# **1 Introduction**

Developing countries are the home to millions of microenterprises, which provide an important source of income for the poor. For example, the Mexican Economic Census found 4.1 million firms with zero to ten workers (INEGI, 2016). Many governments and NGOs offer business training programs to try to help owners of these firms improve their business practices and increase their incomes. A recent meta-analysis of business training experiments found statistically significant, but modest, average impacts of a 4.7 percent improvement in sales and 10.1 percent improvement in profits (McKenzie, 2021). The most typical training programs take place in-person in classroom settings, requiring groups of 20-30 business owners to travel to a common location for several days, with an average cost of $177 per participant (Van Lieshout and Mehtha, 2017). This raises questions and skepticism about the cost-effectiveness and scalability of such programs (e.g. Fox and Thomas (2016)), and how they can be expanded to a scale where they can reach thousands or millions of firms.

Digital technology offers the potential to both lower the costs of delivering training, and to enable it to be scaled across a wider geographic area. However, experience in developed countries with asynchronous voluntary learning on massive open online courses (MOOC) platforms such as Coursera shows incredibly large drop-out rates (Rivard, 2013). Moreover, poor entrepreneurs in a developing country setting may face further technological obstacles in accessing online training. Reich and Ruipérez-Valiente (2019) note that almost all of the pre-pandemic growth in MOOC registration and certification came from high-income countries. An alternative to self-paced asynchronous courses without any human interaction is to hold video-based synchronous courses that mimic the format of in-person training, while allowing for remote delivery. The rise of Zoom and other video meeting platforms opens up this possibility, but raises three key questions: how feasible is this with microenterprise owners in a developing country setting? How much of a cost-saving is achieved by offering live classes via Zoom? And is remote training effective in improving business practices and performance?

We implement a field experiment with 2,208 female microenterprises recruited via microfinance partner contacts and Facebook advertising throughout Mexico and Guatemala to answer these questions. The recruited businesses are small: 42 percent have no employees, and only 65 percent kept business records at baseline. The main sectors are food, beauty and clothing, and handicrafts. Firms were randomly allocated into a treatment group of 1,513 firms, and control group of 695 firms. The treatment group were offered a business training program taught live in small groups over Zoom in nine 2-hour sessions over 4 weeks, while the control group were provided with four asynchronous online modules. We test both a “top-down” training approach in which the topics are chosen by the implementing NGO, and a “bottom-up” approach in which training topics are requested by the entrepreneurs. In practice these overlap substantially in topics covered and have similar impacts.

We find that it is now technologically feasible to provide business training over Zoom in a developing country setting, with attendance rates not too dissimilar to in-person training. We were able to recruit small businesses from all 32 states in Mexico, and from Guatemala. They were able to connect to classes via their own mobile devices, with few technology issues.

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