There is increased awareness that success among small-scale entrepreneurs in developing countries requires more than microfinance, and that an important limiting factor for business growth is the level of human capital among the entrepreneurs. The present paper uses a randomized control trial to evaluate a business training program in Tanzania. Our results show that there is a positive average treatment effect on business knowledge. It also appears that training has a stronger effect on the entrepreneurs with less formal education. Paradoxically, these entrepreneurs are also less consistent in their participation in the training program. An important implication from our study is therefore that when providing business training, special care should be given to ensure high participation rates.

Bertil Tungodden

Associated Senior Researcher