Microenterprise as a Livelihood Source and Factors Affecting their Success: A Study from India

Abstract

Among various self-employment options, micro-enterprise has been recognized as an important tool for employment generation and poverty alleviation in developing countries by policy makers. This study is an attempt to look at some of the micro-enterprises as a livelihood source for the poor and constraints faced by them in establishing and running their micro-enterprise. The study involves a survey of 40 micro-entrepreneurs in the Maharashtra state of India. The study involves simple statistical analysis. This paper concludes that typically a micro-entrepreneur is a male, landless and young person between the ages of 21-40 years. These micro-enterprises are of diverse nature but largely these micro-enterprises are service oriented and been started with self-motivation with the objective of getting employment. Less than 50 percent of these micro-enterprise got support for establishing micro-enterprise from other sources like friends and other organization largely for finance and skill. These are own account enterprises started with very minimal investment, mostly less than Rs. 10000 and most of these micro-enterprises are able to generate a annual profit of less than Rs.20000. Among constraints faced by these micro-entrepreneurs, finance was the most important constraint identified.