Evaluating the outcomes of microenterprise training for low income women: A case study

A number of federal, state, and local government-sponsored programs have been created to facilitate the creation, survival and growth of small start-up businesses. These intervention programs include "investment and counseling by angel investors, loan-related counseling from community micro-finance agencies, free counseling by local business people, counseling and referrals by Small Business Development Centers, Small Business Institute-type interventions by university-sponsored student teams, and business incubation programs" (Sherman, 1999, p. 118). Such programs focus on creating jobs, increasing the economic stability of individuals and communities, alleviating poverty, and increasing economic selfsufficiency. Encouraging microenterprise development can also create jobs in a community, provide financial stability in the neighborhood, and help to restore and build communities through a philosophy of self-help (Johnson, 1998).

Microenterprise training and development programs have generated loans of more than $160 million, while providing various forms of assistance to more than 250,000 people who were developing or expanding businesses (Larger, Orwick, & Kays, 1999). Fifty-six percent of the programs provide support for TAFDC (Transitional Aid to Families with Dependent Children) clients and 91% of the programs target low-income individuals (Larger, Orwick, & Kays, 1999; Severens & Kays, 1997). The Small Business Administration's microloan program, for example, has funneled $36 million to women microentrepreneurs since 1992, and the agency has backed $10.45 billion in larger loans to women-owned businesses over the same period. The SBA has also supported the establishment of eighty women's business centers, which provide training, technical assistance and loan counseling to women at various income levels (Ford Foundation, 2000). The microenterprise strategy produces a variety of outcomes, from job creation to gains in household income for the poor-in half of the cases these gains were large enough to allow participants to move out of poverty, and reduce reliance on government assistance (Clark et al., 1999; Novogratz, 1992).

The majority of low-income clients participating in microenterprise training programs show gains in income over time (72%), and 53% had income gains large enough to move out of poverty (Clark et al., 1999; Economic Opportunities Program, 1997; Edgcomb, Klein & Clark, 1996). Participants in microenterprise development programs are more likely than control groups to become self-employed and remain self-employed, experience significant asset accumulation and a decrease in welfare assistance received, and create secondary employment opportunities (Benus et al., 1995; Clark, Kays, et al., 1999; Drury, Walsh & Strong, 1994; Raheim & Alter, 1995). Microenterprise programs effectively target and reach large numbers of female clients (Servon, 1996). Approximately seventy-eight percent (78%) of their clients are women (Clark et al., 1999; Economic Opportunities Program, 1997; Edgcomb, Klein and Clark, 1996). Such programs help women become self-employed by providing access to credit and entrepreneurship training, and by developing their economic literacy.