Mentors or Teachers? Local Mentorship Outperforms Classroom Training for Nairobi's Dandora Microentrepreneurs

Dandora, a densely populated informal settlement northeast of Nairobi, was the setting for a 2014-2016 randomized controlled trial by Wyatt Brooks, Kevin Donovan and Terence Johnson, published in the American Economic Journal: Applied Economics. The study recruited 372 female microenterprise owners under age 40 who had been running their business for less than five years, to isolate whether the type of business information — general classroom instruction or localized, one-on-one mentorship — matters for microenterprise growth.

To test, through random assignment, whether formal classroom business training or one-on-one mentorship from a locally matched, successful entrepreneur has a greater effect on microenterprise profits.

Participants were randomly assigned to a formal business-skills classroom course delivered through Strathmore University Business School, or to one-on-one mentorship from an experienced, successful local entrepreneur matched from the same community. Outcomes were tracked over four follow-up surveys spanning 17 months.

Mentored entrepreneurs reported weekly profits 20% higher than the comparison group and were 18.7 percentage points (30%) more likely to have switched suppliers — evidence they acted on specific, locally relevant advice. Classroom-trained entrepreneurs changed documented behaviour (86% kept formal records, a 19-percentage-point rise over the comparison group) but showed no significant effect on profits.

The authors' own reading is cautionary: mentorship's profit gains were front-loaded and faded once the mentor-mentee relationship ended, and one-on-one matching is inherently harder to scale than a standardized course. The comparison shows that access to specific, localized knowledge — not information in the abstract — was what moved profits in this setting, but also that the gains were not built to last without ongoing support.