FINCA Perú — Entrepreneurship Training Embedded in Village-Bank Meetings

FINCA Perú, a village-banking microfinance institution serving poor, largely female clients in semi-urban Ica and Ayacucho, added a 22-session entrepreneurship curriculum to the regular weekly or monthly meetings of village banks, covering topics such as client treatment, pricing, sales locations and reinvesting profits.

The programme aimed to test whether embedding low-cost business training into existing microfinance meetings could improve clients' business outcomes and the lending relationship itself.

A randomised design assigned 239 village banks (4,591 clients) to mandatory training, voluntary training, or a comparison group continuing standard loan meetings; researchers achieved a 76% follow-up rate about two years later.

The training measurably improved the microfinance relationship: client dropout fell by 4 percentage points (59% versus 63% in the comparison group) and perfect loan repayment rose by 3 percentage points, alongside better record-keeping and knowledge of profit reinvestment. But on the outcomes the training targeted directly, researchers found little or no evidence of change in overall business revenue, profits or employment, despite some positive signals in specific months. FINCA's own delivery cost rose by about 10%, which the authors judged offset by the retention and repayment gains.

The case is included as an honest example of a rigorously evaluated, low-cost training add-on that clearly helped the lending institution (retention, repayment) without a demonstrated effect on the core goal of raising clients' business profits — a common and important finding in the microenterprise-training literature.