Re:BUiLD Wave 1 RCT Research Brief

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Micro-entrepreneurship is a common form of livelihood in urban settings in developing countries, where formal employment opportunities are scarce. There is mixed or little evidence on whether programs that promote microentrepreneurial activity are effective, especially for women and vulnerable populations like refugees. Researchers partnered with the International Rescue Committee (IRC) as a part of the Refugees in East Africa: Boosting Urban Innovations for Livelihoods Development (Re:BUiLD) program to study how cash grants alone and in combination with business mentorship influence economic and psychological outcomes for aspiring refugee and Kenyan microentrepreneurs. The program was implemented as a Randomized Controlled Trial (RCT).

We found that: 

  • Cash alone and cash alongside mentorship had a large and statistically significant effect on business outcomes in the short and medium term (up to 9 months after enrollment). 
  • On average, all treatment arms increased participants’ likelihood of operating a business, time spent on the business, the value of their productive assets, and monthly business profits. The largest returns accrued to participants who started the program without a business and open a new business as a result of the program. 
  • Neither cash alone nor cash alongside mentorship improved business outcomes for refugee women. These women were no more likely to operate a business or spend time on their business relative to their counterparts in the control condition. On average, refugee women invested a substantively smaller amount of their cash grant in productive assets compared to other participants in the program. All together, we observed no difference in the overall business profits of refugee women as compared to the control. 
  • Exploratory analyses suggest that these observed results may be due to the high rates of business ownership among refugee women at baseline and the challenges with growing existing micro and small enterprises. These constraints may have limited their opportunities both as micro-entrepreneurs and in the larger labor market. 
  • The mentorship component alongside the cash grant provided modest economic and psychological benefits to specific subgroups. Mentorship plus cash were the treatments that uniquely increase business profits for Kenyan men relative to the control condition. We observed expected gains in well-being when participants