CFED: New Research Broadens Understandings of Microbusiness Financial Vulnerability

The Corporation for Enterprise Development (CFED) recently released a study titled In Search of Solid Ground: Understanding the Financial Vulnerabilities of Microbusiness Owners. In 2013, with support from MasterCard’s Center for Inclusive Growth, CFED launched an effort to gather insights from business owners themselves, identifying their greatest challenges and informing the suite of solutions that might address them. The study sheds light on the many factors that contribute to or detract from microbusiness owners’ financial capability--a combination of knowledge, behaviors, and access and use of safe, appropriate financial products and services.

Findings from the study show that microbusiness owners’ business and personal finances are closely intertwined, and that they are dealing with significant financial vulnerabilities that reach far beyond access to credit. They also reveal a number of other ways in which microbusiness owners might be susceptible to financial shocks or ill-equipped to make calculated decisions about growth, many of which must be resolved before even considering taking on debt in a way that positions them for success rather than greater vulnerability. While the study confirms some preexisting assumptions about critical components of microbusiness owners’ financial capability, it also uncovers findings that will expand the current narrative and inform new solutions. Going forward, CFED will engage partners in a national dialogue focused on moving from research to action.

Download the research study and brief from CFED’s Resource Directory.

Questions? Contact CFED's Lauren Williams or Manny Hidalgo.