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Matching grants and economic activities among horticultural entrepreneurs: Long-term evidence from Rwanda

Author

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  • Hossain, Marup
  • Mabiso, Athur
  • Garbero, Alessandra

Abstract

Matching grants can boost economic activities of small-scale producers by relaxing their credit or risk constraints. This study evaluates the impacts of a matching grants scheme targeted to horticultural enterprises in Rwanda. The intervention scores and endorses a business proposal if the proposal scores above the cut-off endorsement score. Following endorsement, if an entrepreneur receives and repays 50% of a loan taken for the proposed activity, the program matches the rest of the 50% of the loan. Using a fuzzy regression discontinuity design, we show that the overall intervention increases horticultural income of the households just above the endorsement cut-off compared to the households just below the cut-off. The intervention also increases wage and service income, labor employment, and asset holdings of the beneficiary households. Our results indicate that matching grants interventions can have long-term positive impacts on the livelihoods of small-scale producers.

Suggested Citation

  • Hossain, Marup & Mabiso, Athur & Garbero, Alessandra, 2022. "Matching grants and economic activities among horticultural entrepreneurs: Long-term evidence from Rwanda," World Development, Elsevier, vol. 150(C).
    • Handle: RePEc:eee:wdevel:v:150:y:2022:i:c:s0305750x21003272
    DOI: 10.1016/j.worlddev.2021.105712
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis

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