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

2015; Linguagem: Inglês

10.1596/1813-9450-7183

1813-9450

Francisco Campos, Markus Goldstein, David McKenzie,

Taxation and Compliance Studies

No AccessPolicy Research Working Papers14 Apr 2015Short-Term Impacts of Formalization Assistance and a Bank Information Session on Business Registration and Access to Finance in MalawiAuthors/Editors: Francisco Campos, Markus Goldstein, David McKenzieFrancisco Campos, Markus Goldstein, David McKenziehttps://doi.org/10.1596/1813-9450-7183SectionsAboutPDF (0.8 MB) ToolsAdd to favoritesDownload CitationsTrack Citations ShareFacebookTwitterLinked In 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. Previous bookNext book FiguresreferencesRecommendeddetailsCited byThe bright side of formalization policies! Meta-analysis of the benefits of policy-induced versus self-induced formalizationApplied Economics Letters, Vol.28, No.2025 January 2021Leveraging digital technologies to boost productivity in the informal sector in Sub‐Saharan AfricaReview of Policy Research, Vol.38, No.69 August 2021Women, Entrepreneurship, and Economic Development in Africa29 October 2021Introduction: Gendered Perspectives on Covid-19 Recovery in Africa—Towards Sustainable Development3 January 2022Women Economic Empowerment and Post-pandemic Recovery in Africa: Normalising the "Un-Normal" Outcome of Covid-193 January 2022Business registration and firm performance: a case of maize traders in MalawiDevelopment in Practice, Vol.30, No.714 May 2020Increasing Informal Sector Productivity10 August 2020Women, Entrepreneurship, and Economic Development in Africa20 November 2019Small Firm Death in Developing CountriesThe Review of Economics and Statistics, Vol.101, No.41 October 2019Business Formalisation in VietnamThe Journal of Development Studies, Vol.55, No.511 June 2018Governance and Women's Economic and Political Participation: Power Inequalities, Formal Constraints and NormsWorld Bank Research Observer, Vol.34, No.110 September 2019Annals of Contemporary Developments in Management & HR, Vol.1, No.3On the effect of the costs of operating formally: New experimental evidenceLabour Economics, Vol.45Can Enhancing the Benefits of Formalization Induce Informal Firms to Become Formal? Experimental Evidence from Benin4 January 2017The Effect of One-On-One Assistance on the Compliance with Labor Regulation. A Field Experiment in Extremely Vulnerable SettingsSSRN Electronic JournalFinding a Path to Formalization in Benin: Early Results after the Introduction of the Entreprenant Legal Status6 January 2016On the Effect of the Costs of Operating Formally: New Experimental EvidenceSSRN Electronic Journal View Published: January 2015 Copyright & Permissions Related RegionsAfricaRelated CountriesMalawiRelated TopicsFinance and Financial Sector DevelopmentGenderPrivate Sector Development KeywordsINFORMALITYBUSINESS REGISTRATIONBANK ACCOUNTSFINANCIAL ACCESS, SMALL ENTERPRISES PDF DownloadLoading ...