How Microenterprise Development Contributes to CED
The term microenterprise, also known as microcredit or microfinance, refers to an array of financial services to help poor people, mostly women. Although microenterprise practitioners may differ on the appropriate uses of the terms, microlending, microenterprise, microfinancing, and microcredit are often used interchangeably and involve making small loans to low-income microentrepreneurs. Significantly, the term microcredit is most often used by international microfinance practitioners. U.S. practitioners use the term microenterprise because starting a microbusiness in the United States and other parts of the developed world requires more than just credit. Budding microentrepreneurs also need help with business planning, marketing, legal structures, business licensing and permits, zoning laws, contracts, and copyright and trademark law. All of these services mitigate lenders’ risks and help to improve survival rates of microbusinesses. The Association for Enterprise Opportunity (AEO), a trade association promoting the microenterprise development industry, defines microentrepreneurs as “individuals from all walks of life who are seeking to start businesses or to use existing skills towards supplementing their income.”
Susan R. Jones & Amanda Spratley, How Microenterprise Development Contributes to CED, in Building Healthy Communities: A Guide to Community Economic Development for Advocates, Lawyers, and Policymakers 379 (Roger A. Clay, Jr. & Susan R. Jones ed., 2009).