Micro and Small Enterprise Development in Bolivia, Seeking Opportunities

University essay from Lunds universitet/LUMID International Master programme in applied International Development and Management

Abstract: During the last three decades, there has been a growing interest in the role of Micro and Small Enterprises (MSEs) as engines of economic development and pro-poor growth. In Bolivia, MSEs are the main source of employment but have alarmingly low levels of productivity. Therefore, the purpose of this study was to seek for an explanation of the relevance of MSEs´ growth in the Bolivian context as well as to understand the different factors affecting its performance. In order to conduct the analysis, a mixed methods approach primarily based on quantitative data analysis was used. On the basis of the analysis, it was concluded that MSEs´ growth has a direct impact on employment levels in Bolivia and MSEs are thus an important tool in the fight against unemployment. Results also showed that Bolivian MSEs are characterized by a relatively low use of external financing, poor levels of expenditure on fixed assets, technology and quality, and an intensive use of unqualified labour as their main resource to achieve results, all of which negatively affects their productivity. Additionally, it was found that the environment is not conductive for business development and it constrains MSE´s performance and growth.

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