Conflicting goals in microenterprise lending programs : the Jamaican experience

Abstract

This thesis will argue that Microenterprise Lending Programs (MLPs) face at least one significant challenge if they are to remain viable in the long term: the clarification and reconciliation of their goals.

The first chapter establishes the location of microentrepreneurs, as a specific segment of the informal economy. The second chapter moves to a discussion of the origins of MLPs, from their roots in agricultural extension programs through to the characteristics of microentrepreneurs and the constraints which characterize their businesses. This discussion will be used as a background for a discussion of the rise of MLPs as a response to the needs of individuals engaged in microenterprises. The third chapter will then proceed to a more specific discussion of the administrative issues and choices faced by the program designers. This chapter begins to look specifically at the above mentioned conflict between operational methodologies.

Discussion revolves around the fact that there is significant pressure from donor agencies for programs to achieve financial self-sufficiency. This necessitates an emphasis on the credit component of the program, and may well detract from the program's ability to deliver other components usually identified with the credit plus approach, such as training and technical assistance. The conflict arises due to the fact that many programs see the provision of these other components as being of equal importance to the provision of credit. However, because of reliance upon donor funding, an MLP may be forced to compromise on the delivery of these components and adopt the approach more specifically directed toward financial self-sufficiency. (Abstract shortened by UMI.)