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Can Business Grants Mitigate a Crisis ? Evidence from Youth Entrepreneurs in Kenya during COVID-19

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  • Domenella,Yanina Eliana
  • Jamison,Julian C
  • Safir,Abla
  • Zia,Bilal Husnain

Abstract

COVID-19 was a major shock to youth entrepreneurs and their businesses in Kenya. This paperstudies the causal impact of grants—worth two months of baseline business revenue—and business development servicesas potential mitigation measures. Using multiple rounds of phone surveys up to seven months from the start of thepandemic, the analysis finds that youth who are assigned business grants or a combination of grants and businessdevelopment services are significantly more likely to maintain a business, earn more revenue and profits, retainemployees, and report higher confidence and satisfaction with life. There are no corresponding effects of businessdevelopment services alone, although the follow-up period is extremely short for training effects to materialize. Theseresults suggest that cash infusion for young entrepreneurs in times of an aggregate shock can be instrumental inmoderating its immediate harmful impacts.

Suggested Citation

  • Domenella,Yanina Eliana & Jamison,Julian C & Safir,Abla & Zia,Bilal Husnain, 2021. "Can Business Grants Mitigate a Crisis ? Evidence from Youth Entrepreneurs in Kenya during COVID-19," Policy Research Working Paper Series 9874, The World Bank.
    • Handle: RePEc:wbk:wbrwps:9874
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    References listed on IDEAS

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    1. Bottan, Nicolas & Hoffmann, Bridget & Vera-Cossio, Diego A., 2021. "Stepping up during a crisis: The unintended effects of a noncontributory pension program during the Covid-19 pandemic," Journal of Development Economics, Elsevier, vol. 150(C).
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    1. Campos, Francisco & Hernandez-de-Benito, Maria & Jamison, Julian C. & Safir, Abla & Zia, Bilal, 2025. "Persistent yet ameliorable shocks to female entrepreneurship: Experimental evidence from Kenya," Journal of Development Economics, Elsevier, vol. 177(C).

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