Microenterprise Development Programs in the United States and in the Developing World MARK SCHREINER Washington University in Saint Louis, MO, USA and GARY WOLLER * Brigham Young University, Provo, UT, USA Summary. — Sparked by examples from Bangladesh, Bolivia, Indonesia, and other developing countries, hundreds of microenterprise programs have been started in the United States. Will these US efforts be successful? This paper reviews the evidence and concludes that microenterprise development is much more difficult in the United States than in the developing world. The paper suggests some ways to address the challenges of US microenterprise development. Ó 2003 Elsevier Ltd. All rights reserved. Key words — United States, microenterprise, microfinance, entrepreneurship, community devel- opment 1. INTRODUCTION Microenterprises are tiny businesses; most have one employee, the owner. Microenterprise development programs make loans and/or give classes to poor people to help them to start or to strengthen their businesses. In the past 15 years in the United States, the number of mic- roenterprise programs has grown to more than 340 (Langer, Orwick, & Kays, 1999). Growth has also been rapid in the United Kingdom (Rogaly, Fisher, & Mayo, 1999; Rogaly & Roche, 1998). Some scholars see microenterprise as a promising way to help the working poor, the unemployed, and those who receive public as- sistance (Balkin, 1989; Clinton, 1997; Fried- man, 1988; Raheim & Alter, 1998; Soloman, 1992). This view stems from a few programs in the developing world that serve massive num- bers of people efficiently. The best-known ex- amples are Grameen Bank in Bangladesh (Hashemi, Schuler, & Riley, 1996; Jain, 1996), BancoSol in Bolivia (Gonzalez-Vega, Schre- iner, Meyer, Rodriguez-Meza, & Navajas, 1997; Hulme & Mosley, 1996), and Bank Rakyat Indonesia (Chaves & Gonzalez-Vega, 1996; Patten, Rosengard, & Johnson, 2001). The success of the transfer of microenterprise promotion depends on the context (Bhatt & Tang, 1998; Hulme, 1990; Taub, 1998). Can microenterprise programs work as well in the United States as in the developing world? This paper reviews evidence of the effects of the context. It argues that microenterprise for the US poor is more difficult than in the developing world. Microenterprise is a good choice for a few extraordinary poor people, but wage jobs, additional education, and job training are still the most common paths out of poverty (Bates, 1997; Bendick & Egan, 1987; Bhatt, Tang, & Painter, 2001; Dennis, 1998; Mokry, 1988; Novogratz, 1992; Servon, 1999). World Development Vol. 31, No. 9, pp. 1567–1580, 2003 Ó 2003 Elsevier Ltd. All rights reserved Printed in Great Britain 0305-750X/$ - see front matter doi:10.1016/S0305-750X(03)00112-8 www.elsevier.com/locate/worlddev * This research was supported by the Division of Asset Building and Community Development of the Ford Foundation. We are thankful for comments from Cyn- thia Sanders and Michael Sherraden and from partici- pants in seminars at The Ohio State University, West Virginia University, and Washington University in Saint Louis. Final revision accepted: 11 February 2003. 1567