Conducting a Baseline Survey to Evaluate the Impact of Providing Vouchers that Make Loan Repayment More Flexible for Eligible Dabi & Progoti Borrowers
BRAC Microfinance Program, Bocconi University and Stockholm University planned to conduct a baseline survey to evaluate the impact of providing vouchers that make loan repayment more flexible for eligible Dabi and Progoti borrowers. The specific aims of this study were to test the impact of introducing a flexible grace period of two months on microfinance borrowers’ repayment behaviour and other related outcomes, as well as the demand for Progoti loans among small and medium sized businesses. The study was conducted among 700 respondents in 21 districts of Bangladesh. The direct and indirect effects of the new loan contract were evaluated through a cluster randomized control trial methodology. In order to do this research a panel data of firms who are BRAC’s current borrowers and are deemed eligible for the new flexible loan contract (eligible firms) and a representative sample of firms who are not BRAC’s current borrowers (non-borrower firms) was collected.
The baseline survey provided information on firm outcomes as well as household wellbeing. Specifically, the survey provided baseline information on business outcomes (profits, revenues, number and characteristics of workers, capital stock), risk aversion, discount factors, impatience (whether present-biased), informal insurance mechanisms, savings, consumption, and household demographics.