Micro-enterprise

About: Micro-enterprise is a research topic. Over the lifetime, 339 publications have been published within this topic receiving 4614 citations. The topic is also known as: microbusiness.

Savings Constraints and Microenterprise Development: Evidence from a Field Experiment in Kenya

Abstract: Does limited access to formal savings services impede business growth in poor countries? To shed light on this question, we randomized access to noninterest-bearing bank accounts among two types of self-employed individuals in rural Kenya: market vendors (who are mostly women) and men working as bicycle taxi drivers. Despite large withdrawal fees, a substantial share of market women used the accounts, were able to save more, and increased their productive investment and private expenditures. We see no impact for bicycletaxi drivers. These results imply significant barriers to savings and investment for market women in our study context. (JEL D14, G21, J16, J23, O12, O14, O16)

Does the Classic Microfinance Model Discourage Entrepreneurship Among the Poor? Experimental Evidence from India †

Abstract: Do the repayment requirements of the classic microfinance contract inhibit investment in high-return but illiquid business opportunities among the poor? Using a field experiment, we compare the classic contract which requires that repayment begin immediately after loan disbursement to a contract that includes a two-month grace period. The provision of a grace period increased short-run business investment and long-run profits but also default rates. The results, thus, indicate that debt contracts that require early repayment discourage illiquid risky investment and thereby limit the potential impact of microfinance on microenterprise growth and household poverty. (JEL A21, G32, I32, L25, L26, O15, O16)

Commercialization and mission drift : the transformation of microfinance in Latin America

Abstract: Nowhere has the commercialization of microfinance proceeded more rapidly than in Latin America. A few years ago, microfinance was the exclusive domain of non-profit organizations and cooperative societies. Today, commercial banks provide 29 percent of the funds that go to micro-enterprises. This paper addresses the impact of commercialization on the strategy and performance of microfinance institutions (MFIs) in Latin America. It explores the key elements of a commercial approach to microfinance and examines the microfinance landscape in Latin America, and the different players in the field. It evaluates the profitability of Latin American microfinance and the impact of, as well as the responses to, competition. Finally, an important objective of this paper is to evaluate the major achievements of microfinance in Latin America not only against the initial mission of many microfinance institutions in the region-to generate employment and develop entrepreneurship-but also against the mission of providing financial services to a target group composed of the poorest of the working poor.

Promoting innovation in developing countries: a conceptual framework

Abstract: The author provides a conceptual framework for approaching the promotion of technological innovation and its diffusion in developing countries Innovation climates in developing countries are, by nature, problematic, characterized by poor business and governance conditions, low educational levels, and mediocre infrastructure This raises particular challenges for the promotion of innovation The latter should be understood as the diffusion of technologies-and related practices-which are new to a given context (not in absolute terms) What matters first is to provide the necessary package of support-technical, financial, commercial, legal, and so on-with flexible, autonomous agencies adapting their support and operations to the different types of concerned enterprises Facilitating and responding to the emergence of grass-root needs at the local level is also essential Support to entrepreneurs and local communities should be primarily provided in matching grant forms to facilitate the mobilization of local resources and ownership It is of primary importance to pay the greatest attention to country specificities, not only in terms of development level, size, and specialization, but also in terms of administrative and cultural traditions At the global level, major issues need also to be considered and dealt with by appropriate incentives and regulations: the role of foreign direct investment in developing countries' technological development, conditions of technologies' patenting and licensing, the North-South research asymmetry, and brain drain trends