Journal of Developmental Entrepreneurship

Microinsurance institutions and instruments have developed rapidly over the last decade, with policies covering tens of millions at the base of the economic pyramid. Ranging from simple policies providing life or health insurance to complex policies covering catastrophic risks for small landholders, it is a market with proven potential that demands closer attention. This paper provides a review of the nascent academic literature and then suggests some critical elements of insurance theory that may help us understand the challenges facing microinsurance markets and how these markets can better serve the needs of their customers. Although the basic theory is well known, application to microinsurance markets reveals interesting variations on known results.

This paper aims to study the influence of pecuniary and non-pecuniary aspects on entrepreneurship. It attempts to fill a gap in terms of explaining how these aspects determine individual and household choices or constraints regarding entering entrepreneurship as either part time, with participation in labor markets, or as full time, as well as the corresponding supply of entrepreneurial effort. The study searches for insights on the relation between motivations intrinsic in either form of entrepreneurship and their effects on the supply of the entrepreneurial effort. Part-time micro entrepreneurs respond more to non-pecuniary aspects when maximizing their life choices, which divert them from profit maximization. However, full-time micro entrepreneurs are more sensitive to pecuniary factors and their choices regarding utility maximization are more compatible with profit maximization, albeit both groups are part of simple forms of entrepreneurship. The results identify the expectations placed on enterprises run by part-time and full-time entrepreneurial households in terms of their motivation and attitude toward the goal of profit making and consequently, to entrepreneurial supply and performance. Both groups may be relevant from the policy standpoint and employment in developing economies.

The goal of this paper is to gain a better understanding of the factors that determine the risk premium on bank lines of credit obtained by SMEs, and whether firm size, which may be used by banks to segment their client base, also has an impact on credit costs. An analysis of data from 406 SMEs in Canada showed the main determinants of risk premium were firm size, line of credit size, ability to repay, the relationship between banker and entrepreneur, and the length of the relationship with the bank. These determinants change according to the market segment in which the potential borrower operates. Banks appear to use a transactional approach for smaller borrowers, where credit terms are based on quantitative financial data, and a relational approach for larger firms, where relationship length and quality become significant.

Trust is the basis of many aspects of microfinance operations and is a critical determinant of microfinance success. Trust governs interactions within borrowing groups, between clients and loan officers and between clients and institutions. To effectively address the many strategic challenges microfinance institutions (MFIs) face, they must design control systems that address low levels of interpersonal and institutional trust in their target populations. By increasing focus on trust, MFIs can significantly improve their financial sustainability and social impact. This paper examines trust and its important role in both existing challenges and effective solutions in the microfinance industry. Informed by prior literature and field experience, a model is developed that can provide an effective foundation for scholars and MFI leaders to better understand and manage for improved microfinance success.

What role do institutions play in the development of entrepreneurial ventures? What factors influence whether organizations will engage in entrepreneurial activity? While research has examined the individual and group-level characteristics of entrepreneurs, this paper explores the role of institutions and organizations in the development of entrepreneurial ventures. Using the "Black Church" as an institutional context, we predict entrepreneurial activity patterns of individual congregations based on denomination-specific institutional logics — rules and norms that either facilitate or constrain organizational action.