Previous work in Sri Lanka has found very low returns to capital for female-owned microenterprises, which appears to be in part due to women operating businesses in female-dominated industries with low efficient scale and little scope for growth. This project aims to evaluate the role of business training and capital in getting women who are thinking about starting a business to start it in industries with greater scope for growth, and getting women in these low return industries to switch to more profitable sectors.
Separate business training courses are being offered to randomly-selected out of the labor force women who express an interest in entering the labor force in the next year, and to randomly-selected women currently in business in female-dominated low-return occupations. Half of those who complete the training will also receive a cash grant. One of the innovations of this work is not working with the existing clientele of a microfinance organization, but rather in seeing what the returns to such services are to the average poor woman. This informs us of the potential demand for such services, and can help identify the segments of the population not currently well-served by existing institutions.