Looking Before You Leap: Key Questions That Should Precede Starting New Product Development
by Graham A.N. Wright, et al.

Successful microfinance institutions (MFIs) ultimately will be those that are "market-driven." A key element of being market-driven is the development of client-responsive products. This paper outlines some of the basic questions and issues that MFIs should address prior to embarking on the product development process. Effectively conducted, systematic product development will result in products that are popular with clients and more cost-effective operations for MFIs. It will also contribute systematically to the long-term sustainability of MFIs.

Counting in Social Capital When Easing Agricultural Credit Constraints
by Jarka Chloupkova Christian Bjønskov

International trade liberalization often implies increased potentials for export production. In order to invest in increasing capacity in agriculture, farmers need to have credit access. However, farmers in Central Europe and East Africa, among other places, are credit constrained, due to collateral reasons. Ad mode illustrates the additional producer gains from having access to credit; the gains are composed of a price effect, an investment effect, and a social-capital externality. The model and empirical findings suggest that improvements of agricultural credit can be achieved by relying on existing social structures, such as farmers’ social capital. The paper concludes that such externalities need to be addressed when designing optimal agricultural credit institutions.

Impact Assessment of Microfinance Interventions in Ghana and South Africa: A Synthesis of Major Impacts and Lessons
by Sam Afrane

Delivery of microcredit to operators of small and micro enterprises (SMEs) in developing countries is increasingly being viewed as a strategic means of assisting the so-called “working poor” (ILO, 1973). Over the past decade, a considerable amount of multi- and bilateral aid has been channeled into microfinance programs in the Third World with varying degrees of success. Like all development interventions, donors, governments, and other interested parties demand evaluations and impact assessment studies to ascertain the achievements and failures of these programs. This paper reviews two such studies conducted in Ghana and South Africa that focused mainly on impact results. The outcomes of the two case studies have established that microfinance interventions have achieved significant improvements in terms of increased business incomes, improved access to life-enhancing facilities, and empowerment of people, particularly women.

Special Symposium on Microenterprise Industry in the United States: Introduction
by Jason J. Friedman

Striving for Scale and Sustainability in Microenterprise Development Programs
by John F. Else

A challenge to United States microenterprise development is scale. After years of experience and leaning, most programs still serve relatively few clients on an annual basis. Given the barriers to increasing scale and sustainability, we need strategies to achieve growth. This paper identifies strategies for growth in the field and identifies three areas of focus that are essential to increase scale and sustainability.

Microenterprise Development in the United States: Closing the Gap
by Williams Burrus

To better understand the dynamics of the market and to improve ACCION’s own capacity for delivering credit, the ACCION USA Network (ACCION) hired a research firm to conduct a study estimating the number of microentrepreneurs in the United States, the number that had never received a bank loan for their business, and qualitative information. The firm conducted twenty focus groups of 108 potential and current ACCION customers in New York, Chicago, Houston, San Diego, Atlanta, and Miami. This paper reports the key findings of these focus groups and describes some of the changes ACCION has made in its programs to address the findings.

What Makes for Effective Microenterprise Training?
by Elaine L. Edgcomb

Only a few studies so far have focused on the relationship between effective training and technical assistance, and client success at starting, stabilizing, or expanding a business. The Aspen Institute’s Microenterprise Fund for Innovation, Effectiveness, Learning, and Dissemination (FIELD) project selected five U.S. microenterprise organizations to increase the industry’s understanding of what makes for effective training and technical assistance. What follows is a summary of key findings in two categories: those that address the relationship between the characteristics of clients and their business success, and those that address the relationship of business skills training and client success.

What Does It Take to Borrow?: A Framework for Analysis
by Caroline E. Glackin

This paper introduces a framework for the analysis of the barriers, costs and constraints microloan customers in the United States encounter. While much previous work has been done on the benefits and potential of microenterprise in the United States as well as the program costs, relatively little research has explored the process from the perspective of the customer. This paper first introduces the gap between loan fund capital and loan disbursement. It then posits a framework for understanding the customer perspective. Further research is recommended to determine which factors are salient and how they can be applied to benefit microloan customers and microlenders in the United States context.

Book Review
The Myth of Development: The Non-viable Economics of the 21st Century
by C. Beth Haynes