Entrepreneurship Theory & Practice

Entrepreneurship Theory & Practice


Seeding Entrepreneurship with Microfinance

Guest Editors:
Garry Bruton, Texas Christian University 
Susanna Khavul, University of Texas at Arlington
Donald Siegel, University at Albany, SUNY
Mike Wright, Imperial College Business School

Microfinance is stimulating entrepreneurial activity in developing and developed countries. Although microfinance grew as a means of providing uncollateralized start-up loans to groups or individuals living in poverty, today, it reflects a range of financial services including debt and equity financing, insurance, savings, and retirement plans. Denominated in relatively small amounts, microfinance instruments provide entrepreneurs with financial services that are difficult for them to acquire otherwise. 

As its popularity has grown, the provision of microfinance has become a contested terrain. Banks, savings and loan organizations, for-profit investment funds, insurance companies, and mobile network operators are all vying for a share of the microfinance market. In addition, individuals have new opportunities to participate in microfinance as microangels and microlenders. Revolutionary developments in technology are also changing the landscape of entrepreneurial financing, and, in the case of new technology and media ventures, may be superseding the traditional role of seed venture capital. Specifically, mobile technologies, social networking tools, and crowdfunding mechanisms make it easier to pool and distribute small amounts of seed capital from individuals who want to invest in or lend to entrepreneurial ventures. The evolution of microfinance is accelerating, yet our understanding of the effects that it has on entrepreneurs starting and growing new ventures remains in its infancy.

In this special issue, we ask how is the expanding role of microfinance changing the nature of entrepreneurship? To answer this question, we encourage researchers to draw broadly from theoretical traditions across the social sciences (e.g. economics, sociology, psychology, and public policy) and consider multiple levels of analysis. The literature on microfinance so far has employed agency theory to explain the classic group lending processes, prospect theory to explain the risk preferences of entrepreneurs, and social capital theories to explain networks on which entrepreneurs rely. 

Likewise, researchers have drawn on institutional theory to explain the emergence and evolution of different microfinancing instruments. We welcome research that builds on existing literature and asks nuanced questions. However, as microfinance moves beyond its origins, we also see opportunities for researchers to use many other theoretical perspectives such as social network theories, behavioral economics approaches, among others, to extend our understanding of the phenomenon.

We welcome rigorous empirical and conceptual papers that develop and test theory. Longitudinal, qualitative, and experimental field studies are encouraged, as are studies using large sample, network, focused case studies, or meta-analysis. Papers set in emerging or developed economies as well as across multiple countries are of high interest. Given the prominence of poverty alleviation and entrepreneurial emergence in the conversation about microfinance, researchers should address the policy implications of their findings.

Submissions should be prepared in accordance with ET&P’s style guide and submitted to http://mc.manuscriptcentral.com/etp by January 31, 2013. Be sure to indicate that your submission is for the Seeding Entrepreneurship with Microfinance special issue. 

After the initial round of reviews, the authors of short-listed papers will be invited to an ET&P special issue conference at the SUNY Global Center in New York City on October 3-4, 2013. At this conference, authors will receive developmental feedback from the guest editors and invited discussants. The special issue will be published in 2015. 

Questions regarding the special issue can be addressed to: Garry Bruton (g.bruton @ tcu.edu ), Susanna Khavul (skhavul @ uta.edu), Donald Siegel (dsiegel @ albany.edu), and Mike Wright (mike.wright @ imperial.ac.uk).