Does the lack of peers contribute to the observed gender gap in entrepreneurial success, and is the constraint stronger for women facing more restrictive social norms? We offered two days of business counseling to a random sample of customers of India’s largest women’s bank. A random subsample was invited to attend with a friend. The intervention had a significant immediate impact on participants’ business activity, but only if they were trained in the presence of a friend. Four months later, those trained with a friend were more likely to have taken out business loans, were less likely to be housewives, and reported increased business activity and higher household income. The positive impacts of training with a friend were stronger among women from religious or caste groups with social norms that restrict female mobility.
Borrowing Behaviour: Whether a SEWA loan was taken and what type (personal, business, home repair, and amount), whether a non-SEWA loan was taken and the amount, problem repaying loans, whether a deposit was made in SEWA (or non-SEWA) account in past 30 days, amount of deposits in SEWA (or non-SEWA) account in past 30 days. Business Behaviour: Business inputs (hours worked, earnings saved for business investment), revenue expansion, cost reduction, business activity and sales. Client Well-being: Household income, expenditures, whether client earns own income, whether client is a housewife.
Women who attend business training with a friend are able to expand their businesses and increase household earnings and expenditure, as measured at the 4-month follow-up. Participants in the train with a friend group doubled their demand for loans and significantly expanded their business activity and household income. The greatest effects were observed for women belonging to the most restrictive social groups. Also, simply encouraging women to focus on concrete goals in the presence of a friend increased demand for bank loans.