The Profits of Wisdom: The Impact of a Business Support Program in Tanzania

Business training programs in low-income settings have shown only limited impacts on firm revenues and profits, particularly for female entrepreneurs. A randomized design was used to compare the impacts of two types of business training programs targeting women with established small businesses in urban Tanzania. The basic version relied on in-class sessions to strengthen the participants' managerial and technical skills. In the enhanced version, training was supplemented by visits from business coaches to the sites of participants' activities, as well as other services tailored to their individual needs. The basic training had no impact on business practices or outcomes. The enhanced training positively impacted the adoption of new practices but had no effects on revenue or profits. However, the average masks large heterogeneous effects: only more experienced entrepreneurs benefited from the program. This finding suggests that more careful targeting can improve the impact of business training programs.