International development agencies and non-governmental organisations often seek to advance community development by fostering entrepreneurship. The premise is that poor people can enhance their household incomes by establishing small businesses or by adding value to natural resources.
Such programmes commonly include training and the provision of loans to enable micro-entrepreneurs to get started. But these interventions aren’t straightforward and often fail to achieve their objectives.
Prior research has pointed to the fundamental economic challenges of entrepreneurship in the context of poverty. Cultural and institutional factors also play a role. Researchers have argued, for instance, that cultural norms of collectivism shape how entrepreneurs define themselves. They are likely to prioritise their roles as mentors or community safety net. This constrains their ability to innovate and grow their businesses.
