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Microenterprise development principles

By January 17, 2019 Microfinance

The microenterprise development principles ensure enhancing the capacity of the poor to participate in markets. The principles are high impact, cost-effective, market-driven, sustainable, and specific and focused interventions.

The principles ensure pro-poor market development. For the project, the ARBOs would be the target microenterprises.

High impact principle requires an understanding of what the microenterprises want and need. It involves both depth and breadth of outreach. The depth of outreach makes sure that the organization reaches hundreds and thousands of primary stakeholders. The breadth of outreach ensures that there is an improvement in the quality of life of among primary stakeholders, such as improvement in their income level.

Cost effective principle means project interventions and solutions are delivered at the least possible cost. It should not be dependent on grants and subsidies. Projects interventions that target larger base of microenterprises are more cost-effective.

MThe market-driven principle means core markets link consumers and producers. This would enable the poor producer’s good to reach final markets according to the right product or service specifications. It brings affordable product and services to poor people.

Sustainable principle involves market actors continuing to work together when the intervention is finished. This means support markets provide basic services to strengthen market systems. It also means business support services are provided in a financially viable way.

The market facilitator focuses on developing the capacity of market actors along the value chain. Sustainability means that operations are not dependent on grant and subsidies. It also means that ARBOs are able to survive and compete with existing market factors.

Specific and focused intervention principle is driven by the needs of the microenterprises. It focuses on removing constraints/barriers that prohibit microenterprises from participating in higher value markets. It also involves strengthening and/or developing support markets.



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