Estimated reading time: 3 minutes, 37 seconds

Colonialization of the Micro-Enterprise Movement

PulperiaMicro-enterprise has a long history. It has always existed as a form of subsistence commerce amongst the poor. A half century ago we referred to it as the "Penny Economy". I thought of it then in terms of the Honduran "pulperia" , their version of a convenience store. The pulperia was a makeshift window in a self-constructed clap-board house where you could buy a single egg or cigarette Somehow this historic form of enterprise has captured world attention, triggered by large individual/corporate foundation magnates like Soros and Gates. The presence of grant money for micro-enterprise development, in turn, has caught the attention of the campuses, especially Schools of Business with Entrepreneurship programs.

The catch words for grant development are micro -enterprise, micro finance and social entrepreneurship. To the academic business world this has meant the application and adaption of their technologies and theories to businesses operating at a small scale. Unchanged for the most part is the assumed bottom line of the corporate business model: improve efficiencies, growth and greater profits. In effect, this goal seems to push the small scale operator into becoming a larger scale operator and the locale limited enterprise into a modified franchise operation. To even apply for grant support from the larger foundations one has to be a fairly large scale operator themselves with annual budgets of a certain size and a proposal that assures that any funder's investment would yield broad, high visibility impact in reducing poverty.

Witnessing this approach to poverty reduction through the current micro enterprise movement, I am troubled by two potential side effects, which have occasioned my use of the colonialist metaphor. First is the limited interest in the social aspects of micro-enterprise development, What really is meant by social entrepreneurship? Is growth and profits the ultimate purpose of micro-enterprise development? During my days as Peace Corps Director in Honduras, I became acquainted with many "street vendors and service workers" and came to appreciate the family impact of their small businesses along with the extent to which they seem to enjoy their freedom as an independent albeit small scale entrepreneur. Making more money or growing bigger did not seem very important to them as long as their efforts were sufficient to provide for family subsistence. This does not sit well with the economic mindset that sees size and profit growth as essential ends of their model. The expectations of the model are suggestive of an imposition of western economic models and values on poor people in other cultures, not unlike historic colonial traditions.

The second side-effect consists in the build up of the movements Raj itself -the rise of a large, bureaucratic, costly infrastructures to deliver the micro-enterprise, micro-finance and social entrepreneurship programs around the world. The end result being that much of the grant monies end up in the delivery system and not in the hands of the poor. The means in effect becomes the end. In recent years I have found myself inundated with requests to join associations, subscribe to on line newsletters and journals, sign up for webinars, participate in research and evaluation programs, attend conferences and the like. On the international scale one can note the rise of new corporate non- profit agencies ready to serve as the "middle man" in implementing micro-enterprise programs and strategies.

The real growth in the micro-enterprise movement seems to be with those who have appended themselves to the movement. What value do these add-ons bring ?. Do they clarify the goals of the movement or re-inforce a western capitalist mode of economic development? Do they accelerate the upward mobility of a few talented poor entrepreneurs to the neglect of the millions who remain indigenous street vendors? Is the movement really designed to make a major contribution to ending poverty around the world or does the dramatic effects of a few success stories mainly provide a back drop for a foundation's photo ops.

There is an inherent bias in the way most western forms of development are conducted. A colleague of mine once argued for a "no development" society, since development (in his native India) tended to increase poverty, not reduce it, though managing to build up a larger native middle class. It was India's poor that financed the Raj and its expansion over the years. Let this not be the story of the micro enterprise movement.

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