Community extension MSME's entrepreneurial activities in relation to poverty reduction

Abstract

IntroductionHigher Education Institutions play a role in poverty reduction by implementing community extension programs focusing on capacity building and entrepreneurship training. Cebu Technological University programs offer these programs through various skills training to its targeted beneficiaries. This study aims to assess the community extension Micro-, Small and Medium-sized Enterprises (MSMEs) entrepreneurial activities concerning poverty reduction. The research participants are beneficiaries of community extension programs that primarily focus on capacity building and entrepreneurship training, and they eventually become entrepreneurs.MethodUsing a cross-sectional survey, 172 valid responses were analyzed, with entrepreneurship education (EE), budgeting financial literacy (BFL), access to credit facilities (ACF), and entrepreneurial performance (EP) as predictors of poverty reduction (PR). Results from Partial Least Squares - Structural Equation Modeling (PLS-SEM) generate insights from the seven hypothesized paths of the proposed model.Results and discussionFindings revealed that entrepreneurship education (β = 0.258, p < 0.05), budgeting financial literacy (β = 0.147, p < 0.05), and access to credit facilities (β = 0.541, p < 0.001) help reduce poverty. However, no significant relationship was found between entrepreneurial performance and poverty reduction (β = 0.132, ns) whose cause may be directly pointed to the pandemic's significant impact on MSME's entrepreneurial activities.ConclusionThis study confirms the importance of entrepreneurship education, budgeting, financial literacy, and credit access in promoting entrepreneurial success and reducing poverty.