The Nigerian Test: When Capital Unlocks Scale

YouWiN! provides a different test of venture-competition rewards from the Swiss case. The Nigerian program screened a large pool of young entrepreneurs, then randomly assigned many screened semifinalists to receive substantial grants. The central question is what that design can identify: whether an integrated competition-and-grant program helped people start and expand firms, and whether the resulting businesses became larger than they would have without the award. The answer is visible not only in survival, but in workers, innovation, sales, and profits.

From mass application to a controlled grant

YouWiN! was a national business-plan competition aimed at creating new businesses and expanding existing ones in Nigeria. It began with 23,844 applications. About 6,000 applicants reached a four-day business-plan training stage, and 2,400 became semifinalists after submitting more detailed plans. This funnel matters because the eventual comparison is not between the average applicant and a winner. It is between people who had already passed several screens and were considered plausible candidates for growth.

The program used more than one kind of selection. Some winners were chosen on merit: the highest-scoring plans nationally or within regional pools received awards. That is a sensible way to run a competition if the goal is to identify the strongest proposals, but it makes a simple winner-versus-loser comparison difficult. A high-scoring winner may outperform a loser because the proposal and entrepreneur were stronger before receiving any money.

The experimental comparison came later. After merit-based national and zonal winners were selected, 1,841 remaining semifinalists entered a stratified lottery. The assignment was structured by region, gender, and whether the applicant proposed a new or existing business. The experimental treatment group contained 729 assigned winners, while 1,112 applicants were assigned to the control group. The control group did not represent people who had failed at the first application stage; it represented screened semifinalists who were not selected for the ordinary-winner award.

That distinction is the foundation of the evidence. Because the lottery made assignment independent of the remaining differences among those semifinalists, the average difference between assigned winners and controls can be interpreted as the effect of being offered the program's award package for that population. It is an intent-to-treat estimate: it measures the effect of assignment, not a claim that every recipient used the grant in exactly the same way or that a grant alone caused every later outcome.

The package was substantial. Winners received awards averaging roughly US$49,000–US$50,000, with payments made in four tranches. The first payments supported working capital and investment; later payments were tied to low sales and employment milestones. Winners also received monitoring and some additional training and mentoring opportunities. This design combined selection, business-plan preparation, capital, conditional timing, and follow-up. The experiment can tell us whether that integrated intervention changed the trajectory of ordinary lottery winners. It cannot cleanly separate the effect of cash from the effect of being trained, monitored, or publicly recognized.

The program's staging also distinguishes a useful counterfactual from a tempting one.