Microenterprise as an Exit Route from Poverty: Recommendations for Programs and Policy Makers

Abstract

The objective of this study is to shed light on whether and how microenterprise programs can be used as an economic development strategy to enable lowincome people to achieve self-sufficiency through self-employment. Our findings provide little support for the notion that hard work and a small loan are sufficient ingredients for business success. Viable small firms are usually headed by well-educated owners andor those possessing specific skills that serve as a basis for successful business creation and operation. Potential entrepreneurs lacking assets, skills, and support networks are unlikely to support themselves through self-employment earnings alone. As a poverty alleviation strategy, microenterprise is not a panacea. Nevertheless, programs targeting the poor who do have skills, resources, and support networks can be useful vehicles for helping some to escape poverty.Microenterprise programs have received a great deal of attention in the US in recent years as the number and scope of programs have grown. The Aspen Institute's 1996 Directory of * Direct all correspondence to: Lisa J. Servon,

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