Questioning the Panacea: Lessons from a CCIC Learning Circle on Micro-Enterprise Development

A micro-enterprise is a very small business producing goods or services for cash income. While the people directly engaged in a micro-enterprise do so with a clear intention - to support themselves and their families - the rationale for the various support agencies is often not clear. This paper attempts to explore the role of micro-enterprises in drawing people out of poverty.

The questions that come up, vis-à-vis the purpose of having micro-enterprises are:

• Is micro-enterprise development simply a smaller scale component of the industrialization process?
• Is it a strategy to address the inequity and injustice created by the industrialization process?
• Is it just a charitable act to help poor people achieve basic subsistence levels?
• Does it have the potential to contribute to a social transformation?

The paper indicates that:

• Often the poorest do not benefit from microcredit programs;
• There is excessive focus on credit as one key form of intervention to promote microenterprises.

It outlines several critical forms of support, apart from microcredit, that should be developed to respond to the needs of the poorest members of the society, including:

• Provision of infrastructure;
• Marketing support;
• Technical advice and training;
• Management training;
• Appropriate policies at the local, national, and international levels.

The paper raises the questions:

• Where are the current micro-enterprise policies headed?
• What are the kind of societies and economies that are being created with this work?

Finally, it stresses on the need of having a clearer vision of the specific role of micro-enterprise in the broader effort to achieve sustainable human development.