Mexico's microenterprises employ about 20 percent of the working age population in the country, and the number of microenterprises has increased substantially over the last decade. Given the role these small business units play in employment and wealth creation, it is important to understand the profile of firms that resort to outside start-up capital to finance their operations. Using microdata from Mexico's National Survey of Microenterprises (Encuesta Nacional de Micronegocios, ENAMIN), we analyze the socioeconomic factors related to the need for outside start-up capital. The findings show that a relatively small number of socioeconomic factors such as the background of the microenterprise owner, the characteristics of the microenterprise, the operational business sector, the geographical location of the microenterprise, and the future plans of the owner have important implications for the policy makers as well as for the capitalassistance tools used in fostering a microenterprise-friendly economic, social, and operational environment.
Heikki Heino is University Professor of Finance, College of Business and Public Administration, Governors State University in University Park, Illinois.; José Pagán is Associate Professor in the Department of Economics and Finance, College of Business Administration, University of Texas-Pan American in Edinburg, Texas.
Journal of Microfinance
Issue and Volume
BYU ScholarsArchive Citation
Heino, Heikki and Pagan, Jose A.
"Assessing the Need For Microenterprises in Mexico to Borrow Start-up Capital,"
Journal of Microfinance / ESR Review: Vol. 3
, Article 9.
Available at: http://scholarsarchive.byu.edu/esr/vol3/iss1/9