Skip to main content
Faculty Research

Microenterprise Education


It’s a dilemma every world traveler has encountered: walking down a dirt road in a third-world country, seeing people selling fruits and homemade trinkets, and noticing the desperation in their eyes. The appeal from those in poverty is literally a plea from billions who live at the bottom of the economic pyramid. Organized efforts to assist the poor in developing nations bless generations of poor who desperately need our help.


The Church of Jesus Christ of Latter-day Saints is growing rapidly across the world, and its members are not exempt from the challenges of poverty. Researchers James W. Lucas and Warner P. Woodworth estimate that by 2030, 85 percent of church members will reside in Latin America, Africa, and Asia, where large segments of the population live in poverty.1

Brigham Young reminded the Saints of their responsibility to help those who had been baptized to become “healthy, wealthy, and wise.”2 More recently, President Gordon B. Hinckley has said, “Where there is widespread poverty among our people, we must do all we can to help them to lift themselves, to establish their lives upon a foundation of self-reliance.3

In April 2001, President Hinckley announced a new program to help alleviate poverty among church members in developing nations. He explained that the Perpetual Education Fund (PEF) was designed to provide low-interest loans to young church members whose lack of education hinders their ability to get well-paying jobs. Since its inception, the PEF has literally transformed the lives of thousands of recipients, lifting families out of what President Hinckley calls the “pit of poverty.”4

The PEF works well in areas where well-paying jobs and educational opportunities are available. But in places where jobs do not pay enough to sustain a family, or where jobs are simply not available, loans for traditional education may not be the best way to break the chains of poverty. In those places, members can earn money only by creating their own jobs, usually through self-employment in a microenterprise.


Many poor people create their jobs by doing what their parents and neighbors do: they roll out a blanket or set up a stand to sell fruit, sandwiches, cold drinks, or homemade goods. In doing so, they become microentrepreneurs—literally small-business owners. They enter the world of microenterprise, not because they are knowledgeable about business or plan to earn money that way long-term, but because they simply have no other choice. As “necessity entrepreneurs,” these hardworking people are in business because it is their only method for survival.

Without a clear vision of how to run a business, these necessity entrepreneurs learn principles in the most costly way possible—by trial and error. They generally find that even after working long hours, seven days a week, they are barely able to take home enough money to buy food for another day.

Microentrepreneurs long for something that will move them beyond the level of subsistence—a level that often leads them to take out high-cost loans from predatory loan sharks who sometimes charge as much as 20 percent interest per week.

Fortunately, microcredit, an economic-development tool, provides low-cost, start-up, or operational capital to millions of microentrepreneurs. Microcredit lenders, usually operating as nongovernmental organizations (NGOs), seek to eliminate poverty by providing small loans to those who want to start microenterprises or expand their already-operating business to increase income. The microentrepreneur will take the loan, receive some training regarding how to repay the loan, and then set out to earn money.

Although most microenterprises aided by microcredit loans lift families above their nation’s poverty line, few ever move beyond the ability to provide a somewhat meager income. These low-interest loans essentially enable microentrepreneurs to just do more of what they have always done—sell goods on the street corner or in the marketplace. Thus, while microcredit is doing much good, it is clearly not the sole or complete solution to poverty.

Muhammad Yunus, the 2006 Nobel Peace Prize winner, who established the world-renowned Grameen Bank, is generally regarded as the father of microcredit. He said that most microcredit organizations don’t teach business skills to their borrowers for two reasons: such training is time-intensive and costly, and when training is provided and the business fails, borrowers tend to blame the lender rather than themselves—creating ill will and leaving unpaid loans.5


An additional key to improving poverty-elimination efforts in developing countries lies in a new type of education. Microenterprise education courses teach universal, proven business skills that help people develop or improve a business and turn it into a successful venture that can provide significant income. Such training is designed for impoverished people who are willing to put in the disciplined effort required to learn sound business principles and apply them in microenterprises.

Although microenterprise education is fairly new, dozens of NGOs are already engaged in the work. Two notable organizations are the Academy for Creating Enterprise and BYU’s Economic Self-Reliance Center.

The Academy for Creating Enterprise

The Academy for Creating Enterprise is a nonprofit school my wife, Bette, and I established in the Philippines in November 1999. Filipinos are literate, generally fluent in English, and have few opportunities to get good jobs in their own country, no matter how well-educated they are. The LDS Church is growing quickly in the Philippines, which has more members than any other nation except the United States, Mexico, and Brazil. To help strengthen active church families, the academy focuses its resources on providing microenterprise training for Filipino returned missionaries because they are self-disciplined and have demonstrated an ability to study and work hard.

Initially, the academy taught students business rules during an eight-week course, hoping they would be able to apply the principles correctly once they returned to their hometowns. However, they struggled to stick with the habits of successful entrepreneurs once they returned home and started working in their businesses. Simply knowing what should be done to propel themselves out of poverty was not enough. The graduates are torn between their traditions of their culture or adopting a culture of success. They must learn to act in ways that result in greater individual economic success, not just in a more bearable survival. The poor already instinctively know how to survive; however, they generally don’t know how to thrive sufficiently to get out of poverty.

To teach the business principles and encourage behavioral change, we developed, taught, and published a curriculum titled Where There Are No Jobs. The curriculum is based on a set of principles for microenterprise success. With this guide, the students learn to separate business and personal money, establish sales goals, manage their cash flow, keep accurate records, and not give away merchandise to family and friends. The curriculum uses case studies, role plays, class discussions, and internships to give students a firm understanding of how and why they should apply these vital principles in their businesses.

The truth of those principles—and the power they have to change lives—is illustrated by the fact that of the one thousand academy alumni, about 83 percent are involved in an income-generating activity. Hundreds of the graduates are teaching these principles to others in their branches, wards, and stakes in non-official settings. The graduates say they are motivated to teach others how to become more self-reliant because they understand how the principles they learned can change lives. They truly embody President Joseph F. Smith’s definition of charity, which they memorize: “Our idea of charity, therefore, is to relieve present wants and then to put the poor in a way to help themselves, so that in turn they may help others.”6

BYU Economic Self-Reliance Center

The BYU Economic Self-Reliance Center was established in 2003 to research successful methods of helping families become self-reliant, incorporate those principles into a universal model, and help partnering NGOs replicate them.

Center partners, like The Academy for Creating Enterprise, are developing curricula and models of microenterprise education to help others. Both Marriott School students and faculty members are working with more than two dozen NGO partners in researching best practices in helping others become self-reliant through microenterprise development. The Economic Self-Reliance Center becomes a clearinghouse for the exchange of innovations or improved practices. Through its broad out-reach activities, the center shares these practices with organizations that are interested in economic development. For more information, visit

Other NGOs throughout the world are also adopting microenterprise education efforts. The LDS Church is one of those organizations. Its Employment Resource Services group now has a Self-Employment Workshop to complement the Career Workshop that has been used for years. This workshop was created with help from the academy and ESR Center.

Success Stories

One academy success story is Sheila Gusay, who, after her mission, completed a four-year college pharmaceutical course. She excelled in her studies and was prepared for work in a pharmacy, but there were no jobs for pharmacists in her hometown, so she took a job on an assembly line in a factory—a position for which she was overqualified and underpaid. Months later, Sheila enrolled in and graduated from the academy with a solid business plan for starting her own small pharmacy. She now operates her own small drugstore, employing herself and two assistants.

Another example is Ronald Aban, a college dropout who worked part time as an accounting clerk before attending the academy. He had married shortly after his mission but couldn’t find permanent work. His wife lived with her parents, and Ronald worked and lived in Manila, a twelve-hour bus ride from his wife. While at the academy, Ronald started a business selling strawberries to a fruit wholesaler. Ronald’s success attracted the attention of a guest speaker at the academy who invited Ronald to help him build a business selling cell phones. This business has now grown to thirty-five franchises—most of them owned by academy alumni. Ronald owns two franchises and 24 percent of the franchisor’s parent company, which employs more than one hundred people.


In the book The Star Thrower, by Loren E. Eiseley, a young boy walks along the shore throwing beached starfish back in the ocean. The boy was asked how saving a few starfish would make any difference when so many were doomed. The boy picked up another starfish and as he threw it back said, “It made a difference for that one.”7 Although we cannot assist everyone living in poverty, microenterprise education can make a difference. Teaching correct principles and helping microentrepreneurs change their business practices can and does have a dramatic effect on the quality of their lives.


  1. Practice separate entities. Keep personal money and business money separate.
  2. Start small; think big. Learn the basics when your business is small and mistakes are less costly, then grow.
  3. Keep good records. Success comes from beating yesterday’s sales and profit records.
  4. Pay yourself a livable salary. A salary must cover living expenses so “stealing” from the business is not necessary.
  5. Buy low; sell high. Bigger differences between purchase price and selling price mean greater potential profits.
  6. Don’t eat your inventory. Consuming inventory or seed capital will quickly kill your business.
  7. Buy on credit, sell for cash. Selling a product before you must pay for it increases cash flow.
  8. Increase sales; decrease costs. As the spread between sales and costs grows, so do net profits.
  9. Turn your inventory often. Profit is made every time inventory is priced correctly and sold.
  10. Value your customers. Success comes when customers keep coming back and buying more.
  11. Differentiate your business. Give customers a reason to return. Be better, cheaper, faster, and more convenient.
  12. Make a profit every day. If a workday goes by without making a profit, it’s a loss.

© Academy for Creating Enterprise


Article written by Stephen W. Gibson

About The Author
Stephen W. Gibson is a business management faculty member and serves as senior entrepreneur in residence at BYU’s Center for Entrepreneurship. You can reach him at


  1. James W. Lucas and Warner P. Woodworth, Working Toward Zion: Principles of the United Order for the Modern World (Aspen Books, 1996).
  2. Brigham Young, Journal of Discourses, Volume 18 (London, England, 1877), 354.
  3. Gordon B. Hinckley, “The Perpetual Education Fund,” Ensign, (May 2001): 51.
  4. Ibid.
  5. Muhammad Yunus, personal interview (Provo, Utah, 1998).
  6. Joseph F. Smith, “The Message of the Latter-day Saints on Relief for the Poor,” Improvement Era, (August 1907): 832.
  7. Loren C. Eiseley, The Star Thrower (New York: Random House, 1978).