The Effect of Entrepreneurship Education on Micro-entrepreneurial Outcomes Funded by MFIs

Abstract

Microfinance institutions (MFIs) are widely catering to millions of customers deprived of mainstream lending services. Beyond doubt, they are fulfilling their goal of loan provision to the deprived creating an opportunity for them to better their lives. Herein, arises a critical question, whether loan is enough to achieve the primary purpose of this very loan, which is the upliftment of the borrower, or more than funding is needed? Deep investigation is deemed to explore an answer to this. In this process, this paper compares the performance of micro-entrepreneurs who undergo and who do not undergo entrepreneurial training and education programs. Thus, establishing the impact of entrepreneurial training and education programs on micro-enterprises. This scientific research provides discreet insight for researchers to narrow in on related significant research topics and presents the organizations an opportunity to decide the thrust they want to apply on entrepreneurial training and education programs being in a position to evaluate the long-term impact of their approach and investment. It is a longitudinal study performed on the 121 MFI clients of 4 microfinance institutions in 2 different states (Bihar and Orrisa) of India. All the clients have taken loan with the purpose of starting micro-enterprise. 61 received entrepreneurial education provided by MFIs and rest have started without any entrepreneurial education. Every year from 2015 to 2021, semi-structured, in-depth telephonic interviews were performed to track, measure, and analyze respondents' transition from loan disbursement to entrepreneurship. Though, all the beneficiaries do not find the education programs in absolute synchronisation with their development needs in terms of skills and knowledge, still the results of those who have attended such programs are found to be better than those who haven’t. Also, the majority of them appear content with the results of their entrepreneurship education and are performing better in comparison to those who have not undergone it. The results advocate that effective education should be provided on entrepreneurial, social, health and family aspects by each MFI to achieve the basic purpose of its existence. The study provides valuable insights for the stakeholders involved in developing micro-enterprises.