The European Commission defines microenterprise as a business that employs fewer than ten people and whose annual turnover does not exceed €2 million. BBVA Momentum, the BBVA program that supports social entrepreneurship, works with companies such as these, which are distinguished by an enthusiasm to grow in order to increase their positive impact.
The entrepreneur — whether working alone or with a small team to undertake his or her venture, usually with just a small amount of seed funding — cuts a commonplace figure in today’s world of business. According to data from the Development Bank of Latin America (CAF), microenterprises represent 88 percent of total companies in Latin America, where, "they are engaged in subsistence and self-employment activities."
In Europe, these small enterprises are more frequently associated with “industrial value chains of dynamic sectors; they participate in the development of technology and innovation and significantly contribute to exports.” According to the Spanish Association of Small and Medium-sized Enterprises (CEPYME), microenterprises and SMEs represent 99.8 percent of the “old continent’s” business community.
It is less usual for these small businesses from day one to benefit from the means to successfully launch a business. Often, they have to start from scratch, with few resources and the obvious drawbacks; nonetheless, there are also some positive aspects for the economy. According to the Stanford Social Innovation Review (SSIR), the benefits of establishing this type of venture are:
Products and services tailored to local economies
Microenterprises are very valuable for the economies where they are established. A study by the University Complutense of Madrid maintains that “they help local and regional economic development in the places where they perform their activity, by creating stable, valuable employment and by contributing to the modernization of said regions.”
Among the companies participating in BBVA Momentum 2019, there are several examples of microenterprises, which have no less of a local impact despite their small size. A good example is the Turkish company Batir, which is invigorating the local economy and raising awareness in the community with their offering of nutritious, vegan food products. "We empower farmers and local producers to transform the life of the community,” explains its co-founder, Başak Duru. They also provide children with workshops on healthy eating in order to ensure a positive impact on future generations.
Batir is invigorating the local economy and raising awareness in the community with their offering of nutritious, vegan food products
Microenterprises provide a cohesive element to society. According to SSIR, "they drive the revitalization of main streets; little cafes, markets and shops become meeting places for the community.”
So All May Eat (SAME) is another microenterprise participating in BBVA Momentum 2019 and is contributing to the creation of a stable community in Denver, Colorado (USA) with their charitable restaurant. “We have been on the cutting-edge of the food justice movement, providing healthy food to everyone, regardless of their ability to pay,” explains its executive director, Brad Allen. SAME's customers donate what they can (volunteer time, money, and/or fresh products) in exchange for a healthy meal. This is the business model that sustains the restaurant, allowing it to provide sustenance to the people it helps. "Many of our customers tell us that SAME has changed their lives; that it has has given them some stability and a community in which to live."
SAME is contributing to the creation of a stable community in Denver, Colorado (USA) with their charitable restaurant.
According to SSIR, microenterprises — especially those that are artesanal in nature — have loyal followers who appreciate the authenticity and uniqueness of their products.
The Mexican company, Lovenöck, another company participating in the latest round of BBVA Momentum, creates bags and accessories inspired by Mexican textile art and based on the principles of ethical and sustainable fashion. Their products are the work of at-risk or vulnerable women artisans. "We aim to offer an alternative product that empowers the women who create and use it", says the company’s founder Tania López.
Lovenöck creates bags and accessories inspired by Mexican textile art and based on the principles of ethical and sustainable fashion.
One of the main attractions for their clientele is that they create limited collections: only 20 pieces of each item are created. Furthermore, the company’s devotees have the option to become ambassadors for the brand, helping to sell the products to family and friends and spreading Lovenöck’s inclusive philosophy.
Support for future entrepreneurs
SSIR discusses a trend in the world of microenterprise, "by working in neighborhoods with other owners of successful businesses, they can end up creating micro-incubators and centers of innovation that demonstrate it is possible to set up a business.”
Many of the BBVA Momentum ventures are involved in a local ecosystem where they are bolstered by business advice, financing, and training. Such is the case of the microenterprise, Insitu Business Group, which seeks to enhance the role of women in society and works to reduce the imbalance in finance access, which the women leading these businesses often encounter.
Insitu Business Group seeks to enhance the role of women in society and works to reduce the imbalance in finance access, which the women leading these businesses often encounter.
“We believe that our responsibility is to achieve concrete goals like strengthening the role of women in the economy. That's why we offer women access to personal growth, education, entrepreneurship and financing,” explains its CEO, Elizabeth Román Soto. Her initiative #MujeresQueInspiranMujeres (“women inspiring women”), which has launched mobile training and support centers, has already made an impact on more than 300 customers.
Click here learn more about the entrepreneurial ventures sponsored by BBVA Momentum.