Micro-Enterprise
The term microenterprise connotes different entities and sectors depending on the country.
Generally speaking, in developed countries, microenterprises comprise the smallest end (by size) of the small business sector, whereas in developing countries, microenterprises comprise the vast majority of the small business sector—a result of the relative lack of formal sector jobs available for the poor. These microentrepreneurs operate microenterprises not by choice, but out of necessity.
Microenterprises add value to a country’s economy by creating jobs, enhancing income, strengthening purchasing power, lowering costs and adding business convenience.
Because microenterprises typically have little to no access to the commercial banking sector, they often rely on “micro-loans” or microcredit in order to be financed. Microfinance institutions often finance these small loans, particularly in the Third World. Those who found microenterprises are usually referred to as entrepreneurs.
The terms microenterprise and microbusiness have the same meaning, though traditionally when referring to a small business financed by microcredit the term microenterprise is used. Similarly when referring to a small, usually legal business that isn’t financed by microcredit, the term microbusiness is used.
A micro-finance institution is an organization that provides micro-finance services, ranging from small non-profit organizations to large commercial banks. Micro-finance institutions are located primarily in developing countries. They vary in structure, sophistication, philosophy, size and scope of services and scale of operations. Most micro-finance institutions provide small loans to the poor in the areas they operate. Some provide additional financial services such as insurance, micro-mortgages and savings products as well as social services such as healthcare and education. The primary focus of an MFI is to provide financial services to people who don’t have access to the regular banking institutions. The primary target group usually includes clients who are women and/or are in rural settings, with second priority to male clients and/or urban clients; these latter two groups are dramatically smaller in number.
We are currently investigating potential partnerships in which we can provide funds through the awareness and proceeds of the “Reparando” film project that will provide oversight and organizational structure to a MFI in La Limonada.