Microenterprise Development Works: Outcomes For Clients

This issue of the Microfinance Fact Sheet Series summarizes the data on the tangible outcomes for clients associated with microenterprise programs in the United States (US).

The summary draws on several sources that document programs with varying characteristics, focusing mainly on the studies that The Self-Employment Learning Project (SELP) and ACCION conducted.

The paper lists the following findings from various studies:

• Most MED clients in the US are female, belong to minority communities, and are well educated;
• A typical microenterprise is a sole proprietorship that has been in operation for two or more years with sales of $ 12,000 per year;
• The progress of clients over time is highlighted by tenacity, profitability and increase in assets;
• The path out of poverty for microentrepreneurs is not linear;
• Growth in take-home income is relatively steady and is driven by the low-income clients;
• The poor rely on more than one source of income, self-employment is often a key part of their survival strategy;
• Microenterprises have demonstrated rates of survival as high as 90%;
• Opportunities for business survival increase with access to training and technical assistance that lead to a good business plan, financial support and access to markets.

The paper concludes with a mention of the barriers to success for microentrepreneurs (health crises, a change in family circumstances, and isolation from lucrative markets), and recommendations to overcome these barriers.