Chapter 9: Is Microcredit Compatible with Microentrepreneurship? Evidence from Latin American Tienditas
9. Is microcredit compatible with micro-entrepreneurship? Evidence from Latin American tienditas Michael J. Pisani INTRODUCTION Eva Salinas rises very early in the morning (4 a.m.) to prepare for the day’s household tasks: grinding corn, making tortillas, collecting eggs from the chickens, getting the children ready for school, preparing her husband’s lunch, and getting her tiny store ready for the day’s business. Her many household duties include the operation of a convenience-like store from her enclosed front porch. From sun-up to a little past sundown, Eva is present to make sales while maintaining the household. Eva, like a dozen or so of her neighbors in her barrio in Matagalpa, Nicaragua, complements her husband’s earnings by retailing household necessities, such as cooking oil, toiletries, and the like. Eva earns about $5.50 a day in profits or about 40 cents an hour for her retail work. Sometimes, her income is the only income brought into the household because of a lack of outside employment for her husband during times when their small 3 acre farm is not in production. Eva leaves her small home compound only for special events such as attending school or community events, going to church, and purchasing products for resale in her home-based store. Eva is a micro-entrepreneur operating a microenterprise at the base or bottom of the global economic pyramid (Prahalad, 2005). Typically, microenterprises are one- or two-person shops that engage in commercial, repair, or small-scale production activities from their home or on an itinerant circuit. The operators...
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