Microenterprise development involves providing entrepreneurs, particularly women and the poor, with greater, more reliable access to loans and business development services to start or expand their small businesses. As Boston-based ACCION International, a leading microcredit organization explains, "micro" loans can make the difference between mere survival and a decent life. With capital, people can grow their businesses and earn enough to afford basics like running water, better food and schooling for their children.
An example of a microenterprise client might be a women's cooperative selling handicrafts. A loan could help buy materials that would make production easier or better planned. Or it might help someone set up a small street vending food service so someone would be able to provide for his family. It might also involve establishing a revolving loan fund in a small village. Providing access to a small amount of capital -- just a few hundred dollars -- makes a huge difference in the lives of many poor people trying to start a business and earn some income.
Who Works in Microenterprise Development?
Individuals generally enter this field because they want to make a difference in the lives of less fortunate people. This social consciousness is an important attribute to someone who may work in this field, but beyond that, many skills are needed to forge a career in microenterprise development. The field is becoming more sophisticated, and the need for a strong financial and economic background is critical. Many microenterprise professionals have prior banking experience, particularly in the areas of lending and credit.
Additionally, a minimum of two years' prior experience in a developing country -- usually through the Peace Corps or the like -- is generally required. A graduate degree in economics, business administration or international affairs is also important.
One option to consider, if you would like to enter the field but don't have the international experience, is to start domestically. Encouraged by the success microenterprise models have had abroad, there is a trend to fund microenterprise projects in the United States. For example, ACCION International opened a New York office that is domestic in focus. Community development corporations (CDCs) around the country are also involved in microenterprise work.
What Is a Typical Job Like?
People involved in microenterprise work generally work for nonprofit organizations or multilateral agencies, like the World Bank. Job titles include: microfinance specialist, loan officer or simply, program officer.
Daily work involves meeting with prospective borrowers and entrepreneurs and assisting them with loan applications and technical assistance for their businesses. You might also conduct analyses of these businesses to assure viability as well as structure loan terms that work for each client. Many organizations also do evaluations and thus conduct follow-up visits to ensure that funds were used for their intended purpose and payments are able to be made in a timely fashion. Often organizations help individuals connect to similar small-business owners to form supportive networks.
Trends in the Field
According to Jeremy Black, a microenterprise professional, "The overall trend or push by international donors is moving toward increasing the financial sustainability of microfinance organizations so that they cover more of their operating costs with the revenue they generate on loans and fees to their clients. USAID, for example, is a major proponent of this goal."
The increasing complexity of the field is also important to consider. "Major international microfinance and microenterprise development organizations are becoming increasingly sophisticated structures, some with holding companies combining for-profit and nonprofit entities," Black says. "A few are attracting equity investors. Some are becoming increasingly adept at conducting sector or subsector analyses in order to encourage microenterprise development in a sector with growth potential, or in order to encourage cluster development."
More Information
- USAID Microenterprise: This is the US Agency for International Development's (USAID) initiative to support technical and financial assistance, research and training on best practices in microenterprise development and finance.
- InterAction: A nonprofit umbrella organization of NGOs involved in international development work.
- ACCION International: This is a well-known microcredit organization that operates in the US and Latin America. It has links to other organizations, publications to order and information about their projects.
This article originally appeared on Monster.com.
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