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This study examines whether there is a role for microenterprise development as an anti-poverty strategy in the United States. This question is important because skeptical views exist regarding whether, generally, poor Americans would have the enthusiasm to undertake the risk of dealing with small-businesses, especially given that the United States has a public welfare system to take care of the poor and "abundant jobs" for those with the skills. Using data from 14 community-based programs promoting small-business investment through Individual Development Accounts (IDAs), this study finds that, overall, there is a considerable level of interest in saving for and investing in small-businesses among poor Americans, including those who are less advantaged in terms of income poverty and employment. Policy makers should thus consider promoting IDAs/subsidized savings for small-businesses development as a potentially viable strategy to address income poverty and inequality in the United States.

Through a path regression analysis of data from the Vermont Micro Business Development Program, this study examines the relationships between client characteristics, program activities, interim outcomes, and impacts, to understand factors that lead to and mediate client success in microenterprise development programs and as entrepreneurs. Statistics demonstrated excellent model fit to the data. The interim outcome of improved personal well-being was related to more sources of capital, course completion, being partnered and younger. Starting a business was related to having more financial resources and mediated by improved well-being. Clients who experienced an increase in income had previous business experience and an increase in assets. Increased income was mediated by improved well-being and business start. Reduction in public assistance was related to course completion, more sources of capital, not being in poverty, and increased assets. Increased assets were related to more education, not being in poverty, and more sources of capital. Being older, more sources of capital, a larger family, and improved well-being led to job creation. Overall, access to more financial resources enabled clients to meet personal and business goals and work toward self-sufficiency. The results suggest implications for public policy regarding business training and loan financing.

The microfinance industry seeks to alleviate poverty by providing business loans and related financial services to clients who are too small to be served profitably through the formal financial sector. Microbusiness lending is considered to be among the most powerful tools available for promoting entrepreneurial activity and economic development. However, a significant number of current and potential entrepreneurs remain untouched by microfinance. They live in regions considered to have cultures of non-repayment, which render them "unbankable." By better understanding non-repayment cultures and developing management strategies attuned to the unique attributes of these regions, the microfinance industry can effectively and profitably support these underserved entrepreneurs.

Unlike large firms with management teams, small businesses are usually run by one key person, the owner-entrepreneur, who bears almost all of the risks and makes most of the decisions related to the business. Because the owner-entrepreneur also embodies most of the firm-specific knowledge capital, health of the owner-entrepreneur is an important factor in the production process. Following a cohort of respondents in townships around Durban, South Africa, over a three-year period, we examined the relationship between an individual's physical health and the decision to start a business. Our results suggest respondents who were recent business entrants were in better health than respondents who did not start new businesses. Moreover, respondents without a business at the beginning of the study who later opened businesses during the study interval were significantly more likely to have better baseline health than those respondents who never started a new business. Hence, good health among entrepreneurs seems to be an important prerequisite to small business entry.

Since the 1990s, interest in the role of small and microenterprises (SMMEs) in economic development has garnered considerable attention throughout academic and practioner circles. Widely known for their potential to help stimulate economic growth and as a potential avenue for poverty alleviation, the purpose and promise of small businesses have been widely publicized. However, to date, little research exists that adequately documents the specific capital needs of very small businesses (those with less than 20 employees) and microenterprises (those with less than 5 employees) and their owners at specific points in a business's development and growth. Using data from the 1992 Characteristics of Business Owners Survey, the 2002 Survey of Business Owners and the 2003 Survey of Small Business Finances, we analyze the different types of firms in the United States, the amount of capital used by firms of different size and the sources of capital used by firms of different sizes to assess how capital needs and sources differ for those businesses with less than 20 employees. Paying particular attention to businesses owned by women and minorities, we argue that the path of SMMEs differs substantially from the typical path of larger small businesses. In addition, we highlight the implications of our findings and provide our policy recommendations to address them.

In a base-of-the-pyramid context, the ability to start ventures is often quite robust because micro-entrepreneurs are able to start with few resources and can often sustain ventures for extended lengths of time in the absence of meaningful revenues. Yet, the ability to grow ventures tends to be much more problematic. This paper examines the role of resources in yielding competitive advantage for microenterprises in base-of-the-pyramid markets, arguing that the value of resources is a function of their ability to supplement formal institutional voids. We consider access to formal infrastructure, assets that provide stability and business skills as potential sources of competitive advantage. We also examine the effect of resource allocation tactics on microenterprise growth. We test our theory using a sample of South African microenterprise owners. Implications are drawn for ongoing theory development and practice.

Although post-apartheid South Africa has introduced various policies and institutions to support small and micro businesses, these efforts have not delivered expected results; many such firms are not growing and are failing. Hence, this study investigates the constraints holding back the development of micro ventures and recommends what can be done to assist them. It is based on a sample of microenterprise informal sector operators in the South African province of Mpumalanga. Using Principal Component Analysis (PCA), a set of fourteen external and another of fifteen internal environmental constraints on growth were examined. The results indicate each set explains almost two-thirds of the total variation in growth limitations, with growth as an integrated component of sale, asset, labor and profit. The regression analyses confirmed that internal factors were significantly heavier hurdles in limiting the growth of the microenterprise operators than the external ones. The internal constraints were ‘education and training,’ ‘entrepreneurial factors’ and ‘storage and infrastructure,’ and the external constraints related to market factors. Because the external constraint is mainly exogenous, more efforts have to be placed on addressing internal entrepreneurial limitations for microenterprise to experience growth.