Micro-enterprise development in emerging markets

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International Journal of Emerging Markets

ISSN: 1746-8809

Article publication date: 1 October 2006

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Palakurthi, P. and Maddocks, W.O. (2006), "Micro-enterprise development in emerging markets", International Journal of Emerging Markets, Vol. 1 No. 4. https://doi.org/10.1108/ijoem.2006.30101daa.002

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Emerald Group Publishing Limited

Copyright © 2006, Emerald Group Publishing Limited


Micro-enterprise development in emerging markets

About the Guest Editors Puneetha S. Palakurthi, PhD, a Lecturer of SCED at Southern New Hampshire University teaches graduate level courses in Project management, Research and Evaluation of Development Projects. She specializes in participatory and qualitative approaches for assessments in designing and implementing development projects. She has expertise in providing the training and technical assistance to the Micro finance Institutions in Impact assessment, Poverty assessment, and Market Development Services. Currently she is also working with Institute for Development, Evaluation Assistance and Solutions (IDEAS) managing and supervising the international programs. She received PhD from Andhra Pradesh Agriculture University, India where she soon became an Asst. Professor and now has more than 14 years of experience in teaching, training and working with NGOs all over the world. She was a consultant to the Government of India for five years in evaluating the development projects of various nongovernmental organizations. She provided consultancy services to various micro finance institutions in impact and institutional assessment studies in Asia, Africa and Latin America. She offers training workshops in micro enterprise development institute, and also teaches at Tulane University. As the Research Director of Youth Employment Summit Campaign (2002-2004), she was instrumental in the production and development of about 20 papers on youth employment and entrepreneurship. She has co-authored papers in HIVAIDS and youth, service Learning for youth and YES framework for action to promote youth employment.

William O. Maddocks is the Director of the Microenterprise and Development Institute at the School of CED, the Microenterprise and Development Institute – Southern Africa and an Adjunct Lecturer in organizational management and microenterprise development. Professor Maddocks holds a MS in CED New Hampshire College and a BA from Southeastern Massachusetts University. He is the past Executive Director and co-founder of the Community Economic Development Center of Southeastern Massachusetts; Director of Development for People Acting in Community Endeavors; Organizer, Massachusetts Fair Share; Treasurer, Jobs with Peace, New Bedford Chapter; Chair of the Coordinating Committee of the Haymarket People's Fund; was once a hard rock miner, at Homestake Gold Mine and has been an activist in peace, civil rights, environmental justice, anti-war and labor movement struggles for more than 30 years.

Micro-enterprise development in emerging markets

For the Micro enterprise development practitioners, working with disadvantaged populations have a host of constraints including illiteracy and innumeracy, lack of technical and business skills, and the psycho-social consequences of generations of disenfranchisement which are only compounded by gender discrimination. This is especially true in situations where employment opportunities are limited by geography, socio-cultural norms, and underdeveloped public and private sectors. Yet, case after case has proven that these seemingly intractable obstacles diminish with appropriate project interventions. Linda Jones, Alexandra Snelgrove and Pamela Muckosy in “The double-X factor: harnessing female human capital for economic growth” have demonstrated varying degrees of successes of value chain and microfinance projects of MEDA, both past and present, to illustrate the concept, and share the learning from project design and implementation. They had shown that with a relatively low investment of resources, women would be capacitated to contribute to the growth of the small business sector which is a cornerstone of a robust private sector. Their argument is that the benefits of the economic empowerment of women will serve any nation committed to the growth of trade and commerce.

It is heartening to find the increasing interest of the MED sector on young people. This frequently forgotten section of the population faces a host of issues especially unemployed and poor ones. Caroline Hossein, Julie Redfern, and Richard Carothers argue well in “An Egyptian case study: financial services for young people who work” that it is time to consider innovation in designing programs for young people. The market is diverse and so are the needs of the children and youth who are involved. There are alternative learning techniques and skill development for young people in poor countries where school and social services do not meet their needs. Learning within actual workplaces can provide alternate educational opportunities for children provided the work is safe and age appropriate. This paper emphasizes the learning that the young people are key actors in many micro enterprises as workers and in some cases as business owners themselves. Programs focused on young people and economic empowerment and job creation will assist many developing nations in stabilizing systems and supporting the productive human assets.

Wolday Amha and Gebrehiwot Ageba have written “Business development services (BDS) in Ethiopia: status, prospects and challenges in the micro and small enterprise sector” based on a research undertaken by EDR in 2003 to understand and assess the status of delivering BDS (Business Development Services) and identifying the constraints in Ethiopia. The authors found that there were very limited BDS providers in the sector which delivered limited services to few MSE operators (very low outreach). MSE operators had very limited vocational and technical training (before starting business), received few short-term training, extension and counselling, and marketing services. The most important constraints were mainly related to access to markets and finance. Networks or associations in the MSE sector were not used as useful instruments to promote joint marketing. It was also revealed that there was no significant difference based on size (micro and small) and gender in accessing BDS in the MSE sector. Authors advise that addressing the constraints of delivering BDS requires clarity regarding the roles of facilitator and providers and the use of subsidies during the transition phase. They argued that the interventions should focus on delivering BDS on sustainable basis by responding to the needs in the market and providing incentives to the BDS providers, particularly the private sector.

Frank Lusby, presented a Viewpoint paper titled “ Principles for market development approaches” The following is a presentation of general principles that can be useful to enterprise development organizations (EDO's) who are trying to take on a more market development (sustainable) approach to enterprise development. He clearly explained how the principles such as – develop a positive attitude towards the private sector, Impact through indirect interventions, avoid market distortions, revisit the role of middlemen, promote smart subsidies, poverty alleviation through small/medium firms, tread lightly in market relationships and taking a market instead of group focus could be applied to economic development projects that target small, medium or large enterprises in all the sectors such as agriculture, manufacturing, and services – and also have application in other sectors such as health, conservation, and education.

Puneetha Palakurthi and William O. MaddocksGuest Editors