The Plus in Credit-Plus-Technical Assistance: Evidence from a Rural Microcredit Programme in Bolivia

Microfinance institutions traditionally focus on the provision of credit and other financial services. In light of recent evidence on the scant transformative effects of 'standard' microcredit models, however, some lenders are increasing efforts to offer additional non-financial services - such as business trainings and technical assistance. While literature on the effects of business trainings is quite voluminous, far less attention has been paid to microcredit in combination with technical assistance, especially salient in rural contexts. This study investigates a programme launched by Sembrar Sartawi, a Bolivian MFI, which complemented dairy farming credit with the provision of agronomic and veterinarian expertise. We collect data of approximately 600 dairy farmers from the Bolivian plateau over two data-collection waves, and conduct a variety of cross-sectional and panel regression analyses. We find that technical assistance has positive, statistically significant, and economically salient impacts on monthly revenues and milk production. Our study strongly suggests that providing access to technical assistance can be a very effective 'plus' instrument for MFIs providing financial services to rural clients. We also point at the importance of conducting further research related to cost-effectiveness, to assess whether MFIs may expand technical assistance and at the same time achieve self-sustainability.