Abstract

Shaw (2004) makes a distinction between survival micro-enterprises and entrepreneurial micro-enterprises. In developing countries where the poor are poorly educated, the only capital micro-finance and technology is largely unaffordable, most micro-enterprises are entered into for survival purposes. In developing countries micro- enterprises have tended to be looked at from a development, or poverty alleviation perspective, rather than as potentially growing businesses. (Mead & Liedholm 1998, Toye 1993) Micro-enterprise development programmes have been a popular poverty alleviation strategy in developing nations since the 1940s (McPherson, 1996). Vast sums of money are now made available through a variety of micro-credit schemes, yet there appears to be little empirical evidence on the impact of this financing for business growth or the factors that might influence the growth and sustainability of these enterprises. To better understand the potential for growth and entrepreneurial activity of ‘survival’ micro-enterprises, an empirical study was conducted among micro-enterprises who had received micro-financing in the Beira area of Mozambique. The research question is: Is there potential for micro-enterprises entered into for survival to become opportunity focused and move from the informal to the formal sector.

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