Microfinance and sustainable micro entrepreneurship development

Abstract

Looking at the growth of poverty and unemployment in developing countries, promotion of micro entrepreneurship and microenterprises is gaining importance in the present context as an important poverty alleviation tool. More than a concept 'Sustainable micro entrepreneurship' is a development process, based on small scale and self sustainable activities. One of the major problems identified with the development of sustainable microentrepreneurship is lack of access to credit for the microentrepreneurs. According to an estimate more than 90 percent people in developing countries lack access to financial services i.e. either savings or credit. Specially, for the micro entrepreneur who lacks any asset base for collateral, situation becomes all the more critical. However, microenterprise usually needs small capital. Still it is difficult for the poor to manage that small amount of capital need. Due to the failure of government and market institutions to provide financial services to the poor, last decade has seen the evolution of microfinance institutions as a boon for the microentrepreneurs. For promoting 'sustainable microentrepreneurship' microfinance is seen as an important requirement. This paper will make an attempt to explore the possibilities of promoting micro entrepreneurship through Microfinance Institutions.