In Colombia, we have continued our global tradition of rigorous, applicable research by building foundational research capacity and conducting evaluations in areas of pressing national concern. Examples of our research below offer promising insights into everyday issues for Colombians.
Financial access is critical for the growth of small and medium-size enterprises (SMEs). It allows entrepreneurs to innovate, improve efficiency, expand to new markets, and provide millions of jobs. Yet, in developing countries, the majority of SMEs are unable to acquire the financing they need to reach their potential. Financing SMEs in the developing world can be risky and expensive for lenders, leading to an estimated financing gap of one trillion USD (International Finance Corporation, 2011).
To reduce the credit gap, financial institutions, governments, and donors invest in lending products and policies designed to provide SMEs with the financing they need to grow and innovate. However, the extent to which such programs effectively reduce the barriers to SME financing has generally not been rigorously measured. The SME Program at Innovations for Poverty Action (IPA) rigorously evaluates potential solutions and promotes the most efficient and cost-effective ways to expand access to finance for SMEs.
Lea la version en español aquí.
We design a randomized controlled trial to evaluate the adoption of credit scoring with a bank that uses soft information in small businesses lending. We find that credit scores improve the productivity of credit committees, reduce managerial involvement in the loan approval process, and increase the profitability of lending. Credit committee members’ effort and output also increase when they anticipate the score becoming available, indicating that scores improve incentives to use existing information. Our results imply that credit scores improve the efficiency and decentralize decision-making in loan production, which has implications for the optimal organization of banks.
This document presents the preliminary results of the exploratory phase of the Secured Transaction Reform impact evaluation; the degree to which the inability to use movable assets as collateral seem to limit firms’ access to credit; Financial Institutions’ (FI) expectations on the utility of the new regulation; and the use of the registry since its launch, since February 24th , through September 30th , 2014.
Sexual health problems cause negative externalities from contagious diseases and public expenditure burdens from teenage pregnancies. In a randomized evaluation, we find that an online sexual health education course in Colombia leads to significant impacts on knowledge and attitudes but no impact on selfreported behavior, on average; although fewer STIs are reported for baseline sexually active females. To go beyond self-reported measures, we provide condom vouchers six months after the course to both treatment and control groups and estimate a 9 percentage point treatment effect (52% increase) on the likelihood of redemption. Using knowledge of friendship networks, we document a strong social reinforcement effect: the impacts of the course intensify when a larger fraction of a student’s friends is also treated. In particular, when full sets of friends are treated we find significant reductions in sexually active, frequency of sex, and number of partners. Throughout the analysis we fail to find evidence of cross-classroom spillovers.
Restructuring a traditional cash transfer program in Colombia significantly increased re-enrollment in secondary school without weakening students’ incentives to attend on a daily basis.