Understanding cash transfers for small businesses

“the time frame over which we measure results matters a lot here – this is my concern with some of the literature on cash grants – if it is just accelerating the transition to an equilibrium, then if we measure results too soon, we overestimate the impacts”

David McKenzie, writing in the Development Impact blog – reports on two studies that looked at the impact of cash transfers to small businesses: one in Ghana and one in Sri Lanka. Both the studies seem to suggest that mere cash transfers may not result in the best outcomes possible, especially when looking at a time horizon longer than two years. In particular for small businesses, this is an important where one needs to consider not just the impacts of a short-term injection of cash, but the sustainability of interventions.

Looking forward to more on this topic

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