A Microenterprise Program Evaluation in Urban and Rural Minnesota

Faculty Advisor

Richa Dhanju


School of Social Work

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A Microenterprise Program Evaluation in Urban and Rural Minnesota

Despite widespread international success of microenterprise, scholars question whether this approach is viable for poverty alleviation in the US. Existing research indicates that, given the highly regulated and competitive economic environment in the U.S., people with fewer resources, education, and social networks are particularly challenged to start and maintain a small business. We evaluated the effectiveness of a microenterprise development program initiated in 2010 by a St. Paul based non-profit organization which adapted a model commonly used in the developing world to provide microloans and training to potential entrepreneurs in one urban and one rural setting in Minnesota. We conducted 26 semi-structured interviews and an online survey with program stakeholders to investigate the impact of this program. The urban microenterprise initiative has repaid all outstanding loans, continues to cover costs of business, and has recruited 80 consigners. Despite no significant increase to entrepreneurs’ individual incomes, this initiative was successful in increasing entrepreneurs’ business skills and bolstering social networks. Participants in the rural initiative, which used an individual lending approach, reported high satisfaction with training, but none applied for a loan. Further, shame and stigma around poverty emerged as a strong theme in both urban and rural interviews. Our research demonstrates that microenterprise is a feasible undertaking when individuals with diverse skills and resources come together, as was the case with the urban initiative. Our research furthers scholarship in a critique of microenterprise as an individual intervention for a systemic problem.