Supporting Micro-enterprise in Humanitarian Programming: Impact evaluation of business grants vs. unconditional cash transfer

Working Paper
Published on 12 October 2021

Abstract

Humanitarian programming in fragile economies often use unconditional cash transfers (UCT) to offset food-insecurity. However, there is an increasing focus on using cash transfers to boost household incomes beyond the short-term through micro-enterprise start-up and growth. This paper conducts a randomized control trial to measure the impact of three different sizes of business grants against UCT in Somalia. We find that giving the same amount of money as a lump-sum business grant results in higher likelihood of business ownership and income compared to UCT in the short run (3-4 months after the transfers). However, the impacts are larger and persist 3 years later only for those who received larger amount of grants. The results indicate our ‘medium’ sized grant being more cost-effective.

Authors

Arays Abdullahi

Save The Children International

Mohamed Kalid Ali

Dalarna University

Elijah Kipchumba

BRAC Institute of Governance and Development

Munshi Sulaiman

Save the Children