Journal of Microfinance / ESR Review


There has been a significant interest in the microenterprise movement regarding its effectiveness as a welfare-to-work strategy. A decade's worth of program results, demonstration projects, and research strongly suggest that the benefits of microenterprise development for welfare recipients outweigh the costs and risks. The state of Iowa has been a leader in promoting microenterprise development as a welfare-to-work strategy. Iowa was the first state in the US to incorporate microenterprise-development training as an eligible activity in its welfare-reform program. Since 1993, the Iowa Department of Human Services (IDHS) has contracted with the Institute for Social and Economic Development (ISED), a statewide microenterprise development organization, to help welfare recipients become self-sufficient through self-employment. IDHS requires an annual third-party evaluation of the program. The purpose of the evaluation is twofold: (1) to document program implementation and results, including goal attainment and participant characteristics, and (2) to analyze participants' movement toward self-sufficiency, as compared to that of welfare participants not enrolled in the program. This article reviews ISED's program and summarizes the findings of the first five years of the program. Among other findings is the fact that the program has experienced a three-year business survival rate of 56.4%.



Journal Title

Journal of Microfinance

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