Journal of Developmental Entrepreneurship

Using an on-going real case study of a micro-finance project modeled on financial inclusion in Zimbabwe, a country with high levels of poverty, we provide real time insights on entrepreneurship and micro-finance in this environment focusing on the nature of challenges faced by entrepreneurs and potential solutions to these challenges. While acknowledging this is a research stream that has dominated micro-finance, our study extends the scope of research beyond Asia and Latin America to include insights from an African market where micro-finance has recorded significant growth yet very few stories are told about these experiences. Our case study provides an opportunity to reflect on emerging and previously held insights in real time using a project that is still in the process of dealing with these challenges. We then go onto illustrate how our inclusive approach to serving the unbanked segment in Zimbabwe has potential for broader contribution to poverty reduction among citizens who are exposed to extreme conditions of poverty. Our paper also outlines an alternative approach of solutions to the challenges faced by micro-finance entrepreneurs, which could be applied by entrepreneurs in environments facing similar challenges.

This article explores factors affecting the survival and exit routes of new firms created in 2004 using data from the Kauffman Firm Survey. We draw upon the Resource-Based View to test several hypotheses regarding the impact of both tangible and intangible resources on new firm survival in both service and non-service firms. We also distinguish between two types of exit: closures (permanently stopped operations) and mergers or acquisitions. Our results reveal that, although service and non-service firms may differ in terms of industry structure, the fundamental resources that contribute to their survival are the same: education, work and life experience and adequate levels of startup financial capital. In spite of these similarities, our results did reveal industry differences in terms of exit. We found serial entrepreneurs in the service sector were more likely to exit through merger or acquisition. Conversely, intellectual property decreased the likelihood of exit through merger or acquisition for non-service firms. Thus, our findings revealed a link between human capital, industry and exit route for this sample of new firms.

Migration status has been neglected both theoretically and empirically in the financial discrimination literature. Drawing on data from a comprehensive survey of small- and medium-sized businesses in Australia, this paper tests whether Australia's migrant entrepreneurs have greater difficulty accessing external business finance than their Australia-born counterparts. In doing so, it tests the theoretical proposition that the passage of time (or time spent in Australia) mediates a relationship between migration status and access to business finance by determining borrow-lender information asymmetries. We find that long-term migrant entrepreneurs are more likely than Australia-born entrepreneurs to: (1) report access to finance as an obstacle, (2) pass up investment opportunities because of inadequate access to finance, and (3) have obtained funding from family and friends. However, no significant differences are found between migrant and Australia-born entrepreneurs in terms of denial and discouragement rates, or their past use of bank finance.

The aim of this paper is to evaluate critically the gender variations in informal sector entrepreneurship. Until now, a widely-held belief has been that entrepreneurs operating in the informal sector in developing nations are lowly paid, poorly educated, marginalized populations doing so out of necessity as a survival strategy in the absence of alternatives. Reporting an extensive 2003 survey conducted in urban Brazil of informal sector entrepreneurs operating micro-enterprises with five or less employees, the finding is that although less than half of these entrepreneurs are driven out of necessity into entrepreneurial endeavor in the informal economy, women are more commonly necessity-driven entrepreneurs and receive lower incomes from their entrepreneurial endeavor than men despite being better educated. The outcome is a call to recognize how the gender disparities in the wider labor market are mirrored and reinforced by the participation of men and women in the realm of informal sector entrepreneurship.

The aim of this paper is to address entrepreneurship and ethics from the perspective of the Ghanaian entrepreneur in small and medium-size enterprises to extend our understanding of issues influencing entrepreneurial behavior in developing economies such as Ghana. Our study specifically addresses three typical situations in which business ethics are challenged: (1) When applying for business information and permits, (2) When competing for business contracts and financing and (3) When dealing with tax authorities. Relying on in-depth case-study data from 22 entrepreneurs, the paper conceptualizes entrepreneurial behavior related to business ethics and identifies several important challenges to overcome to enable economies to build a more effective market economy.

Microfinance institutions (MFIs) have largely focused on urban markets, leaving the rural poor underserved. The high costs of serving rural markets has often been identified as the key impediment to serving these markets, resulting in saturation and heavy competition in urban markets while poor rural clients remain unserved. In this paper, we provide evidence from a sample of over 10,000 microfinance loans in Malawi, that the cost argument has an important flaw. Results show that client retention, a critical aspect of financial sustainability, is significantly higher in rural markets. In addition to being a key financial indicator in an industry where annual client exit rates can exceed 50 percent, client retention is also a key measure of social impact. By operating in rural markets, MFIs may be able to increase both social impact and financial performance.

This study examines the interest rate differences paid to a bank, a Micro Finance Institution (MFI) and a local moneylender. In a multi-period lending contract, a borrower discounting the future income stream at a constant rate is willing to pay the highest interest rate to the local moneylender, comparatively lower rate to a MFI and the lowest to a formal sector bank. In other words, if the interest rate charged by each of the three lenders is the same, the repayment rate will be highest for a moneylender followed by a MFI and the lowest for a formal sector bank.