Structural Heterogeneity and Poor Microenterprises in Argentina
Marta Bekerman and Cecilia Rikap
Social form of labor ( ...continuation )

The total current workforce in the 100 businesses consists of 168 workers, including the owners of the businesses. A common structural characteristic is the low supply of workers; this figure per business increases as we move from infrasubsistence enterprises to those with small surpluses.

One figure that reveals how these business people address the limits of their own productivity is that 65% dedicate more than 40 hours a week to the business. The large majority of the “subsistence” microenterprise owners and those “with small surpluses” work more than 40 hours a week (69% and 80% respectively). However, in the case of infrasubsistence enterprises, the majority (59%) work 40 hours a week or less. In other words, the length of the workday is closely tied to the type of enterprise in terms of its economic results.

Supply of resources and infrastructure

An analysis of the supply of productive resources leads us to ask about the average quantity of available machinery and infrastructure at the microenterprises studied. It is important to note that some enterprises do not require machinery. However, the most evident example of enterprises that do is the textile business which has a strong participation of infrasubsistence enterprises. This is one of the reasons why 68% of the infrasubsistence enterprises do not have their own machinery or have a scarce amount.

In the subsistence enterprises, this tendency of limited machinery stock is seen again: 31% do not use machinery. Nevertheless, almost all of the enterprises with small surpluses do use machinery. Thus, this structural variable is relevant to the economic results of the enterpreneurs.

Within this context, when the enterpreneurs were asked if they had sufficient and adequate machinery and tools, the majority who use machinery responded that the quantity of machinery was sufficient but the quality was inadequate. The majority of those interviewed who use machinery, mainly from subsistence and small surplus enterprises, expressed concern regarding the need to renew their machinery. So although they recognize the inadecuacy of their supply of fixed capital, there is a lack of reinvestment in new machinery, even in regards to replacing amortized capital assets (Bekerman, 2009: 526-527).

On the other hand, the availability of infrastructure –“a physical space for business activity that is separate from the home”– represents an essential problem, not only for those who lack their own physical space for their business (51%), but also for those who have a physical space, since in most cases, the conditions of existing spaces are far from adequate.

In regards to the sales points of products, an important positive association exists with the type of enterprise. In fact, in the case of infrasubsistence and subsistence enterprises, the sales point is predominantly located in the home of the enterpreneur (32 and 38% respectively), whereas in the case of enterprises with small surpluses, sales predominantly take place at more than one site, although mainly at fairs and sites outside of the home (23% in each case).


Another important element to be considered is access to credit. None of the enterprises interviewed has accessed credits through the formal system. To the contrary, their only access to credit has taken place through a non-profit organization that grants microcredits.8 Another form of accessing financing, although it is only used by 9% of those interviewed and is exclusively destined to the Bolivian community, is Pasanaco.9 Informal lenders, known as userers, also operate in these neighborhoods. One of the principal complaints is the difficulty of accessing credit for purchasing expensive machinery. 83% of those interviewed have not received credits to this end, although they require them in order to further their business activity.

Another important dimension studied was the capacity for financial management and negotiations, that is to say, the capacity of the loan recepients to autonomously apply for and negogiate their financing needs or, concretely, to be able to calculate their need for credit. The survey showed that only 50% used some form of calculation to determine how much money they need when they request financing. Those who do not make any special calculations explain that they will accept whatever amount they are awarded. To a certain extent, this answer reflects their understanding of credit and the reasoning in the experience of these entrepreneurs which leads them to request the maximum amount that the institution is willing to grant. On the other hand, it could indicate that the credit awarded is insufficient.

8 This is the civil association Avanzar por el Desarrollo Humano (“Progress for Human Development”) to which the majority of the microenterpreneurs interviewed belong. (See

9 This is a group generally conformed of 10 to 20 individuals. Each person contributes a set amount to create a common fund. The entire fund is withdrawn by one of the members (according to an order that is drawn at ran-dom) and when the fund is returned, it can be withdrawn by the next person in line. The recepient of the money defines its use.