Women and the False Promise of Microenterprise

Abstract

Since the 1980s, microenterprise development programs have proliferated in the United States, where they are widely praised as strategies for economic development and poverty alleviation, especially for low-income women and welfare mothers. Based on research in a highly respected urban center for women, this article argues that microenterprise development is more detrimental and problematic than it is purported to be. Two reasons are isolated. First, gender constraints mean women tend to choose small-scale, undercapitalized, and barely profitable “pink-collar” businesses, largely home-based operations based on work women are already doing as part of their gender-specific role. Second, microenterprise training programs reinforce this business segregation by discounting the sociocultural conditions women bring with them to business and instead emphasizing the personal growth of individuals. The result is that women are encouraged to maintain their economic vulnerability and social peripheralization rather than become part of the mainstream business world.

Financing of women-owned ventures: The impact of gender and other owner -and firm-related variables

“…Often they do not have a lot of personal savings and have a poor credit history. These results confirm previous findings (Ehlers and Main, 1998;Cooper Maysami and Goby, 1999) and may be related to the results of Anna et al (2000), who showed that women's choice to pursue careers in traditional versus in non-traditional industries is influenced by their individual context, expectations and venture efficiency, offering an explanation to the concentration of women entrepreneurs in the retail and services industries. Also, these types of business sectors do not require large amounts of capital investment and thus contribute to the specific financing patterns of women-owned ventures.…”

“…In addition, these types of microloans programmes could form a vicious circle, by reinforcing women's financing behaviour which does not favour growth and long-term viability. Ehlers and Main (1998) highlighted these biases, explaining that these types of programmes could in fact reinforce the existing business segregation and encourage women to maintain their economic vulnerability.…”

Getting back into the labor market: the effects of start-up subsidies for unemployed females

“…Given this indication that becoming self-employed was probably not the preferred strategy of female participants together with findings by Ehlers and Main (1998), who show that supporting low-income, minority women in the United States fosters labor market segregation of those women, it is very important to consider long-run labor market outcomes. First of all, Panel A in Table 4 shows that the majority of SUS and BA female participants are still self-employed five years after start-up.…”

The Role of Farmers and Informal Institutions in Microcredit Programs in Tigray, Northern Ethiopia

“…In particular its potential to empower women has been much discussed. Evidence remains inconclusive (see also Develtere and Huybrechts (2005)), as some authors conclude microcredit empowers women (Hashemi et al 1996;Lakwo 2006), whereas others find it produces or reproduces women's social and economic vulnerability (Ehlers and Main 1998;Goetz and Gupta 1996;Rahman 1999), and still others argue the empowerment discourse is reductionist (Parmar 2003;Selinger 2008). …”