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Short-Term Impacts of Formalization Assistance and a Bank Information Session on Business Registration and Access to Finance in Malawi

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World Bank (WB)

Abstract: Despite regulatory efforts designed to make it easier for firms to formalize, informality remains extremely high among firms in Sub-Saharan Africa. In most of the region, business registration in a national registry is separate from tax registration. This paper provides initial results from an experiment in Malawi that randomly allocated firms into a control group and three treatment groups: a) a group offered assistance for costless business registration; b) a group offered assistance with costless business registration and (separate) tax registration; and c) a group offered assistance for costless business registration along with an information session at a bank that ended with the offer of business bank accounts. The study finds that all three treatments had extremely large impacts on business registration, with 75 percent of those offered assistance receiving a business registration certificate. The findings offer a cost-effective way of getting firms to formalize in this dimension. However, in common with other studies, information and assistance has a limited impact on tax registration. The paper measures the short-term impacts of formalization on financial access and usage. Business registration alone has no impact for either men or women on bank account usage, savings, or credit. However, the combination of formalization assistance and the bank information session results in significant impacts on having a business bank account, financial practices, savings, and use of complementary financial products.
Type: Working Paper
Publications & Research :: Policy Research Working Paper
Publications & Research
Link: http://documents.worldbank.org/curated/en/2015/01/23922000/short-term-impacts-formalization-assistance-bank-information-session-business-registration-access-finance-malawi
http://hdl.handle.net/10986/23653
Subject: ACCESS TO BANK ACCOUNTS
ACCESS TO CREDIT
ACCESS TO EXTERNAL FINANCE
ACCESS TO FINANCE
ACCESS TO FINANCIAL SERVICES
ACCESS TO INSURANCE
ACCESS TO MARKETS
ACCESS TO SAVINGS
ACCOUNT
ACCOUNT USAGE
ACCOUNTS
ADMINISTRATIVE RECORDS
BANK ACCESS
BANK ACCOUNT
BANK ACCOUNTS
BANK LOAN
BANK LOANS
BANKS
BILLS
BORROWING
BRIBE
BUSINESS ACTIVITIES
BUSINESS CENTERS
BUSINESS DEVELOPMENT
BUSINESS DEVELOPMENT SERVICES
BUSINESS ENABLING
BUSINESS ENABLING ENVIRONMENT
BUSINESS ENVIRONMENT
BUSINESS EXPENSES
BUSINESS FACILITATION
BUSINESS FINANCES
BUSINESS INFORMATION
BUSINESS LOAN
BUSINESS OWNER
BUSINESS OWNERS
BUSINESS PERFORMANCE
BUSINESS PLAN
BUSINESS PURPOSES
BUSINESS REGISTRATION
BUSINESS RESOURCES
BUSINESS TRAINING
BUSINESSES
CASH DEPOSITS
CC
CERTIFICATE
CERTIFICATES
CHAMBER OF COMMERCE
COLLATERAL
CONTACT INFORMATION
COST SAVINGS
CREDIT ASSOCIATION
DEBT OUTSTANDING
DEPRECIATION
DIRECT COSTS
EARNINGS
ECONOMIC ACTIVITY
ECONOMIC GROWTH
EDUCATION LEVELS
ELECTRICITY
ENABLING ENVIRONMENT
ENTERPRISE DEVELOPMENT
ENTREPRENEUR
ENTREPRENEURS
EXCHANGE RATE
FARM ENTERPRISES
FEDERAL TAXES
FEMALE BUSINESS
FEMALE ENTREPRENEURS
FINANCIAL ACCESS
FINANCIAL INSTITUTION
FINANCIAL INSTITUTIONS
FINANCIAL LITERACY
FINANCIAL PERFORMANCE
FINANCIAL PRODUCTS
FINANCIAL SERVICES
FINANCING NEED
FIXED ASSETS
FORMAL BANK
FORMAL FINANCIAL SECTOR
FORMAL SAVINGS
GENDER
GENDER DIFFERENCE
GENDER EQUALITY
GENDER GAP
GENDER GAPS
GREATER ACCESS
HARDWARE
HOUSEHOLD FINANCES
HUMAN RESOURCES
IDENTIFICATION NUMBER
IMPACT EVALUATION
INCOME TAX
INDIVIDUAL ENTREPRENEURS
INFORMAL ECONOMY
INFORMAL FINANCIAL INSTITUTIONS
INNOVATION
INNOVATIONS
INSPECTION
INSPECTIONS
INTEREST RATE
INTERNATIONAL BANK
INTERNATIONAL FINANCE
LACK OF ACCESS
LICENSE
LICENSES
MANUFACTURING
MIDDLEMAN
MINIMUM BALANCE
NEW BUSINESS
NEW PRODUCTS
ONE-STOP SHOP
OPEN ACCESS
OUTREACH
OUTSTANDING DEBT
PHOTO
PRIVATE ENTERPRISE
PRIVATE SECTOR
PRIVATE SECTOR DEVELOPMENT
PROCUREMENT
PROJECT MANAGEMENT
PROTOCOL
RECEIPTS
REGISTRATION APPLICATION
REGISTRATION OF BUSINESS
REGISTRATION PROCESS
REGISTRATION PROCESSES
REGISTRY
REPORTING
RESULT
RESULTS
SALES
SAVINGS ACCOUNTS
SAVINGS PRODUCT
SELLING
SMALL BUSINESS
SMALL ENTERPRISES
SUBSTITUTES
TECHNICAL ASSISTANCE
TECHNICAL ASSISTANCE PROJECT
TERM CREDIT
TRANSACTION
TRANSACTION COSTS
TURNAROUND TIME
VERIFICATION
WOMEN ENTREPRENEURS
WOMEN ENTREPRENEURSHIP
AFRICA GENDER POLICY
GENDER INNOVATION LAB
WOMEN AND PRIVATE SECTOR DEVELOPMENT




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