Journal of Microfinance / ESR Review


Enthusiasm for microcredit programs has increased during the past decade. The attention these programs have drawn stems philosophically from progress in cultivating self-sufficiency among those in abject poverty, and practically from the viability and high loan repayment rates of many microfinance institutions. The programs assume that lack of capital is the main barrier to the economic progress of the poor. The lack of entrepreneur business management experience and training, however, may create a barrier equally powerful and limit the growth potential of microenterprises. Microcredit programs could foster even greater economic progress by ensuring that clients receive appropriate human capital development. Without adequate training of microentrepreneurs, microloans may allow the poor to move from abject poverty to subsistence income levels, but limited skills leave the opportunity for substantial firm growth untapped. The potential of these firms to employ others also remains unfulfilled. This paper reviews relevant microcredit and microenterprise literature, and then argues for increased microentrepreneur training based on the case of a Manila microentrepreneur.


C. Beth Haynes is a Professor of Economics at BYU-Hawaii. She was a Fulbright Senior Scholar in Indonesia and China and has given guest lectures at ten universities in Asia. Her research interests include human capital and entrepreneurship in developing countries.; Kristie Seawright is an Associate Professor and the director of the Center for International Business Education and Research in the Marriott School at Brigham Young University. Her primary research interest is international entrepreneurship, she has publications in The Academy of Management Journal, Frontiers in Entrepreneurship Research, and Global Focus.; William C. Giauque is Professor of Operations Management at Brigham Young University's Marriott School. His research focuses on product development, project management, and simulation. He has been director of BYU’s MBA program and the recipient of numerous awards.



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Journal of Microfinance

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