Absence of conflict of interest.
Citation
Highlights
- The study's objective was to examine the impact of Grameen America on employment outcomes.
- The study was a randomized controlled trial that assigned participants to either the treatment or control group. Using survey data, the authors conducted statistical analyses to compare outcomes between the treatment and control group six months after program enrollment.
- The study found that, compared to the control group, significantly more Grameen America participants owned a business and significantly fewer were working for an employer while not owning one's business.
- This study receives a high evidence rating. This means we are confident that the estimated effects are attributable to Grameen America and not to other factors.
Intervention Examined
Grameen America
Features of the Intervention
The Grameen Bank microfinance (microlending) model to support low-income women entrepreneurs was first launched in Bangladesh in the 1970s. In 2008, Grameen America opened a branch in Queens, NY. As of September 2018, there were 20 branches in 13 cities across the United States.
The Grameen model uses word-of-mouth and social networking to recruit participants, who are asked to form loan groups of five women, all of whom know each other, live close to each other, and operate or are interested in starting their own business. The groups complete a five-day course of training on business loans and each member is then eligible to apply for a small loan that she repays over about six months. Once all group members have repaid their initial loans, they can apply for subsequent loans. Multiple loan groups form "centers" that meet weekly to offer a forum for ongoing financial training, mutual aid, and loan payment collection. The intervention is designed to serve women whose incomes are below the federal poverty line and who operate or are interested in starting their own business.
Features of the Study
The study took place at Grameen America's Union City, NJ branch. The study used a randomized controlled trial to assign the loan groups to either the treatment or control condition. About 70 percent of the participants were assigned to the treatment group, and about 30 percent were assigned to the control group. Across all participants (1,492 participants in 300 loan groups), the average age at enrollment was 41 years old, average annual income was $18,655, and almost all (98.5%) identified as Hispanic/Latina. The treatment group received the planned intervention. Those assigned to the control condition did not receive any training or other services from Grameen America and were not eligible to apply for business loans from Grameen America.
The authors administered surveys six months after the women enrolled in Grameen America to assess employment status and business ownership outcomes. Among the six-month survey completers, there were 845 treatment group members and 351 control group members. The authors conducted a statistical analysis to compare employment and business ownership outcomes between the treatment and control groups.
Findings
Employment
- The study found that the Grameen America group was significantly more likely than the control group to report current business ownership.
- The study also found that the Grameen America group was significantly less likely than the control group to only work for an employer (and not own a business).
- No other significant differences were found between the Grameen America and control groups.
Considerations for Interpreting the Findings
The six-month survey data in this report were collected over a long window (six to 19 months after enrollment, with most collected from six to ten months after enrollment).
Causal Evidence Rating
The quality of causal evidence in this report is high because it is based on a well-implemented randomized controlled trial. This means we are confident that the estimated effects are attributable to Grameen America and not to other factors.