Microenterprise Development Success: A Path Analysis of Factors that Lead to and Mediate Client Success
Vol. Volume 12, Number 1 March/2007
Michele Cranwell Schmidt and Jane M. Kolodinsky
Through a path regression analysis of data from the Vermont Micro
Business Development Program, this study examined the relationships
between client characteristics, program activities, interim outcomes,
and impacts, to understand factors that lead to and mediate client
success in microenterprise 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