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Business training doubled borrowing among upper-caste Hindu women, increasing loan take-up by 13 percentage points (p < 0.05) from a control mean of 17%, while causing a statistically insignificant reduction in savings (-315.32 rupees), confirming that training activates credit demand rather than merely increasing capital supply.
Grace period clients exhibited 6.0% higher short-run business investment, nearly 3 times higher rates of new business formation (2.0% control vs 4.6% treatment), 41.0% higher weekly profits, 19.5% higher monthly household income, 81.0% higher business capital, and an 11.0% to 13.0% monthly return on capital, alongside default rates that were 6 to 9 percentage points higher (5.4% default vs 1.6% control at 24 weeks).
An initial investment differential of 6.0% (Rs 383.9) compounded over 36 months at a net monthly return differential of 2.0% (6.0% vs 4.0%) produces a Rs 23,000 capital stock gap, matching the observed Rs 23,600 empirical difference at endline [1, 2].
Business training increased the likelihood of taking a loan by 13 percentage points (p < 0.05) and boosted labor market activity by 19 percentage points (a 25% increase, p < 0.01) among upper-caste Hindu women [7-9]. In contrast, the treatment effect on earning business income was 37 percentage points lower for Scheduled Caste women (p < 0.001) and 22 percentage points lower for Muslim women (p < 0.05), demonstrating a non-monotonic impact across restriction tiers [3, 8].
Entrepreneurs ranked in the top third by peers achieved monthly returns of 24% to 30% on cash grants (around 3 times the average return of 10% to 11%), and combining observable traits with peer information yielded 38% monthly returns [9, 10].
The grace period contract increased monthly profits for risk-averse clients (48.5% of the sample) by 92.0% (Rs 1,207.7 to Rs 1,543.6 higher profits, p < 0.05), whereas risk-loving clients experienced no statistically significant additional profit gain (interaction coefficient -Rs 1,243.5 to -Rs 1,557.9).