Structural Heterogeneity and Poor Microenterprises in Argentina
Marta Bekerman and Cecilia Rikap
INFORMAL SECTOR IN POOR URBAN SETTLEMENTS IN SOUTHERN BUENOS AIRES2

We based this study on different sources of information available from the civil association Avanzar, from their trainers, project coordinators, and credit officers, as well as information from previous studies with microentrepreneurs who have received loans from Avanzar (Renaud and Iglesias, 2008). These sources guided the selection of the instrument for collecting information, as well as the kind of format to be used. The producers mainly live in what are called “emergency villages” (villas de emergencia) which are poor urban settlements in Buenos Aires; their work is not registered with the State, they have very limited resources for production, and a significant percentage are foreigners, among other relevant traits. This led us to use a mainly precoded survey in order to reveal objective indicators of needs and problems, instead of employing subjective questions that may have manifest their limitations for free expression.

The instrument used for data collection was a survey applied to a randomly selected sample of 100 microenterprises from the data base of current and past Avanzar loan recipients. The sample sought to represent the differences that exist in the target universe in regards to: i) type of economic activity (food, textiles, other), ii) neighborhood (29 cases from Piletones, 14 cases from Soldati, 13 cases from Fátima, 22 cases from Ciudad Oculta, 5 cases from INTA, and 6 additional cases), iii) sex and iv) years of relationship with Avanzar. To select the proportion of people to be interviewed in each category, the census information for these neighborhoods was consulted, in addition to information from the Avanzar data bases.3

It is important to mention that the productive segment under study is not only heterogeneous in regards to other segments of society but also within its own environment, as can be observed throughout this work.

To reflect these differences, we will present a typology of enterpreneurs that considers their levels of net income4 and the subcategorization developed by Coatz et al. (2010: 56-60) within stratus III, “the Informal Sector”. The following classifications were reached, as seen in Table 1, which summarizes the survey results according to level of income.

We can observe that the majority are microenterprises “with small surpluses”, followed by “subsistence” enterprises and lastly, by “infrasubsistence” enterprises. Following, we will analyze the behavior of certain structural, explanatory variables of economic performance such as the social form of labor and the supply of productive resources of these microenterprises.

2 This study was developed based on the results from a survey carried out in 2010 with 100 microenterprises in the following poor urban settlements villas de emergencia of Buenos Aires: Los Piletones, Village 3 (the Fátima neighborhood) and Village 15 (Ciudad Oculta or “The Hidden City”). The figures of net income were only available from 90 microenterprises.

3 The survey was carried out between January and March 2010. The entrepreneurs were interviewed in the Avanzar offices in the Soldati neighborhood and in a cafeteria in the Ciudad Oculta neighborhood. The data obtained was processed using SPSS, which possesses specific tools for data analysis.

4 It is important to note that it was difficult to determine the microenterprises’ level of net income due to challenges faced by the people interviewed in fully understanding the categories that compose net income. For this reason, the questions formulated in the survey allowed for a careful step-by-step reconstruction of income in pesos from sales from December 2009 to March 2010, from which expenses from the week prior to the interview were subtracted. Using this figure of weekly net income, the monthly net income was calculated by multiplying it by four weeks per month.

5 This classification includes the results of 90 interviews (of an overall total of 100) in which it was possible to clearly determine net income.