Lottery

T

TC

C

Evaluation Design

2b• Evaluate impact of TUP program for specific sub-groups (e.g., psychological

well-being (or stress) at baseline, etc.)• Identify groups that benefit more or less from program

3

1,500 C 1,500 T

750 T

750 T• Choose from standard

menu (cows, sheep, goats, chickens)

• Randomly select 750 beneficiaries

• Can propose a different asset (subject to approval)Lottery

Système de récépissés d’entrepôt (Warehouse receipt system)

SénégalIstanbul, 14 mai 2015

Résumé des interventionsObjectif: Contribuer à la commercialisation des produits agricoles au Sénégal par un accroissement de l’accès au financement des acteurs des chaînes de valeur en mettant en place un système de récépissé d’entrepôt (SRE).

Sensitization and training

1- Cadre legal et réglementaire; 2-

Organe de régulation

3- Sensibilisation et formations des acteurs

4- Appui au secteur de l’entreposage

5- Dialogue sur une plateforme d’échange

de récépissés

Questions d’évaluation• Quel est l’impact sur les producteurs de riz d’avoir

accès au système de récépissé d’entrepôt (warehouse receipt system) sur:– l’accès au crédit – les pertes post-récolte– les revenus

• Quelles sont les modalités de gestion du système de récépissé d’entrepôt les plus efficaces (par ex. modalités de paiement de service, paiements, contrôle qualité, partenariat public-privé, etc.)

Design de l’évaluationStratégie à court terme: utilisation des capacités existantes• Population cible: 200 groupements (sur 3 000) situés dans un

périmètre où il y a un entrepôt mais qui n’y ont pas accès• Tirage au sort: 100 en groupe de traitement et 100 en groupe

de contrôle• Seuls 20% des espaces de stockage sont affectés pour

l’évaluationStratégie moyen & long-terme• Inclure les nouveaux entrepôts dans l’évaluation• Influer sur l’implantation de nouveaux magasins pour étudier

l’impact sur le marché local

Échantillon et données• Échantillon: 200 groupements de producteurs (100

en traitement et 100 en contrôle)• Phasage de l’évalutation en fonction de la

construction de nouveaux entrepôts• Données: enquête de référence (baseline study) et

de follow-up: – Groupements de producteurs et autres acteurs de la

chaîne de valeur riz – Entrepôts – Secteur financier– Marchés

Chronogramme

• Janvier à mai 2016: enquête de référence, tirage au sort

• Juillet 2016: démarrage de l’opérationnalisation du SRE

• Juillet 2017: enquête de suivi • Enquêtes supplémentaires en fonction des

nouveaux entrepôts

Merci!

Theory of changeUtilisation du récépissé

d’entrepôtProfessionalisation du

secteur de l’entreposage

Hausse de l’accès au crédit

Financement d’opérations agricoles

Réduction des pertes post-récoltes

Amélioration du pouvoir de négociation

Accroissement des volumes

commercialisables

Obtention de meilleurs prix / diminution du risque de

bradage