Which is the most binding constraint to microenterprise development, human capital orfinancial capital? To answer this question, we present the first field experiment that jointlyinvestigates these two constraints for poor microentrepreneurs, by introducing separatetreatments of business training and a business grant. We combine survey data and data froma lab experiment to investigate treatment effects on business results, business practices,business skills and mind-set. Our study demonstrates a strong effect of business training onmale entrepreneurs, while the effect on female entrepreneurs is much more muted. There is noeffect of the business grant for either males or females. The results suggest that human capitalmay be the more important constraint for poor microentrepreneurs, but also point to the needfor more comprehensive measures to promote development among female entrepreneurs
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