Microenterprise development program success: A path analysis of factors that lead to and mediate client success.

Through a path regression analysis of data from the Vermont Micro Business Development Program, this study examines the relationships between client characteristics, program activities, interim outcomes, and impacts, to understand factors that lead to and mediate client success in micro enterprise development programs and as entrepreneurs.

Statistics demonstrated excellent model fit to the data. The interim outcome of improved personal well-being was related to more sources of capital, course completion, being partnered and younger. Starting a business was related to having more financial resources and mediated by improved well-being. Clients who experienced an increase in income had previous business experience and an increase in assets. Increased income was mediated by improved well-being and business start. Reduction in public assistance was related to course completion, more sources of capital, not being in poverty, and increased assets. Increased assets were related to more education, not being in poverty, and more sources of capital. Being older, more sources of capital, a larger family, and improved well-being led to job creation.

Overall, access to more financial resources enabled clients to meet personal and business goals and work toward self-sufficiency. The results suggest implications for public policy regarding business training and loan financing.

Schmidt, M.C. and J. Kolodinsky. Microenterprise development program success: A path analysis of factors that lead to and mediate client success. Journal of Developmental Entrepreneurship; March 2007.