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FORUM ON MICROENTERPRISE
IDE
SPECIAL REPORT
Publication of the Inter-American Development Bank
The Multilateral Investment Fund. that
supports microfinance institutions with equi-
Declaration of support
ty investments and provides other services.
The IDB is also carrying out technical
The microenterprise forum took place
against the backdrop of an historic San
MICROENTERPRISE
assistance projects to support microen-
terprises. among them several regional pro-
José meeting of the heads of state of
grams. One will set performance standards
countries of Central America and the
for microfinance institutions to improve their
Caribbean. At the meeting's close, all
financial administration and strategic plan-
signed the Declaration of San José,
ning. Another is focusing on improving the
which affirmed their support for the
operations of rural-based institutions. Fi-
small business sector.
nally, an IDB-financed program to train
microfinance specialists will result in the
"We agree that micro, small and
creation of a consortium of training institu-
medium-sized businesses are im-
tions.
portant for the social develop-
ment of our countries. These en-
For further information. contact the
trepreneurial undertakings make
Microenterprise Unit. B-0600. Inter- Ameri-
it possible for a wide range of so-
can Development Bank. 1300 New York
cial sectors to expand produc-
Ave., N.W., Washington, D.C., 20577. Fax:
tively and make a decisive con-
(202) 623-2307. E-mail: sds/[email protected]:
tribution to the democratization
or http://www.iadb.org/sds.
of capital and the equitable dis-
tribution of wealth.
"We will broaden our efforts
to promote such businesses and
Hands across
to increase their capabilities. We
also request that the Inter-
American Development Bank,
the World Bank and other insti-
the world
tutions and donors continue to
strengthen their support of these
activities."
HE UNITED STATES AGENCY FOR INTERNA-
T
tional development is investing $120
José María Figueres Olsen
Success from hard work and ingenuity.
million annually worldwide to support
President of Costa Rica
the following performance-based pro-
United States first lady Hillary Rodham Clinton was among the guests who heard microentrepreneurs tell what it takes to grow a small business.
grams:
William J. Clinton
Steadfast ally
Grants to established microfinance orga-
President of the United States of
nizations.
America
CONFERENCE BIG BUSINESS NORMALLY
Grants to build institutional
HE INTER-AMERICAN OPMENT BANK
capacity of microfinance in-
Carlos Roberto Reina Idiáquez
A
presentations by corporate executives.
The people
lady Josette Altmann de Figneres. and their
USAID
devotes a large part of its agenda to
counterparts from Nicaragua. Honduras.
Guatemala and Belize. "We have all won-
T
has been a pioneer in microenterprise
stitutions and exchange visits.
President of Honduras
But when microenterprise is the sub-
dered how we can promote development
development since it launched its Small
Matching grants for U.S.
ject, the head table is usually dominated by
Projects Program in 1978. Since then.
Leonel Fernández Reyna
speak up
without sacrificing traditional values, said
private voluntary organiza-
people who have never actually created a
Clinton heraddress. Microenterprise
the 1DB has undertaken new initiatives, such
tions.
President of the Dominican Republic
business. who have never had to nurse it
offers a partial answer, for it is sustained by
as financing countrywide microenterprise
A program to manage loan and guarantee
along in good times and bad times. who
those very values that have stood us so well
programs and strengthening the network of
vilities supporting efforts of commercial
Armando Calderón Sol
depend on it for their livelihood.
recommendations that constitute a road map
for SO long: hard work. ingentity sacrifice a
financial institutions that specialize in serv-
banks to provide microenterprise credit.
President of El Salvador
This was why the meeting held in May
for success in croenterprise
desire for a better life."
ing the sector.
Grants from USAID overseas missions to
1997 in San José. Costa Rica, was special.
The small businesspeople featured here
IDB President Enrique V. Iglesias under-
Just since 1990 alone. the
support microenterprise programs.
Alvaro Arzú Irigoyen
Called the Regional Consultative Forum on
(see pages 2-3) were three among many who
scored the success of microenterprise in al-
IDB has lent more than $520.7
In addition. USAID supports training and
President of Guatemala
Microenterprise: Lessons and Opportuni-
gave first-hand accounts of their journeys to
leviating povertyand improving the status of
million to benefit mestimated
extensive research into microenterprise best
ties. its 450 attendees included top political
success in: business environment filled with
women. But he declared that more must be
700,000 microent repreneurs
practices. including business development
Arnoldo Alemán Lacayo
figures. internationally recognized experts.
obstacles. In addition, each of the micro-
done. particularly in providing technical as-
inevery one of its Latin Ameri-
services. village banking. savings mobiliza-
President of Nicaragna
and even the first ladies from the Central
entrepreneurs received help some critical
sistance. training in business management
can and Caribbean member
tion, management information services and
American countries and the United States.
juncture specifically. access to credit and
and improving the legal environment for
countries.
commercial banks. Activities to assess the
Manuel Esquivel
But the stars were )small-scale manu-
technical assistance.
microenterprises. Mark Schneider. USAID as-
During the next five years. the Bank will
impact of microenterprise services include
Prime Minister of Belize
facturers. merchants. service providers and
"Although we can walk on our own, we
sistant administrator for Latin America and
invest $500 million in microenterprise in
detailed study as well as the development
farmers. Their messages. practical and often
still occasionally need a helping hand," said
the Caribbean. described some hopeful signs
three main ways:
and testing of assessment tools that can be
personal. left impressions participants would
small-scale businesswoman Berta Esmeralda
especially in the area of financing. "We have
The Small Projects Program, which con-
used in the field.
MICROENTERPRISE, 1998. Photos by
never forget.
Alarcón. of El Salvador.
seen microfinance institutions become the
times to provide credit and training services
David Mangurian. Produced by the Periodi-
The meeting's sponsors, the Inter-Ameri-
The testimonials. intenselv human sto-
trusted links between microenterprise and
through local NGOS and other groups.
For more information. contact the Of-
cals Unit. Inter-American Development
can Development Bankand the United States
ries of resourcefulness. creativity and sheer
the formal banking system." he said. citing
The Global Microenterprise Loan Pro-
fice of Microenterprise Development, USAID.
Bank. 1300 New York Ave., N.W., Washing-
Agency for International Development. were
grit, were presented before an attentive and
institutions in Bolivia and Guatemala that
gram. that channels IDB funds through na-
RRB Room 2.11-024 Washington, D.C.
ton. D.C. 20577. Tel. (202) 623-1000.
determined the event would leave more than
influential audience. Among those present
depended on subsidies at the beginning but
tional microfinance institutions, primarily
20523-0058. Fax (202) 216-3593. Internet
Internet: http://www.iadb.org.
memories. So in a day-long series of work-
were United States first lady Hillary Rodham
that are now self-sufficient competitors in
commercial banks.
http://www.mip.org.
shops. participants hammered out agroupof
Clinton. accompanied by Costa Rican first
the commercial banking sector.
IDB SPECIAL REPORT 1998
FORUM ON MICROENTERPRISE
Prescription
Investment Fund. With the money she
bought a stock of shoes.
Today Alarcón manages five shoe stands
under the name "Calzados Bertha." Her
credit record is so good that she recently
for success
borrowed $5,000 for further expansion.
"I have 25 years of experience in this
business and ve managed to support three
Workshops produce blueprint for action
children and my mother with my earnings,"
she said. "1 have even been able to send my
eldest daughter to science
HESANJOSE CONFERENCE'SMOSTGRAPHIC
invest in needed infrastructure.
the University of North Carolina."
T
moments came when microentre-
At the same time, microfinance organiza-
Alarcón urged participants at the forum
preneurs described their survival tech-
tions need a sustainable source of financing
to have faith in microentrepreneurs, and to
niques for coping with very difficult
for technical assistance and training They
continue lobbying for better and faster
conditions. It struck many participants that
noted that microfinance and community
sources of credit for men and women like
their prescriptions for success also apply to
development organizations cannot expect to
herself. We are proving that we are respon-
the and international organizations that
fully recover from clients the cost of their
sible. that we repay our loans and that we're
serve them. according to Marguerite Berger.
services. at least in the initial stages. There-
determined to get ahead,' she said.
chief of the IDB'S Microenterprise Unit.
fore. they must rely on public subsidies and
For example, successful microentre-
private charitable donations.
preneurs learn early on that they must put
Finally, workshop participants agreed that
the customer first. One must work long and
community-based organizations must have
Sewing for success
hard to win a customer they said, but it only
clear property rights. be committed to effi-
takes one false step to lose one. The same
ciency in providing services, and have as
Alba Argentina Xica de Cotón began work-
goes for microfinance programs. said Berger.
their goal institutional sustainability They
ing at age 10 in Quetzaltenango, Guatemala,
Whereas once they were the only institu-
said that the state should do what it can to
helping her parents "so that my brothers
tional lender available to low-income clients.
facilitate rofinance organizations. but not
could get ahead. Thanks to those efforts.
they now face competition from banks, fi-
to engage in financing activities directly
she now has two brothers who are profes-
nance companies and credit unions.
sionals she said proudly.
Similarly, roentrepreneurs must live
But Xica de Cotón's work ethic has ben-
by their wits. using both creativity and flex-
Improving financing
Organic farmer Guerrero applies an insecticide he makes by boiling and fermenting seven insect repellent plants. His vegetables command premium prices.
efitted more than her brothers. Today she
ibility to weather constant economic and
owns and operates a sewing supply business
personal crises. In recent years. microfinance
products and services
with the help of her husband and daughter.
organizations have also started to reinvent
But to go that additional step and grow
Workshop participants emphasized the im-
the business. microent repreneurs need out-
Budding organic farmer
With her income, she sends her own chil-
themselves. constantly looking for new ways
dren to school. Several years ago, Xica de
to meet their clients financial needs. says
portance of giving place
side help. In many cases. donor agencies and
Cotón received a small loan from FUNDAP, a
Berger. Now. international development
to deposit their savings. With safe. secure.
governments must step in to help a
Henry Guerrero. a 26-year-old farmer from
local microcredit institution supported by
agencies must learn these same lessons.
liquid savings. microentrepreneurs can ac-
microent repreneur to product lines.
Zarcero, Costa Rica, was brought up in a
USAID, and affordable credit has remained an
The resultsof the conference's work-
cumulate wealth for financing investments
build strategic alliances with other businesses.
family of vegetable growers. As a child he
essential part of her life Without those
shops reflected the experiences of hands-on
and meeting social and educational needs.
obtain subcontracts from larger firms, pen-
remembers hearing his father speak about
loans we would not have known what to do.
experts. Among their conclusions were the
In addition to short-term loans. micro-
etrate new markets. exchange information
hisconcern over health dangers posed by the
she said. "Today we are beginning to gener-
following:
entrepreneurs also need a broader range of
on market conditions and adopt technology.
excessive use of chemical pesticides. Later
ate some of our own capital. but it is not
financial services, including life insurance.
In other cases. microent repreneurs orga-
on he joined a pilot project in organic farm-
enough. We need credit to grow the business
housing loans and credit cards. Participants
nized in groups or associations can lobby for
ing techniques organized in 1988 by
and improve enstomer service."
Microenterprise and
urged that formal, regulated institutions be
changes in government regulations or seek
COOPEBRISAS. a local cooperative.
created to offer both loans and these other
community development
government investment in local infrastrue-
"Only a few of us decided to make a
financial services. candidates would
ture. Participants agreed that donors and
serious of it. because it was very riskv. he
be nongovernmenta organizations presently
governments should do more to provide
recalled. During the first few years. he and
Community owned and operated micro-
engaged in microcredit activities that could
nonfinancial services to the microenterprise
the others learned the hard way. suffering
Alarcón sent her daughter to college.
finance institutions help to empower local
turn themselves into regulated financial
sector. Although clients need loans when
serious losses of crops and money. Many
communities and in the process strengthen
entities.
they start their businesses. consolidation and
gave up but Guerrero persisted. When he
the movement toward political decentraliza-
expansion depends on access to market in-
heard about an IDB-funded project that of-
tion and democratic institution building.
formation, training in management and vo-
fered the technical expertise. credit and train-
Sidewalk shoestores
concluded participants in this workshop.
Growing
a
cational skills. and longer-term financing.
ing. he decided that he had found the helping
Locally controlled microfinance and de-
Although some microenterprise organi-
hand he needed to eventually succeed.
velopment organizations promote commu-
microenterprise
Berta Esmeralda Alareón, a 37-vear old
zations often offer both credit and technical
Todav. about 100 local farmers are pro-
mother of three. started selling nail files on
nity self-reliance and autonomy by raising
assistance services. workshop participants
dueing wholesome vegetables that have no
the streets of San Salvador when she was 12.
local capital to meet local credit needs. In
Participants stressed that starting and main-
felt that this was neither necessary nor, in
chemical residues. "We're selling our pro-
Her parents could not afford to send her to
addition. these organizations help to bring
taining a microenterprise is a considerably
many cases. advisable. For one thing. a cre-
duce in the nation's principal supermarkets,
school. but she taught herself to read and
together local microenterprises as an inter-
different proposition from expanding the
dit provider that gives advice becomes partly
and income has improved treinendously."
write.
est group. giving them the ability to improve
business. roentrepreneurs get their start
responsible for the debt in the eves of the
said Guerrero. Even though 1 never got past
Poor but ambitions. Alarcón later set "P
marketing and make use of training and
mainly on the strength of personality and
borrower. In addition. nonfinancial services
primary school. todav am an entrepreneur.
a stall to sell clothing and other goods. Then.
agencies. Finally, microfinance.or-
initiative-determination expertise. knowl-
is a very competitive market. one in which
a horticultural -Imician and a consultant to
in 1988. she received a $200 loan from
ganizations help to give the sector the politi-
edge of their clients, willingness to make
lenders should stay ont of in order to keep
the University of Costa Rica. the National
Financiera Calpia. a finance company in San
cal clout needed to persuade government to
sacrifices. responsibility in using credit.
their costs down.
Learning Institute and the IDB."
Salvador supported by the IDB'S Multilateral
Xica de Cotón used credit to expand.
2
IDB SPECIAL REPORT 1998
IDB SPECIAL REPORT 1998
AEO Policy Paper
ASSOCIATION FOR ENTERPRISE OPPORTUNITY
APRIL 1998
70E. LAKE STREET
# 1120 CHICAGO, IL 60601 312-357-0177
FAX:
312-357-0180*[email protected]
EXECUTIVE SUMMARY
The Role, Complexities and Practice of Microenterprise in the United States
Small business is the backbone of the U.S. economy, accounting for 53.1% of all jobs. (Office of Advocacy, Small
Business Administration). Though often overlooked, the smallest firms within this realm, self-employed individuals and
microenterprises employing fewer than ten workers, are playing an increasingly vital role. As reported by the U.S. Small
Business Administration, while firms of five to five hundred employees in all industries experienced a net loss of
2,065,000 jobs from 1989-1991, microenterprises experienced a net increase of 2,624,000 jobs. Despite their critical role, it
remains virtually impossible for most microentrepreneurs to obtain the capital and management assistance they require
to grow their businesses, develop new products, tap new markets, and create new jobs.
The U.S. Microenterprise Industry
The most striking feature of the U.S. microenterprise industry is its diversity. While the individuals and communities
in the U.S. that need and benefit from microenterprise assistance are quite varied, most microenterprise development
programs target their services to low-income people. Programs are tailored to meet the needs of specific target groups
such as persistently poor individuals and individuals dependent on public assistance, women, minorities, the working
poor, and individuals or business sectors who, for these and other reasons, lack access to credit. Programs may also
specifically target young people, refugees, rural areas, homeless individuals, dislocated, underemployed or unemployed
workers, or ex-offenders.
The goals adopted by each program depend not only on its community and target groups, but also its organizational
structure. In the U.S., a wide range of institutions -including stand-alone microenterprise development organizations,
community development corporations, loan funds, community action agencies, women's organizations, community
development banks and credit unions, housing and social service programs, and federal, state and local government
agencies - are involved in implementing microenterprise development programming. Working independently or as part
of a larger organization or network, microenterprise programs pursue diverse goals that include job creation, business
and community development, poverty alleviation, human
What is the Association for Enterprise Opportunity?
capital development, income generation, and asset devel-
opment and economic self-sufficiency among women,
The Association for Enterprise Opportunity (AEO) is
ethnic minorities and other disadvantaged populations.
the national association of organizations committed to
microenterprise development. We provide our
U.S. microenterprise programs have evolved many
members with a forum, information and a voice to
different development models that use a variety of credit,
promote enterprise opportunity for people and
technical assistance and personal support to meet diverse
communities with limited access to economic
goals. There are three principal program models that
resources.
dominate microenterprise programs in this country.
Founded in 1991, and based in Chicago, AEO also
Credit-led individual loan programs provide loans to
clients on a one-to-one basis.
represents the U.S. microenterprise agenda in the
growing international community. Membership in AEO
Training-led programs are based on providing
is open to practitioners, individuals, public agencies,
substantive training and/or technical assistance to
funders and others who share in AEO's mission.
clients before offering or referring clients to credit.
AEO's challenge, issued to all microenterprise supporters
Peer lending programs provide credit to
across the country, is to help one million low-income
microentrepreneurs through borrower or peer groups,
individuals in the U.S. to achieve self-sufficiency through self-
in which individuals come together to make group
employment by 2008. We invite participation from all sectors
underwriting decisions, create some safeguards
and welcome their support.
against default, and provide mutual support and
technical assistance.
Clinton Presidential Records
Digital Records Marker
This is not a presidential record. This is used as an administrative
marker by the William J. Clinton Presidential Library Staff.
This marker identifies the place of a publication.
Publications have not been scanned in their entirety for the purpose
of digitization. To see the full publication please search online or
visit the Clinton Presidential Library's Research Room.
FORUM ON MICROENTERPRISE
IDB
SPECIAL REPORT
Publication of the Inter-American Development Bank
The Multilateral Investment Fund. that
supports microfinance institutionswith equi-
Declaration of support
ty investments and provides other services.
The IDB is also carrying out technical
The microenterprise forum took place
against the backdrop of an historic San
MICROENTERPRISE
assistance projects to support microen-
terprises. among them several regional pro-
José meeting of the heads of state of
grams. One will set performance standards
countries of Central America and the
for microfinance institutions to improve their
Caribbean. At the meeting's close, all
financial administration and strategic plan-
signed the Declaration of San José,
ning. Another is focusing on improving the
which affirmed their support for the
operations of rural-based institutions. Fi-
small business sector.
nally. an IDB-financed program to train
microfinance specialists will result in the
"We agree that micro, small and
creation of a consortium of training institu-
medium-sized businesses are im-
tions.
portant for the social develop-
ment of our countries. These en-
For further information. contact the
trepreneurial undertakings make
Microenterprise Unit. B-0600, Inter-Ameri-
it possible for a wide range of so-
can Development Bank, 1300 New York
cial sectors to expand produc-
Ave.. N.W., Washington. D.C., 20577. Fax:
tively and make a decisive con-
(202) 623-2307. E-mail: sds/[email protected]:
tribution to the democratization
or http://www.iadb.org/sds.
of capital and the equitable dis-
tribution of wealth.
"We will broaden our efforts
to promote such businesses and
Hands across
to increase their capabilities. We
also request that the Inter-
American Development Bank,
the World Bank and other insti-
the world
tutions and donors continue to
strengthen their support of these
activities."
HE UNITED STATES AGENCY FOR INTERNA-
T
tional development is investing $120
José María Figueres Olsen
Success from hard work and ingenuity.
million annually worldwide to support
President of Costa Rica
the following performance-based pro-
United States first lady Hillary Rodham Clinton was among the guests who heard microentrepreneurs tell what it takes to grow a small business.
grams:
William J. Clinton
Steadfast ally
Grants to established microfinance orga-
President of the United States of
nizations.
America
CONFERENCEO BIG BUSINESS NORMALLY
Grants to build institutional
THE INTER-AMERICAN DEVELOPMENT BANK
capacity of microfinance in-
Carlos Roberto Reina Idiáquez
A
presentations by corporate executiv
The people
lady Josette Altmann de Figueres. and their
USAID
devotes a large part of its agenda to
counterparts from Nicaragua, Honduras.
Guatemala and Belize. "We have all won-
T
has been a pioneer in microenterprise
stitutions and exchange visits.
President of Honduras
But when microenterprise is the sub-
dered how we can promote development
development since launched its Small
Matching grants for U.S.
ject, the head table is usually dominated by
Projects Program in 1978. Since then.
Leonel Fernández Reyna
speak up
without sacrificing traditional values." said
private voluntary organiza-
people who have never actually created a
Clinton heraddress. Microenterprise
the IDB has undertaken new initiatives, such
tions.
President of the Dominican Republic
business, who have never had to nurse it
offers a partial answer. for it is sustained by
as financing countryvide microenterprise
A program to manage loan and guarantee
along in good times and bad times. who
those very values that have stood us so well
programs and strengthening the network of
facilities supporting efforts of commercial
Armando Calderón Sol
depend on it for their livelihood.
recommendations that constitute a road map
for SO long: hard work. ingenuity. sacrifice a
financial institutions that specialize in serv-
banks to provide microenterprise credit.
President of El Salvador
This was why the meeting held in Mav
for success in microenterprise
desire for it better life.
ing the sector.
Grants from USAID overseas missions to
1997 in San José, Costa Rica, was special.
The small businesspeople featured here
IDB President Enrique V. Iglesias under-
Just since 1990 alone, the
support microenterprise programs.
Alvaro Arzú Irigoyen
Called the Regional Consultative Forum on
(see pages 2-3) were three among many who
scored the success of microenterprise in al-
IDB has lent more than $520.7
In addition. USAID supports training and
President of Guatemala
Microenterprise: Lessons and Opportuni-
gave first-hand accounts of their journeys to
leviating poverty and improving the status of
million to benefit an estimated
extensive research into microenterprise best
ties. its 450 attendees included top political
success a business environment filled with
women. But he declared that more must be
700,000 microent repreneurs
practices. including business development
Arnoldo Alemán Lacayo
figures. internationally recognized experts.
obstacles. In addition. each of the micro-
done, particularly in providing technical as-
inevery oneof its Latin Ameri-
services. village banking. savings mobiliza-
President of Nicaragua
and even the first ladies from the Central
entrepreneurs received help: some critical
sistance, training in business management.
can and Caribbean member
tion, management information services and
American countries and the United States.
juncture specifically. access to credit and
and improving the legal environment for
countries.
commercial banks. Activities to assess the
Manuel Esquivel
But the real stars were 100 small-seale manu-
technical assistance.
microenterprises. Mark Schneider. USAID as-
During the next five years, the Bank will
impact of microenterprise services include
Prime Minister of Belize
facturers. merchants, service providers and
"Although we can walk on our own. we
sistant administrator for Latin America and
invest $500 million in microenterprise in
detailed study as well as the development
farmers. Their messages, practical and often
still occasionally need a helping hand." said
the Caribbean. described hopefulsigns,
three main ways:
and testing of assessment tools that can be
personal, left impressions participants would
small-scale businesswoman Berta Esmeralda
especially in the area of financing. "We have
The Small Projects Program. which con-
used in the field.
MICROENTERPRISE, 1998 Photos by
never forget.
Alareón. of El Salvador.
seen microfinance institutions become the
tinues to provide credit and training services
David Mangurian. Produced by the Periodi-
The meeting sponsors. the Inter-Ameri-
The testimonials. intensely human sto-
trusted links between microenterprise and
through local NGOS and other groups.
For more information. contact the Of-
cals Unit, Inter-American Development
can Development Bankand the United States
ries of resourcefulness. creativity and sheer
the formal banking system," he said. citing
The Global Microenterprise Loan Pro-
fice of Microenterprise Development, USAID,
Bank, 1300 New York Ave., N.W., Washing-
Agency for International Development, were
grit, were presented before an attentive and
institutions in Bolivia and Guatemala that
gram, that channels IDB funds through na-
RRB Room 2.11-024. Washington. D.C.
ton. D.C. 20577. Tel. (202) 623-1000.
determined the event would leave more than
influential audience. Among those present
depended on subsidies at the beginning but
tional microfinance institutions, primarily
20523-0058. Fax (202) 216-3593. Internet
Internet: http://www.iadb.org.
memories. So in a day-long series of work-
were United States first lady Hillary Rodham
that are now self-sufficient competitors in
commercial banks.
http://www.mip.org.
shops, participants hammered out a group of
Clinton, accompanied by Costa Rican first
the commercial banking sector.
IDB SPECIAL REPORT 1998
FORUM ON MICROENTERPRISE
Prescription
bought a stock of shoes.
Todav Alarcón manages five shoe stands
under the name "Calzados Bertha." Her
credit record is so good that she recently
for success
borrowed $5,000 for further expansion.
"I have 25 vears of experience in this
business and I've managed to support three
children and niv mother with my earnings.
Workshops produce blueprint for action
she said. I have even been able to send my
eldest daughter to study computer science at
GRAPHIC
invest in needed infrastructure.
the University of North Carolina."
T
moments came when microentre-
At the same time. nicrofinance organiza-
Alarcón urged participants at the forum
preneurs described their survival tech-
tions need a sustainable source of financing
to have faith in microentrepreneurs. and to
niques for coping with very difficult
for technical assistance and training. They
continue lobbying for better and faster
conditions. It struck many participants that
noted that microfinance and community
sources of credit for men and women like
their prescriptions for success also apply to
development organizations cannot expect to
herself. "We are proving that we are respon-
the NGOS and international organizations that
fully recover from clients the cost of their
sible, that we repay our loans and that we're
serv them. according to Marguerite Berger.
services, at least in the initial stages. There-
determined to get ahead." she said.
chief of the IDB'S Microenterprise Unit.
fore. they must rely on public subsidies and
For example, successful inicroentre-
private charitable donations.
preneurs learn early on that they must put
Finally, workshop participants agreed that
the customer first. One must work long and
community-based organizations must have
Sewing for success
hard to win a customer, they said. but it only
clear property rights. be committed to effi-
takes one false step to lose one. The same
eienev in providing services. and have as
Alba Argentina Xica de Cotón began work-
goes for nicrofinance programs. said Berger.
their goal institutional sustainability. They
ing at age 10 III Quetzaltenango, Guatemala,
Whereas once they were the only institu-
said that the state should do what it can to
helping her parents "so that my brothers
tional lender available to low-income clients.
facilitate microfinane organizations. but not
could get ahead. Thanks to those efforts,
they now face competition from banks, fi-
to engage in financing activities directly.
she now has two brothers who are profes-
nance companies and credit unions.
sionals. she said proudly
Similarly. microentrepreneurs must live
But Xica de Cotón's work ethic has ben-
by their wits, using both creativity and flex-
Improving financing
Organic farmer Guerrero applies an insecticide he makes by boiling and fermenting seven insect repellent plants. His vegetables command premium prices.
efitted more than her brothers. Today she
ibility to weather constant economic and
owns and operates a sewing supply business
personal In recent years, microfinance
products and services
with the help of her Imsband and daughter.
organizations have also started to remvent
But to go that additional step and grow
Budding organic farmer
With her income. she sends her own chil-
themselves. constantly looking for new ways
Workshop participants emphasized the im-
the business. microent repreneurs need out-
dren to school. Several years ago, Xica de
to meet their clients' financial needs. says
portance of giving repreneurs place
side help. In many cases. donor agencies and
Cotón received a small loan from FUNDAP, a
Berger. Now. international development
to deposit their savings. With safe. secure.
governments must step in to help a
Henry Guerrero. a 26-year-old farmer from
local microcredit institution supported by
agencies must learn these same lessons.
liquid savings. microentrepreneurs can ac-
repreneur to diversify product lines,
Zarcero. Costa Rica. was brought up in a
USAID. and affordable credit has remained an
The results the conference's sthree work
cumulate wealth for financing investments
build with other businesses.
family of vegetable growers. As a child he
essential part of her life. "Without those
shops reflected the experiences of hands-on
and meeting social and educational needs.
obtain subcontracts from larger firms, pen-
remembers hearing his father speak about
loans we would not have known what to do.
experts. Among their conclusions were the
In addition to short-term loans. micro-
etrate new markets. exchange information
hisconcern over health dangers posed by the
she said. "Todav we are beginning to gener-
following:
entrepreneurs also need a broader range of
on market conditions and adopt technology.
excessive use of chemical pesticides. Later
ate some of our own capital, but it is not
financial services, including life insurance.
In other cases. microentrepreneurs orga-
on he joined a pilot project in organic farm-
enough. We need credit to grow the business
housing loans and credit cards. Participants
nized in groups or associations can lobby for
ing techniques organized in 1988 by
and improve customer service."
Microenterprise and
urged that formal. regulated institutions be
changes in government regulations or seek
COOPEBRISAS. a local cooperative.
created to offer both loans and these other
community development
government investment in local infrastrue-
"Only a few of us decided to make a
financial services. Obvious candidates would
ture. Participants agreed that donors and
serious of it. because it was very riskv. he
be nongovernmental organizations presently
governments should do more to provide
recalled. During the first few years, he and
Community owned and operated micro-
engaged in microcredit activities that could
nonfinancial services to the microenterprise
the others learned the hard way. suffering
Alarcón sent her daughter to college.
finance institutions help to empower local
birn themselves into regulated financial
sector. Although clients need loans when
serious losses of crops and money. Many
communities and in the process strengthen
entities.
they start their businesses. consolidation and
gave up but Guerrero persisted. When he
the movement toward political decentraliza-
expansion depends on access to market in-
heard about an IDB-funded project that of-
tion and democratic institution building.
formation. training in management and vo-
Sidewalk shoestores
fered the technical expertise, credit and train-
concluded participants in this workshop.
Growing
a
cational skills. and longer-term financing.
ing. he decided that he had found the helping
Locally controlled microfinance and de-
Although some microenterprise organi-
hand he needed to eventually succeed
velopment organizations promote commu-
microenterprise
Berta Esmeralda Alareón, a 37-vear-old
zations often offer both credit and technical
Today. about 100 local farmers are pro-
mother of three. started selling nail files on
nity self-reliance and autonomy by raising
assistance services. workshop participants
dueing wholesome vegetables that have no
the streets of San Salvador when she was 12.
local capital to meet local credit needs. In
Participants stressed that starting and main-
felt that this was neither necessary nor. in
chemical residues. "We're selling our pro-
Her parents could not afford to send her to
addition, these organizations help to bring
taining a microenterprise is a considerably
many cases, advisable. For one thing. a cre-
duce in the nation's principal supermarkets.
school. but she taught herself to read and
together local microenterprises as an inter-
different proposition from expanding the
dit provider that gives advice becomes partly
and income has improved tremendously."
write.
est group. giving them the ability to improve
business. Microentrepreneurs get their start
responsible for the debt in the eves of the
said Guerrero. "Even though I never got past
Poor but ambitions. Alarcón later set up
marketing and make use of training and
mainly on the strength of personality and
borrower. In addition. nonfinancial services
primary school. todav am an ntrepreneur.
a stall to sell clothing and other goods. Then.
extension agencies. Finally. microfinance or-
initiative-determination expertise. knowl
is a very competitive market. one in which
horticultural technician and consultant to
in 1988. she received a $200 loan from
ganizations help to give the sector the politi-
edge of their clients. willingness to make
lenders should stay out of in order to keep
the University of Costa Rica. the National
Financiera Calpia. a finance company in San
cal clout needed to persuade government to
sacrifices, responsibility in using credit.
their costs down.
Learning Institute and the IDB."
Salvador supported by the IDB'S Multilateral
Xica de Cotón used credit to expand.
IDB SPECIAL REPORT 1998
TDB SPECIAL REPORT 1998
Steven A. Cohen
04/23/98 11:58:06 AM
Record Type:
Record
To:
Michael A. O'Mary/OPD/EOP, Laura E. Schiller/WHO/EOP, Christine N. Macy/WHO/EOP
CC:
Subject:
is there a line in tomorrow's AEO address re: an Accion Study, and if so, can someone forward to
me for their use in a press release.
by words, SBA, and pledged their support for helping AEO to achieve their goals; HHS is
pledging its support as well for child care package; I nkow you've heard form many fedeal
agencies who pledged their support; treausrey, SBA, hud, HHS; Commerce; dept of agriculture; -
- a lot of support; getting into this broader comprehesnie approach; that everyone has a role to
play; treasury hoff; commend cdfi funds for their cooreindating efforts; it's working, an increase
efforts to those agencies who are not yet fully aware of microenerprise yet;
challenge us and leading us; her vision; for the next century; legislative agenda; underscret level
making presentations; Rubin, Alverez;
senators Pete de Menici; Sen. Carey from Mass; harkin from Iowa; honored Dale Bumpters form
Arksnas retiring; champion and founding father of micro loan program within SBA; senator
wellstone;
AOE: is the national association of orgs committed to microenterprise devel; provide forum,
information, and voice to promote opportunities for people and communities limited access to
resources; and reps us in growing international community. Kate McKEE -- policy volunteers;
slef help in norch carolina; appointed chief of microenetrprise develpment program at usaid;
she's leading in us enterprise; new bridge between us and other programs will be broadened
considerably. We're as excited about htis important -- KATE is member of policy committee
AEO; she's a key leaders in policy dewvel arena; and well known to federal agencies, treasury,
ag and sba. Everyone very excited;
economically -- but that such a commitment makes a very real difference in people's lives.
But perhaps as important, these studies confirm what many of us have known from
talking to entrepreneurs across the country, and around the world. That people involved in
micro-enterprises define success beyond financial gain. They also talk about a sense of pride,
and control over their future. They talk about more flexibility in their family life. And they talk
about the pleasure they feel as more active participants in the revitalization of their communities.
So what is our mission here today, and over the next few years, to ensure that more
micre-entrepreneurs across America can fulfill those same dreams, and expand the opportunities
for themselves, their families, and their communities? What can we do, as individuals, as
community organizations, as government agencies, as churches, as financial institutions, as social
service providers, to open up more doors of opportunity and self sufficiency for our most
disadvantaged citizens? Thanks to so many of you here today, we've already broken the
stereotypes about the poor, about economic opportunity, and about what's possible with
public/private partnerships. We know what tools and resources must be leveraged to make a
difference in people's lives. Now we must take the next steps. And go beyond preaching to the
choir, and convince the uncoverted.
I'm pleased that this Administration is committed to taking those next steps, and
expanding its support for microenterprise iniativives across the country. The Small Business
Administration, which is the lead federal agency for micre-enterprise, has been steadily
increasing its support for micro-loans -- and technical assistance -- since the late 1980s, when it
first established domestic microenterprise sites around the country. SBA now plans to increase
access to its microloan program -- by expanding to the the full 200 microlenders and 25 technical
assistance providers allowed by current legislation.
SBA is also increasing awareness of its loan program by spreading the word about
success stories, and educating potential funders about SBA's contributions in this area. There
will also be a greater emaphasis on electronic tools, such as assisting in the development of web
sites for mocriborrowers to create global markets for local products. SBA is also working to
ensure greater financial security for the microloan program, by seeking, among other things, to
eliminate population based state funding caps.
I wanted to mention that SBA's administrator, Aida Alvarez -- who I believe you heard
from yesterday -- joined me in a small town in Chile just a few weeks ago, where we met with
women entrepreneurs, and heard their stories of economic success and empowerment. We are
very fortunate to have such a strong champion of microenterprise on our side, pushing for greater
commitments of public funds for the microenterprise movement. And I understand that you
heard from Secretary Rubin the other night about new initiatives -- the second series of
presidential awards for microenterprise deelopment. (President has requested $125 million for
the Treasury CDFI fund. -- which runs both programs by hrc.) 200 individuals hosted at wh for
these awards.
Senator Kennedy is introducing her. Refer to His letter.
HILLARY RODHAM CLINTON
REMARKS AT THE ASSOCIATION FOR ENTERPRISE OPPORTUNITY
CONFERENCE
WASHINGTON, D.C.
APRIL 24, 1998
Thank you, Senator Kennedy, for that kind introduction. But more, for your courageous
leadership in opening up opportunities for America's citizens in every field. I also applaud your
proposed legislation that will call for a dollar-for-dollar match between federal and private funds,
aimed at supporting educational and training programs for micro entrepreneurs. We are all
indebted to you for you support.
It is a great pleasure to be here today, and to join the many partners, in both the public and
private sector, who have come together to participate in this important conference. I am thrilled
to see such an extraordinary turn out, because your presence here today underscores the growing
commitment across America to give people the tools of opportunity to create a better life for
themselves, their families, and their communities. I applaud congratulate you on your
Conference theme: Microenterprise Works When we all Work Together, because if we are to
meet the ambitious goals of this conference, and continue to build the micreenterprise
movement across this country and around the world then everyone has a role to play.
Everyone must contribute.
I want to thank the Association for Enterprise Opportunity for sponsoring this national
event, and its two chairs, Mary Mathews and Christine Benuzzi, for inviting me join you here
today. We are all indebted to the work of the the Host committee from the Virginia
Microenterprise Network, particularly Becky Clay Christensen, and the members of AEO's
Conference Planning Committee, especially Welthy soni, its chair, and Kay Cole, Becky
Christensen, Kate Mckee and Lawrence Yanovitch and so many others who have worked so hard
to make this conference a success. AEO is dairy invaludle
We' re (cantin here, first and foremost, to celebrate the progress of micro enterprise initatives
work in promoting the
opperlints
across the state a subject near and dear to my heart. I first heart about micro-credit and micro-
nationals,
enterprise when my husband, then the governor of Arkansas, and I were involved in looking for
ways to create economic opporutnity in the poorest sections of one of the poorest states in this
nation. We heard about the work of the Grameen Bank in Bangladesh, and the efforts of the
South Shore Bank in Chicago. And ever since that initial exposure to these pioneering efforts to
and
lift people out of poverty, and ever since I've seen what small amounts of credit or other
we
I
investments can do to turn their lives around, I've sought to spread the word about about
applew
their
microenterprise and its ever widening circle of benefits.
allert
here
tabood
confumed
ay
leade ship .
When I look out at this audience this morning, I am struck not only by how our numbers
are growing, but how our faces are changing. Over the past five years we've seen organizations
created soley to serve economically disadvantaged entrepreneurs are being joined by those
involved in housing, and social services, and public health. Today, more and more church
groups, manufacturing organizations, and chambers of commerce are also becoming partners in
went
and te
and
support
the
US
t cred world in
muco celre
this movement to open up economic opportunities for Americans.
But thanks to the efforts of leaders like the Association for Enterprise Opportunity, we're
also changing how we're helping people to create and develop and sustain their own businesses.
Training and technical assistance remains a critical component for success. I've just returned
from a trip to Chile with the President, and met with a number of women entrepreneurs who had
received training from a non governmental organization. They talked about how important it was
to receive that training -- which combined self esteem issues and business development. And I
could see, from their beautiful crafts, and their growing businesses in down products and dried
flowers, how these efforts had changed their lives. Everyone here today has heard stories similar
to this one over and over again, as entrepreneurs gain the knowledge, and the confidence, to plan
for their businesses, including better managing the money they already have.
Community efforts are also growing to ensure fledgling entrepreneurs access to credit and
loans. Micro-credit loans are critical to their efforts to grow and build their businesses. They are
also a great business investment. As many of you know so well, the default rate for many of
these loans is extremely low -- about 2.2 percent -- and the repayment rate is extremely high. I
often say to my banker friends that if they had customers like these entrepreneurs -- who pay off
their loans at 95, 96, 97 percent -- they would be very lucky indeed.
We are also seeing progress when individual entrepreneurs are joining forces -- and
sharing resources -- with each other. They're publishing joint catalogues, and joining up on trade
missions. And as a result, small entrepreneurs are expanding their markets beyond their
neighborhood borders, and getting into industries like day and elder care, housewares, recycling.
I've heard about one story where a woman who produced salsa in a rural community
couldn't afford to step up out of her own kitchen. So the community donated an old building,
with commercial equipment, and leased it to her. And now, that woman is not only making a lot
of salsa, she's attracted other entrepreneurs who are making jars and other related products. I
believe we must all work to encourage these joint efforts, which produce an ever widening cirle
of opportunity.
New strategies are emerging -- again thaks to AEO and others -- that will further the
progress we're already seeing. We need to encourage greater economic literacy within the
micre-entrepreurial community. To run a small business, people must understand the
importance of having checking accounts, and saving acounts, and have a greater knowledge
about IRS rules and regulations. These too are the tools of any bussiness, and our most
disadvantaged entrerpreneurs, in particular, must have access to them to succeed.
Today, there is growing evidence that these efforts to expand the number of partners, and
implement more comprehensive strategies to support small business entrepreneurs, are having a
very real and positive impact. A 3-year study just released by Accion International, for example,
shows that after three loans, an entrepreneur's take home income increased an average of $455 --
with low income entrepreneurs doing even better. Business profits also shoot up dramatically
after three loans. So we'e learning that it takes a longer term commitment to lift people up
CHRONOLOGY OF THE FIRST LADY'S INVOLVEMENT IN
PROMOTING MICROENTERPRISE DEVELOPMENT
1986
Mrs. Clinton and then-Governor Clinton met with Mohammed Yunus, the
founder of the Grameen Bank in Bangladesh, in Arkansas to discuss the
relevance of the model of the Grameen Bank to rural Arkansas
communities.
1988
Mrs. Clinton was involved in the creation of, and served on the Board of,
the Southern Development Bank Corporation and its non-profit affiliate,
the Good Faith Fund -- one of the first rural microenterprise fund in the
United States. Modeled after the Grameen Bank in Bangladesh, the Good
Faith Fund provides small loans, training and technical assistance to low-
and moderate-income entrepreneurs in rural communities in Arkansas.
Several U.S. Foundations, through program-related investments, have
partnered with the Good Faith Fund.
March, 1995
Mrs. Clinton visited the Self Employed Women's Association (SEWA) in
India and the Grameen Bank in Bangladesh to highlight these important
microcredit programs enabling poor women to become self-sufficient.
May 14, 1995
Mrs. Clinton's op-ed in the Washington Post, "Investing in Sisterhood,"
underscores how microcredit helps women overcome poverty.
July 26, 1995
Mrs. Clinton visited Mi Casa, a program in Denver, Colorado promoting
microenterprise development, that has received support from the Small
Business Administration. She also spoke to the Women's Foundation of
Colorado Conference on microenterprise as a tool of opportunity.
August 28, 1995
President Clinton directed the Secretary of the Treasury to develop an
awards program to honor excellence in microenterprise development, and
to coordinate all microenterprise programs within the U.S. government.
This was announced as part of the U.S. commitments to the United
Nations Fourth World Conference on Women.
September 5, 1995
Mrs. Clinton spoke in Beijing, China, at the United Nations Development
Fund for Women (UNIFEM) panel discussion on "Women's Economic
Empowerment." Other panelists included Ela Bhatt of India's SEWA, and
Mohammed Yunus of the Grameen Bank.
October 12, 1995
Mrs. Clinton visited a FINCA bank, "Mothers United," in Nicaragua
(which was subsequently re-named "Mothers United with Hillary"), and
an Accion microenterprise project, "PenaSol," in Santiago, Chile. Both
projects serve very poor women and have been successful in providing
economic opportunity.
June 26, 1995
Mrs. Clinton was the keynote speaker at the RESULTS Dinner in
Washington, DC honoring Dr. Yunus.
November 8, 1995
Mrs. Clinton spoke at the "Beyond Beijing" World Bank Conference,
where she highlighted microcredit and economic opportunity. The World
Bank has committed itself to microenterprise lending, which is of great
importance to women's economic development.
March 19, 1996
Mrs. Clinton spoke about the importance of microenterprise in
development to the Council on Foreign Relations in New York.
May 2, 1996
Mrs. Clinton and Secretary Rubin announced the details of the Presidential
Awards for Excellence in Microenterprise Development via video to the
Association for Enterprise Opportunity Conference in Rhode Island.
September 16, 1996
Mrs. Clinton spoke at the USAID "Lessons Without Borders" Conference
in Baltimore, Maryland, where she described how lessons learned through
international assistance can be applied to solve problems at home.
December 3, 1996
Mrs. Clinton visited BancoSol in La Paz, Bolivia -- Bolivia's largest
commercial bank and the world's only commercial bank dedicated solely
to micro lending. (The BancoSol borrowing group that Mrs. Clinton met
with re-named itself the "Hillary" group in honor of her.)
January 30, 1997
The President, joined by First Lady and Secretary Rubin, to present the
Inaugural Presidential Awards for Excellence in Microenterprise
Development at the White House.
February 3, 1997
Mrs. Clinton to keynote at the International Micro Credit Summit in
Washington, D.C.
February 3, 1997
Mrs. Clinton to visit a Foundation for International Community Assistance
(FINCA) borrowing group in Washington, DC.
AEO Exchange
UPDATE
UPDATE
UPDATE
UPDATE
UPDATE
ASSOCIATION FOR ENTERPRISE OPPORTUNITY
APRIL 1998
70E. LAKE STREET
# 1120
CHICAGO. IL 60601
312-357-0177
FAX: 312-357-0180
[email protected]
First Lady Hillary Rodham Clinton to Serve
As Honorary AEO Conference Chair
irst Lady Hillary
when Mrs. Clinton and then-
Development Bank Corporation
1997. the First Lady and
F
Rodham Clinton has
Governor Clinton met with
and its nonprofit affiliate, the
President Clinton presented
agreed to serve as
Mohammed Yunus, founder of
Good Faith Fund, one of the first
the Inaugural Presidential
honorary chair of the AEO
the Grameen Bank in
rural microenterprise funds in
Awards for Excellence in
Conference to be held in
Bangladesh, to discuss the
the United States. More
Microenterprise Development.
Washington D.C.
relevance of the Grameen Bank
recently, Mrs. Clinton has
where all award winners were
model to rural Arkansas. In
Mrs. Clinton has a long
continued to speak publicly on
members of AEO. We are
1988. Mrs. Clinton was involved
history of supporting and
microenterprise development.
delighted at the First Lady's
in the creation of, and served
promoting microenterprise
particularly as it affects low-
acceptance of AEO's invitation
on the Board of, the Southern
development. beginning in 1986
income women. In January.
to serve as honorary chair.
Conference Registration to
Conference is Opportunity for
Legislative Visits: Schedule Yours
be Tight: Register Now
If you have not registered
sessions and asked to return to
If you have not yet scheduled an appointment with
for the AEO Annual Conference
the registration desk.
your Congressman or Senator, please do so now.
and Membership meeting and
Call to say you will be in town for the AEO
Please call or fax your
Conference and would like to meet with him or her
plan to attend please register
registration and session sign-up
immediately. Only those
briefly to discuss mciroenterprise development. You
along with your procedure for
attendees who have registered
should also invite him or her to the legislative
payment in order to ensure
and have registration badges
reception. If you do not know the number of your
proper registration. Registra-
will be allowed into AEO
Congressman or Senator, the Capitol Switchboard is
tions received without payment
1-202-225-3121
sessions. A government-issued
will not be accepted.
photo ID will be required at
If you have questions,
AEO to Sponsor Conference
registration. Anyone who does
please contact AEO by fax at
Legislative Reception
not have a proper registration
312-357-0180.
badge will be turned away from
AEO is sponsoring a legislative reception for
members of Congress and staff on Thursday, April
CDFI Core Component/Technical Assistance NOFAs
23 from 3:30 to 5:00, in Room B-340 of The Rayburn
The U.S. Department of the Treasury is making available at
Building.
least $40 million to fund the Community Development Financial
AEO sent invitations to all members of Congress.
Institutions (CDFI) Program core components. involving direct
Please contact your Congressional representatives
financial and technical assistance to CDFIs and has issued a
to ask them to attend this meeting. In addition, all
separate NOFA for a TA-only component to address the unmet
members have been invited to attend key
capacity needs of CDFIs.
Conference events as guests of AEO. If you
have
Deadline: June 12, 1998
any questions, or need another invitation to be sent,
Applications: CDFI Awards Manager
contact:
TEL: 202-622-8662
FAX: 202-622-7754
Zulma Mustafa at AEO 312-357-0177 X26
AEO Exchange
New Tentative Agenda for
Sold-Out Sessions
Friday, April 24
All of Wednesday's pre-conference sessions, starting at 8:00 AM
7:30 to 8:45
Committee Meetings and Continental
are sold out and oversubscribed. If you signed up and your
Breakfast
registration was received after the cut-off date you will be con-
tacted.
9:00 -11:15
Partnerships Plenary
The response to the Microenterprise Training Institute was so
11:30 12:45
Lunch
strong that AEO is planning a series of regional institutes to be
1:00 -2:45
Concurrent Training Sessions (originally
offered at statewide meetings. Watch for more information.
scheduled for Friday morning)
3:15 5:00
Concurrent Training Sessions
MICROENTERPRISE
TOURS
6:00
Motorcoaches leave for FUN night at the
Torpedo Factory
Meet working entrepre-
neurs from the Washington
Sessions Cancelled
D.C. and Northern Virginia
Thursday
area. The Ethiopian Commu-
MO11
Accessing Markets: the Internet and Specialty Food Entrepreneurs
nity Development Corporation
(ECDC) and FINCA. will be
PA3
Microenterprise Development and Minority Organizations
conducting bussed tours on
PA8
Creating Partnerships with Job Developers
both Thursday and Friday. On
Friday
Thursday. the ECDC Tour will
Roundtables have been cancelled. Other opportunities to meet on-site will be offered.
depart at 12:30 PM and FINCA
MO4
So Your Non-Profit Organization Wants to Run a Business
will run two cycles of tours
beginning at 12:30 PM and 1:30
MO2-3 How to Build a Diversified Funding Base
PM. On Friday, both tours will
PD5
Innovative Program Design: Creative Ways to Expand, Improve, and Deliver
depart at 2:30 PM. Tours will
Microenterprise Programming
leave from the area adjacent to
Saturday
the Virginia Microenterprise
PA12
Building Effective Corporate Partnerships
Network Concierge Desk.
ET11
Beyond the Basics: Where True Empowerment Begins
Please meet at least 15 minutes
LE2
prior to departure and check in
Using Partnerships to Support Peer Lending
with the program staff person.
PA10
Partnerships between Microenterprise Development and Housing Programs
Preregistration is required, and
LE10
Identifying Business Finance Markets
each tour is $15. Space is
RE6
Practical Outcome Measurements in Microenterprise
limited. Please stop by the
Registration Desk for details.
Conference Updates: Open Immediately
Association for
Enterprise Opportunity
70 East Lake St.
Suite 1120
Chicago, IL 60601
© Association for Enterprise Opportunity. 1998
Executive Director: Christine M. Benuzzi
Editor: Mary Lou Egan
04/23/98 THU 05:11 FAX
002
May 7, 1997
Dear Friends:
Thank you for inviting me to attend the
Association for Enterprise Opportunity's Seventh
Annual Conference and Membership Meeting in
Omaha, Nebraska.
I am grateful for organizations like the
Association for Enterprise Opportunity that work
to foster partnerships between public and private
enterprise. In communities throughout our
nation, there are individuals who have the
initiative and the desire to take responsibility
and work hard. If they are to succeed, they must
be given tools of opportunity - - one of these is
access to credit. Microcredit is an invaluable
tool in alleviating poverty, promoting self-
sufficiency and stimulating economic activity in
communities throughout our nation and the world.
As I travel across the country and around
the world meeting with people, I listen to them
share their stories about the opportunities
microcredit has brought to their lives. The
ripple effect from microcredit projects can lift
individuals out of poverty, move mothers from
welfare to work, create jobs, promote businesses
and build capital in depressed areas. It is my
hope that your dedication to and success with
microcredit projects in your local communities
will resonate throughout the nation and encourage
others to invest in the economic and human
potential in their own neighborhoods.
Please accept my best wishes for a
productive and enjoyable conference.
Sincerely yours,
Clinton
Hillary Rodham Clinton
FIRST LADY HILLARY RODHAM CLINTON
VIDEOTAPED REMARKS FOR ASSOCIATION FOR ENTERPRISE OPPORTUNITY
SIXTH ANNUAL CONFERENCE
APRIL 23, 1996
Good morning. Although we can't join you in person, Secretary
Rubin and I wanted to take this opportunity to congratulate the
Association for Enterprise Opportunity and all your members on the
important work you are doing to expand economic opportunity to all
Americans. This is a vital undertaking, and your gathering comes
at a crucial time.
The basis for any long-term solution to poverty rests in a
community's ability to help those living in poverty raise their own
incomes. Low-income Americans are capable and hard-working. What
they lack is not initiative, but opportunity and access to credit.
As one woman working to establish her small business in Colorado
said to me, "Too many great ideas die in the parking lots of
banks."
Members of AEO know the importance of microenterprise. You
have provided people across our country with opportunity -- the
opportunity to borrow small amounts of money and prove that all
kinds of people are credit-worthy. You have given people the
opportunity to gain technical knowledge, to start small businesses
to bring some great ideas to life, and most important, to improve
their own lives and the lives of their families.
In my travels throughout our country and around the world, I
have seen first-hand the transforming effects small loans can have,
especially for women and their families in both the developing and
developed world. At the Grameen Bank in Bangladesh, I encountered
women who told me how they were achieving economic security. I met
a woman who used a small loan to buy a milk COW. After she paid
off the loan with proceeds from the milk, she took out a loan for
another COW. After repaying that loan, she decided it was time for
her husband to help increase the family income. She took out a
third loan to buy him a rickshaw.
And I met a woman in Chile whose whole outlook on life was
changed by the fact that someone took a risk and lent her money to
buy a sewing machine. She said she felt like "a bird freed from
its cage" when she received her first loan.
Whether it is for a milk COW in Bangladesh or for a computer
in Chicago, women and men need help, encouragement -- and credit --
to make that first investment. Here in the United States, we are
working to build up a micro-enterprise network. It is still very
young, but already several hundred programs, most of them
represented here today, have enabled tens of thousands of Americans
to gain access to credit and training as well as something more
fundamental: self-respect and self-sufficiency. Some of the people
served by these programs are on welfare, but they are creating a
better future for themselves and their children. And they just
needed a little help -- a jump start -- to realize their own
potential. But too often that jump-start is hard to come by.
I became a believer in microcredit years ago, when my husband
was governor of Arkansas. We combined elements of the Grameen Bank
and Chicago's South Shore Bank to create a development bank and a
borrowing fund that began to make the kind of investments in that
state that we wanted to see throughout the country.
Last year at the United Nations Fourth World Conference on
Women, where I was privileged to represent our country, the United
States made two commitments to further self-employment and
micro-enterprise in the United States. First, the President
established a new Presidential Awards program to honor outstanding
and innovative programs that provide access to credit, training or
technical assistance to microentrepeneurs and potential
microentrepeneurs. Today, we are happy to announce the formal
structure and specifics of these awards.
The President also directed the Treasury Department to
coordinate microenterprise programs across a number of our federal
agencies to ensure that those programs are doing the job they were
designed to do. Additionally, the United States will continue to
support microenterprise in developing countries through USAID.
In today's global economy, microenterprise development needs
to become a key element in providing economic opportunity for women
and men everywhere in the world.
I now have the pleasure of introducing Treasury Secretary
Robert Rubin, who will discuss the Administration's initiatives and
particularly the development of the Presidential Awards for
Microenterprise Excellence program.
###
THE WHITE HOUSE
Office of the Press Secretary
For Immediate Release
February 3, 1997
REMARKS BY THE FIRST LADY
AT THE MICROCREDIT SUMMIT
Sheraton Washington Hotel
Washington, D.C.
MRS. CLINTON: Thank you very much. Thank you, choir, that was wonderful. I got
to listen to you as I stood outside. I am thrilled to see such a turnout for this summit, which is
one of the most important gatherings that we could have anywhere in our world, to talk about
what is possible for raising the sights and aspirations of people, giving them the tools of
opportunity, expanding access to credit and creating conditions in which men, women and
children will be able to make for themselves better lives.
I'm very grateful to all who have made this summit possible, particularly to the co-chairs,
to the heads of state who are gathered, to other distinguished guests, to the Results Educational
Fund, to many of the private corporations and other foundations that have helped to sponsor this
important gathering.
This is truly an historic occasion. Microfinance is a subject that is near and dear to all of
our hearts who are gathered here. And this first global summit on microcredit offers an
unprecedented opportunity for us to draw attention to the successes of microcredit in developing
countries, as well as in applications in advanced economies around the world.
By bringing together experts from every continent we will be able to learn from each
other's challenges and achievements, and apply those lessons within our own borders. I hope that
this conference will engender new understanding of microcredit and its potential to transform the
lives of individuals, their families, their communities and their nations.
Although it is called "microcredit," this is a macro idea. This is a big idea, an idea with
vast potential. Whether we are talking about a rural area in South Asia or an inner-city in the
United States, microcredit is an invaluable tool in alleviating poverty, promoting self-sufficiency
and stimulating economic activity in some of the world's most destitute and disadvantaged
communities.
I first heard about microcredit more than a decade ago when my husband, then the
governor of Arkansas, and I were involved in looking for ways to create economic opportunity in
the poorest sections of one of the poorer states in the United States. We had heard about the
work of the Grameen Bank in Bangladesh and about the work that the South Shore Bank in
Chicago. And we reached out to representatives of both to explain to us how this idea of very
small amounts of credit could make such a difference.
I remember well when we met with Muhammed Yunus in the Governor's Mansion in
Little Rock in 1986. We sat there and listened as he told us how the idea which he had had as an
economics Ph.D. and then a teacher back in his home in Bangladesh began to be put into
practice. He offered advice as the project in Arkansas got off the ground. Within a few years
we, too, could see how the fruits of theGood Faith Fund, as the project in Arkansas was called,
were beginning to take root.
It was so contrary to conventional thinking about finance and economic development.
And, yet, before our eyes and based on reports from Bangladesh and India and Chicago and
elsewhere, we knew something important was happening that had escaped the notice of many
who worked in development, of many who were in finance departments of governments. And
both my husband and I were determined that the concept of microcredit would have universal
relevance. We looked for ways to apply microcredit in America, taking the best of the principles
and values that it represented, but making it sure that it could be put into practice in different
settings.
Now, more than 10 years later, we can look around this room, from one end to the
other, and appreciate the power of Muhammed Yunis' vision. And we can celebrate the courage
and dedication it has taken on the part of all of you today -- pioneers in microfinance, lenders in
microcredit enterprises, representatives of government and private business and foundations and
grass-roots community organizations from all over the world -- the courage that it took to come
and understand how the conventional wisdom about poor people and economic opportunity was
no longer adequate. (Applause.)
To really understand the significance of this summit one must recognize that you are
here because you have broken a paradigm, you have gotten out of the conventional box of
thinking about the poor, about economic opportunity, about the partnership between the public
and private sector. It is this type of unconventional thinking that we need more of in our world
today, to address the problems that all of us confront. (Applause.)
I know those of us here understand that microcredit is a tool -- not the only tool, but we
believe an important tool available to promote economic and social development. We have seen
with our own eyes in the last several decades how the global economic revolution has
transformed lives, many for the better. People with opportunities in places that never thought or
dreamed they could see clean water, roads, their children attending school, access to health care.
And yet, we also know that global economic change has not only made winners, it has
over the next five years. (Applause.)
As I said last week at the White House when we were celebrating microcredit, there are
millions of people in our country as there are millions of people in all the nearly 100 countries
represented here who are brimming with initiative and desire to take responsibility and to work
hard. But they need what I call the tools of opportunity, and one of those tools is access to
credit For too long, many people -- not only the poorest of the poor, but working people and
others have had to turn to the lenders in the community that extract great price and cost for the
credit
money that they give. Others have been shut out completely from any kind of access to credit.
And the result has not only been to depress their opportunities, but to depress that of those in
their families and in their communities.
menned
Later today, I will visit a microcredit project right here in Washington, D.C. one of the
FINCA USA projects. I spent time with a FINCA borrowing group in Managua, Nicaragua, and
I'm looking forward to hearing from the borrowers in this group here in Washington -- how that
model is working for them.
What we are finding is that modest loans are transforming lives, reclaiming villages and
rural areas and cities from decay and decline, and helping to reduce the number of people living
in substandard conditions or extreme poverty.
I have seen that with my own eyes. Many of you are veterans of microcredit who are
here, but others of you have come for the first time to learn how this concept can be translated
and transplanted where you live. And others of you in the press are finding this a new idea,
something you had not really focused on before. And still others in government and private
business are looking for ways to help the economic development of people in the communities
that you serve. And I want to take just a few minutes to visualize why I am such an admirer and
supporter of microcredit; why I believe that it has such great potential.
So I brought with me some of the pictures that I have had taken as I have traveled to
various continents and countries looking at microcredit efforts, and if I could I'd like to show
them to you as I talk a little bit more about why they make such an important difference.
I want to start with a picture from India, and those of you who are familiar with SEWA
and I believe that Ela Bhatt is here and will be speaking -- know how important the
Self-Employed Women's Association has been. This group has made it possible for very poor
Indu
women to learn about finance, to borrow money, to be part of a bank, to save money. And when
I visited I met with hundreds of women, some of whom had walked for 12 or 15 hours to come
to meet with me, to tell me what those initial small loans meant. And I want to emphasize that it
was not just stories about what the loans bought and what they were able to do with the loans, it
was the entire of sense of self-worth and potential that those loans created in the women that
made the biggest impression on me.
Women stood up and said that they had been vegetable vendors in the markets and had
been abused by police officers, others of authority, with no place to turn to try to keep their
businesses going when times were difficult. They told me of working on their family farms,
eking out a living in very hard soil with little equipment and little support. And yet, woman after
woman stood up and said to me that since they had become members of the Self-Employed
Women's Association, they were no longer afraid. They were not afraid to speak up for
themselves, to find their place in their family and their village, to help contribute to the income
that made it possible for them to think of sending a child to school or having a child get the
health care that child needed.
Many of you will find and be able to relate the same kinds of experiences that I have had.
And I hope that as we talk about microcredit and as we look at the physical manifestations of
loan, ledgers, and I have reviewed of businesses that have been started, of milk cows that have
been bought, we will also not forget that you are seeding those people with a dream and a hope
that they will be functioning members of society whose children's lives will be better.
I've also seen firsthand what happens in Bangladesh, and for anyone interested in
microcredit you know that it is a journey to the Grameen Bank that is often part of the learning
experience because of the longtime efforts that have been undertaken there. When I visited with
a group of women in a village outside of Jasore, I realized that I was visiting a Hindu village, and
my schedule did not permit me to go down the road further to visit a Muslim village. And I
wanted to see women from both communities who were participating with Grameen. The women
in the Muslim village came to the Hindu village, the first time there had ever been such
participation together. Never had there been a meeting like that.
And I listened as 150 Hindu women and 150 Muslim women told me how their lives had
been transformed by virtue of earning income. These women had lived much harder lives than
any I could even imagine, and yet they were filled with hope about their future. And one of the
reasons is that Grameen doesn't just extend credit, as many of you know. It tries to put the
women and the men who are borrowers not only in borrowing groups for credit purposes, but to
help support one another in solidarity, to build stronger families and communities.
Each person who joins the bank has to abide by 16 decisions or principles that range
from the mundane such as "we shall build and use pit latrines," to the much more difficult to
explain and understand -- "we shall not inflict injustice on anyone; neither will we allow anyone
to do so," or "we shall always keep our children and the environment clean." There is even one
principle against dowry, which is extraordinary considering the attitudes in many of those
communities about the proper role of women and certainly the importance of dowry.
As each woman waits her turn to get a loan, she knows she cannot borrow money until
the woman before her has repaid her loan. So there is a built-in incentive to support each other's
enterprises.
I saw women making steel and concrete beams they can sell to other women who use
them to build houses with loans from Grameen and I visited such a house. So a whole
self-sustaining market is created within one village.
Grameen also in Bangladesh attempts to work with children to change attitudes about
what is possible for them. Here there was a skit performed in which some of the young children,
young boys and girls, were talking about attitudes that were held about education, and in
particular, whether or not girls should be educated as well as boys. And by performing that skit,
they were serving notice that they understood there was another way, another idea of what could
be possible for them.
And so when you go to Bangladesh, and you see, as many of you have, what Grameen
means, just like what the
Self-Employed Women's Association means in the lives of these women, their husbands, their
families, it makes it clear that we're talking about not only economic transformation, but social
transformation as well. (Applause.)
USA
Some months later, I visited a microenterprise project in Denver, Colorado, here in the
United States. In this case women, many of them Hispanic Americans, received career
counseling and vocational training, and entrepreneurial technical assistance. It is provided by a
group called Mi Casa. And here, the women were explaining to me what it meant for them to
finally be taken seriously. Many had been on welfare or were just off welfare, and they were
looking for an opportunity to take the skills that they had acquired and turn them into income.
Many of those women were good bakers, good seamstresses. They could make
alterations. They could provide food for small restaurants. But they didn't, as we hear so often,
have access to credit to get started. One woman said to me something I have never forgotten,
when she described to me what it was like trying to go to her local bank. She did not have any
traditional collateral, but she was a hard worker. She's always worked for other people. She had
a good product to sell. But she was turned away because the amount of money that it would
have taken for the bank to process her loan was not, in the bank's eyes, worth the investment.
And she said, too many great ideas die in the parking lots of banks. (Applause.) And one of the
hopes I have is that conventional banking will understand that there is an economic opportunity,
a market niche for those willing to service this community.
I certainly was impressed by that when I was in Managua, Nicaragua, meeting with
women in a borrowing group shortly after the United Nations Fourth World Conference on
Women in Beijing, where the platform of action included a commitment microcredit. And as I
have said, and as the President's said, much of the work that we are doing in the United States to
advance microcredit is in part a fulfillment of our responsibilities under that platform of action.
(Applause.)
I went here to the weekly meeting of the FINCA Group and there were about 30 women
who described how they had received small loans to start neighborhood bakeries, seamstress
shops -- one was making mosquito netting; one was selling auto parts door to door. I was
surprised and very excited when several of the women not only gave me their products, but also
asked me what I had been doing in India because some of them had seen on television some
pictures of my trip to the Self-Employed Women's Association. They wanted to know what the
women there were spending their money on and what businesses they were starting. And I felt
that there was an opportunity for this to be literally a global movement, with people learning from
each other and supporting each other. And this is exactly what this summit means to do.
I've also been impressed by the work I've seen in Santiago, Chile, where community bank
relies on peer networks to promote and sustain local miicrobusinesses. Here in a local market I
met the vendors who were showing their commitment to the bank by putting up awnings in
matching blue and yellow to demonstrate that they were part of microenterprise.
Most memorable to me was a woman who told me that as a seamstress she could not
compete with the larger factories, and yet she knew there was a market for her work because she
had many people who had come and asked her to make something for them but she did not have
the capacity to do so. With a small loan, she was able to buy a high-speed sewing machine and
replace her old, antiquated one. She said that when she got that new sewing machine she felt like
a caged bird set free. And that is a good a way to describe how many of the people I have met
seem to feel when given the opportunity.
I saw that again firsthand recently in La Paz, when I met with borrowers at Banco Sol
and had a chance to visit the bank itself -- a physical place that is dedicated to microcredit. And
the people there were very proud of what they had accomplished. And the United States is
pleased that this bank, now the largest bank in Bolivia, was initially supported through a loan
from USAID. It is the first commercial in the world completely dedicated to microlending.
The default rate is extremely low, about 2.2 percent; and the repayment rate, obviously,
extremely high. I often say to my banker friends that if they had customers like these people,
who paid off their loans at 95, 97, 98 percent, they would be very happy. And I think if more
banks understood -- (applause) the tenacity, the commitment, the entrepreneurial spirit of
people like these who are given a chance to help themselves, we would go a long way in not only
extending credit, but in eliminating many of the unfortunate stereotypes about people who are
put
poor. (Applause.)
Anyone who has worked with microcredit or seen its impact around the world as I have
will testify that those stereotypes are just plain wrong. Most people who are eligible for
microcredit around the world work as hard as they know how, from sunup to sundown, and
sometimes for many hours before and beyond. And yet, too often, those of us in positions of
influence or authority or power dismiss them. We seem to have a belief that if they are poor,
they are meant to be poor and will always remain poor. Yet many of us come from families,
generations back who themselves were poor, and through hard work and sometimes lucky breaks
and opportunities an extended helping hand, we were able to climb our own way out of poverty
and to have the benefits that that gave us and our children.
These microcredit projects are proof of what we can unleash if we invest in the
economic and human potential of all the world's citizens. I am heartened that so many
commercial banks and finance ministries and others around the world are beginning to show such
an interest in microcredit. We know that this is not the only answer; we still need investments in
education and health, infrastructure in many parts of the world, but we know that this is a critical
component of what will work in nearly any setting we can define.
It is becoming increasingly obvious that this tool not only transforms lives but lifts
communities and societies as well. And that, after all, is what this summit is about. It is not just
beneful
about giving individuals economic opportunity, it is about community, it is about responsibility.
It is about seeing how we are all interconnected and interdependent in today's world. It is
recognizing that in our country the fate of a welfare recipient in Denver or Washington is
inextricably bound up with all of ours. It is understanding how lifting people out of poverty in
India or Bangladesh redounds to the benefit of the entire community and creates fertile ground
for democracy to live and grow because people have hope in the future.
So I think all of you who have helped to make the pictures that I've shown a reality, who
have been advocates on behalf of microcredit and the concepts of community and responsibility
that it represents, and I hope that as a result of this summit, many, many more people will
understand how microcredit can transform lives, will learn lessons on how to do it right --
(inaudible) -- all of us will recognize that as we move toward this 2 st century, we have an
opportunity that has seldom come, if ever, in the history of humankind. We have a world that
can, with technology, democracy, free enterprise, extend the benefits of prosperity and peace to
countless millions whose lives can be lifted up.
So, for all of us, I hope that we will go forward from this summit more convinced than
ever that providing economic opportunity, giving people a chance to be responsible, building
community can happen everywhere if we have the will to make it so. Thank you for what you're
doing. Godspeed on the work ahead. (Applause.)
END
SBA
Jermy Demyups
:
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CEO
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Jamie Danisus
u
APR-23-1998 11:10
P.01/06
COMMUNITY DEVELOPMENT FINANCIAL
INSTITUTIONS (CDFI) FUND
U.S.DEPARTMENT OF THE TREASURY
FACSIMILE TRANSMITTAL SHEET
TO:
KATY BUTTON
COMPANY:
OFFICE OF THE FIRST LADY
FAX NUMBER:
456-6244
FROM:
Bill Luecht, Public Affairs Officer, CDFI Fund
DATE:
TOTAL NO. OF PAGES INCLUDING COVER:
April 23, 1998
6
RE:
Per your voice mail message
X URGENT
FOR REVIEW
PLEASE COMMENT
PLEASE REPLY
PLEASE RECYCLE
NOTES/COMMENTS:
Katy-
Sorry I missed you when I called.
Per my voice mail to you, attached is the section of the press release from the Presidential Awards ceremony last
year which outlines the various federal programs supporting microenterprise development. It may be a little out
of date, but hopefully it will help.
I'll be heading back to the conference this afternoon. If you have any questions and need to reach me, my pager
number is 1-888-617-1851.
Bill
damus 5 den the and Teal
APR-23-1998 11:10
P.02/06
FEDERAL PROGRAMS SUPPORTING MICROENTERPRISE DEVELOPMENT
There are several federal programs that support microenterprise development efforts in the
United States in addition to the Presidential Awards for Excellence in Microenterprise
Development. The following are the primary programs that support these efforts, and a list of the
Presidential Award winners who have received funding through these programs. Some of the
Presidential Award winners have received funds from other federal sources that are less
specifically-targeted to microenterprise development; these programs are not listed below.
U.S. Department of the Treasury
Microenterprise Initiatives
Community Development Financial Institutions Fund
The CDFI Fund is charged through a presidential memorandum with implementing two
microenterprise programs. The first is the Presidential Awards for Excellence in
Microenterprise Development. The second is an interagency effort to coordinate
microenterprise programs administered by the Federal agencies and departments. The
Fund will be convening the first formal meeting of the interagency effort in the next few
months.
The contact person for the Presidential Awards for Excellence in Microenterprise
Development is Jeannine Jacokes, CDFI Fund, (202) 622-8662.
The contact persons for the CDFI Fund's interagency effort are Jeannine Jacokes and
Joyce Klein, (202) 622-8662.
Community Development Financial Institutions (CDFI) Program
Community Development Financial Institutions Fund
The CDFI Program makes grants, loans, and other investments in community
development financial institutions (CDFIs). CDFIs include community development
banks, credit unions, loan funds, venture capital funds, and microenterprise loan funds.
In July of 1996, the CDFI Fund awarded $37.2 million to 32 community development
financial institutions. Among these awardees were two microenterprise organizations,
and several other community development financial institutions that include microlending
as part of their community financing efforts.
Two of the Presidential Award winners -- Cascadia Revolving Fund, and ACCION Texas
of the ACCION U.S. Network -- have received assistance through the CDFI Program.
The contact person for the CDFI program is Bill Luecht, (202) 622-8662.
January 30, 1997
APR-23-1998 11:11
P.03/06
Bank Enterprise Awards Program (BEA)
Community Development Financial Institutions Fund
The BEA program provides incentives for traditional banks and thrifts to invest in CDFIs
-- including microenterprise loan funds -- and to increase their lending and provision of
financial services in distressed communities. In October of 1996, the CDFI Fund
awarded $13.1 million to 38 banks and thrifts that participated in the BEA program.
The contact person for the BEA program is Jeannine Jacokes, (202) 566-6640.
U.S. Small Business Administration
Microloan Demonstration Program
Office of Financing
The SBA Microloan Demonstration provides loans and technical assistance grants to
intermediaries that make loans of less than $25,000 to entrepreneurs. It also provides
grants to microenterprise organizations that provide technical assistance to low-income
individuals to assist them in securing private sector business financing. To date, the
Microloan Demonstration has loaned more than $68.9 million to microenterprise
intermediaries, with no loss to the federal government. There are currently 103 lending
intermediaries and 23 technical assistance providers participating in the program. The
demonstration period ends this fall, and Congress will be considering the status of this
program.
Two of the Presidential Award winners -- the Women's Self-Employment Project and the
North Carolina Rural Economic Development Center -- participate in the Microloan
Demonstration Program.
The contact person for the Microloan Demonstration Program is Jody Raskind, Office of
Financing, (202) 205-6497.
Women's Business Demonstration Program
Office of Women f Business Ownership
The Women's Business Demonstration Program provides three-year grants to
organizations that provide assistance to women-owned businesses. Most of the
businesses assisted are microenterprises. Fifty-four programs in twenty-eight states and
the District of Columbia have received grants to date. The Demonstration received a $4
million appropriation in FY1997.
The contact person for the Women's Business Demonstration Program is Robin
Diamond, (202) 205-3850.
January 30, 1997
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U.S. Department of Health and Human Services
Job Opportunities for Low-Income Individuals Program (JOLI)
Office of Community Services
The JOLI program provides three-year grants to nonprofit organizations engaging in
demonstration projects aimed at creating jobs for low-income individuals, particularly
welfare recipients. The program has funded a number of microenterprise programs, and
has been a key source of support for microenterprise organizations placing a special focus
on welfare recipients and very low-income individuals. The JOLI program received a
FY1997 appropriation of $5.5 million. This enables the program to make ten three-year
grants of up to $500,000.
One of the Presidential Award winners, the Women's Self-Employment Project, has
received three grants from the JOLI program.
The contact person for the JOLI program is Nolan Lewis, Office of Community Services,
(202) 401-5282.
Micro-Enterprise Development Project
Office of Refugee Resettlement
Provides grants to states and public or private non-profit organizations providing
microenterprise services to refugees. Targeted refugees are those receiving public
assistance, at risk for receiving public assistance, and lacking the ability to secure small
loans. The Office of Refugee Resettlement provided over $2.3 million in grants in
FY1996.
One of the Presidential Award winners, the Women's Self-Employment Project, has
received a grant from the Office of Refugee Resettlement. A second award winner, the
Cascadia Revolving Fund, served as a partner and subcontractor to another grantee under
the Micro-Enterprise Development Project.
The contact person for the program is Carmel Clay-Thompson, Office of Refugee
Resettlement, (202) 401-4557.
U.S. Department of Labor
Self-Employment Assistance Program (SEA)
Unemployment Insurance Service, Employment and Training Administration
The North American Free Trade Agreement legislation gave states the authority to allow
recipients of unemployment insurance to pursue self-employment. States that pass
enabling legislation can pay "self-employment allowances" in lieu of regular
unemployment benefits to dislocated workers who choose to start a business. Only
January 30, 1997
APR-23-1998 11:12
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individuals who are likely to exhaust their unemployment benefits may participate, and
states are required to provide self-employment training and assistance to unemployment
insurance recipients pursuing this option. Ten states have enacted authorizing legislation,
six states have implemented the program, and programs are operational in five states.
Federal authorization for this program expires at the end of 1998.
The contact person for the Self-Employment Assistance Program is Tom Edwards,
(202) 219-6871.
U.S. Department of Agriculture
Rural Business Enterprise Grants
Rural Business - Cooperative Services, Specialty Lenders Division
Rural Business Enterprise Grants help public bodies, non-profit corporations, and
federally recognized Indian Tribal groups to finance the development of small and
emerging private business enterprises located in rural areas. Grant funds can be used to
support the costs of a wide range of business-development activities, including
developing and acquiring land; constructing buildings and streets; refinancing; obtaining
business technical assistance and associated training; and financing business start-up and
working capital.
Two of the Presidential Award Winners -- Working Capital and the Nebraska
Microenterprise Partnership Fund -- have received funding from the RBEG program.
The contact for the program is Carol Boyko, Rural Business - Cooperative Service,
Specialty Lenders Division, (202) 720-0661.
U.S. Department of Housing and Urban Development
Community Development Block Grant
Community Planning and Development
In the 1992 reauthorization of the CDBG program, microenterprise development was
included as an eligible activity. Although only a small proportion of total CDBG funding
is used to support microenterprise activities, this is an increasingly important source of
funds for local microenterprise programs. For example, many state governments that
support microenterprise do so by providing funds out of their Small Cities Block Grant
allocations.
Three of the Presidential Award winners -- Cascadia Revolving Fund, the Nebraska
Microenterprise Partnership Fund, and the Women's Self-Employment Project -- have
received funds through the CDBG program.
The contact for the CDBG program is Ken Williams, Deputy Assistant Secretary, Grants
Programs, (202) 401-6367.
January 30, 1997
11:12
P.06/06
Empowerment Zones/Enterprise Communities
Community Planning and Development
The Enterprise Zone and Empowerment Communities program provides incentives to
enable communities to enhance economic opportunities within distressed urban
neighborhoods and rural areas. Four types of federal incentives are provided: (1) tax
incentives; (2) flexible block grants; (3) waivers and flexibility with existing federal
resources; and (4) priority consideration for discretionary federal programs. The
application for the program required communities to come together to create a strategic
plan for utilizing the federal tools. More than 100 Empowerment Zones and Enterprise
Communities were designated in 1994 through a competitive application process.
One of the Presidential Award winners -- the ACCION Texas affiliate of the ACCION
U.S. Network -- has received funding through the EZ/EC program.
The contact for the EZ/EC program is Julian Potter, Director, EZ/EC Initiatives,
(202) 708-6339.
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APR 23 '98 06AM
P.1/4
U.S. Small Business Administration
Fax Transmission Cover Sheet
SBA
The U.S. Small Business Administration offers
opportunities for all Americans to start, build and
To: Christie Macy
grow their own businesses into the 21st century.
Did you know that in fiscal year 1997
Organization: White House
the SBA -
maintained a guaranteed-loan portfolio of more
than $29 billion in loans to 200,000 small busi-
Phone:
Fax:
nesses that otherwise would not have had such
access to capital?
Date:
Time:
backed over 49,400 loans totaling a record
$10.9 billion to America's small businesses?
Number From: of Rages (including this page): Lehnn Oliver
made a record 2,700 investments worth $2.37 bil-
lion through its venture capital program?
provided a record 50,000 loans totaling $1.1 bil-
Office: SBA
lion to disaster victims for residential, personal-
property and business losses?
extended management and technical assistance
Phone:
Fax:
to nearly 900,000 small businesses through its
12,400 Service Corps of Retired Executive
volunteers and approximately 1,000 small busi-
ness development center locations?
Message:
assumed a leadership role in the President's
Welfare-to-Work Initiative by encouraging
entrepreneurship and linking small businesses
with potential employees?
Did you know that America's
23 million small businesses -
employ more than 50 percent of the private
workforce,
generate more than half of the nation's gross
domestic product, and
are the principal source of new jobs?
Note: Be aware fax machines using thermal paper produce an unstable image
which will deteriorate. Copy messages onto plain paper prior to filing as
Call us at 1-800-U-ASK-SBA
a record!
or visit our website at www.sba.gov
CONFIDENTIALITY NOTE: The information contained in this facsimile transmittal sheet and the document(s) that follow are for the exclusive use of the
addressee and may contain information protected by the Privacy ACI. 5 U.S.C. 552a. or otherwise confidential. privileged. or non-disclosable information
If the recipient of this facsimile is not the addressee or is not the person responsible for delivering this facsimile to the addressee. the recipient may violate the
law by reading. photocopying, distributing or otherwise using this facsimile transmission or its contents in any way. If the recipient has received this facsimile
transmission in error, call the sending office immediately.
SBA Form 959 (04/98) Previous editions are obsolete.
[
I
-
APR 23 '98 11:07AM
P.2/4
Microenterprise Briefing Paper
Administrator Alvarez, Chile, April 1998
Domestic Industry
Domestic microenterprise development sites were established in late 1980's at several
independent sites around the country, notably in Pine Bluff, Arkansas, at the Good
Faith Fund and Iowa City, Iowa, at the Institute for Social and Economic
Development.
In 1991, SBA entered the field when legislation was enacted establishing the
Microloan Demonstration Program.
SBA Microloan Program goal is to provide access to credit to those individuals and
businesses which cannot access traditional financing institutions and, to provide
integrated business based technical assistance to microborrowers.
Under the program, SBA makes loans and grants to non-profit intermediaries that
make microloans and provide technical assistance to very small businesses.
In June, 1992, SBA funded its first 37 organizations.
Since 1992, SBA has provided approximately $67 million in microloans to over 6,700
microbusinesses.
Approximately 45% of SBA funded microloans have been made to women, 40% to
minorities.
The SBA Microloan Program filled a gap in rural lending with over 35% of the
microloans reported being made in Rural areas.
Business based Technical Assistance (TA) is available to all microborrowers
under the SBA program.
Other domestic funders include the Department of Agriculture, the CDFI fund,
private foundations, banking consortiums, state and local government and individual
private sector supporters
Domestic Concerns
Expansion without sufficient funding for Technical Assistance; The industry is
interested in seeing microloans made available nationwide. However it is concerned
that without appropriate technical assistance funding, lenders will be at risk with
weakened portfolios and inadequately supported small business owners.
Microlending as the panacea for welfare to work; While the industry has long
been active in moving people toward self sufficiency, we must be realistic in our
understanding that only a small percentage of welfare recipients are oriented toward
entrepreneurship.
HILLARY RODHAM CLINTON
TALKING POINTS
MICROENTERPRISE EVENT
TEMUCO, CHILE
APRIL 18, 1998
Thank you, Victoria Gonzalez, for that introduction, and thank you and Mayor Castillo
for the tour. It's been such a pleasure to come to this mercado today, and to have had
the opportunity to visit with some of the women entrepreneurs here who are lifting up
their lives, and the lives of their families, through their wonderful businesses. You are all
here because you were filled with good ideas, and the desire to take responsibility and to
work hard. What you needed were the tools to take those ideas and turn them into
businsses. And thanks to the training you got, and the small loans you recieved, you
transformed your ideas into these wonderful flowers and crafts and other products that I
have just had the pleasure of seeing.
I've witnessed many examples today here in Temuco of what is being accomplished all
across Chile when people work together, at the community level, to open up
opportunities for themselves and their communities. I've visited a Mapuche cultural
center, where people from the community and the non governmental organizations are
working as partners to boost the educational opportunities for their children. And I've
visited a health clinic, where the government and the local doctors are sharing resources
and medical knowledge to meet the health needs of the indigenous population. And here,
I see a successful micro credit project -- supported by public funds and charitable
organizations -- that are helping you and SO many more out of poverty, and giving you
the opportunity to be self sufficient.
I've had the privilege of travelling to many communities like this around the world, and
talking to women like yourselves about how they have changed their lives through these
small microenterprise projects. But the story I remember most was from a woman I met
in Santiago a few years ago. She told me she worked as a seamstress, but knewshe could
be far more productive if she only had a new sewing machine. She said when she got her
new sewing machine, she kissed it. She said she felt like a caged bird set free. That was
a wonderful image to describe what so many people feel when given an opportunity to
contribute to their family, their community, their nation.
As we meet here in Temuco today, the democratically elected leaders of our hemisphere
are meeting in Santiago at the Summit of the Americas. They are discussing how all of
their nations can contribute to economic growth and stability of the hemisphere, improve
the quality of life for their citizens, and strengthen democracy
Among the Summit documents they will be signing is a commitment to strengthen the
development of micro and small and medium size enterprises -- particularly for women.
It calls for three important things that I believe will help all of you. 1) Getting you the
training and know how to expand and buildd your businesses. 2) Seeking a lot more
money from the World Bank, the IDB, and other bilateral donors to offer more loans to
micro enterpreneurs thoughout the Americas. (I know that the IDB plans to boost its
lending by $4-500 million, and I can promise you USAID will increase its grants to
support microfinance by $120 million over the next 3 years. And 3) A commitment that
governments look at their laws and regulations so that microfinance institutions like the
Residencias Universitarias Femininas can grow and become banks, and that commercial
banks can open micro finance windows that let you in.
I wish those leaders could be here today, and to see what can be accomplished when
people with innovative ideas and deternination to do better are given the tools to improve
their lives. If these leaders were here in Temuco with us, they would see with their own
eyes how right their Summit is to call for expanded micro-credit and greater economic
opportunities for women. Because programs like this work. And we need more of them.
Yet while the government has taken a leading role in these critical areas -- like education,
and health, and micro-credit -- that is only the beginning. It's the partnerships we build,
here at the community level, that truly transform lives, and fulfill dreams.
What we see here is what can be accomplished when everyone -- the U.S. Inter-
American foundation, the Spanish government's AID program; the non-governmental
organizations like RUF and Inerned, and citizens like yourselves, all come together to
open up opportunities for people to rebuild their lives.
These partnerships are the building blocks of a better life for the citizens of this
community. But they are also the building blocks for an even stronger democracy
throughout Chile, and throughout this hemisphere.
I look forward to hearing from all of you this afternoon. I want to hear you talk about
your experiences and the challenges you continue to face in making your small
businesses succeed and grow. And I know that in your stories, I will hear the voices of
progress, and the hope for a better future. And perhaps I will see the wings of that bird
that has escaped from its cage to freedom.
U.S. Small Business Administration
SBA
Tax Transmission Cover S eet
Championing America's Entrepreneurs
To: Christie Macy
Did you know the SBA
Organization: Office of the First Lady
Has a portfolio guaranteeing over $29 billion in
loans to 200,000 small businesses that otherwise
would not have had such access to capital?
Telephone:
Fax: 202//456-5709
Guaranteed over 52,700 loans totaling $10 billion
Date: April 23, 1998
Time: 12:01 PM
to America's small businesses in fiscal year
1996?
Number of Pages (including this page): 3
Last year extended management and technical
assistance to nearly 850,000 small businesses
From: Jenny Dominguez
through its 950 Small Business Development
Centers and 13,000 Service Corps of Retired
Executives volunteers?
Office: the Administrator
Provided more than 38,000 loans totaling
$987 million to disaster victims for residential,
Telephone: 202/205-6684 Fax: 202/205-6230
personal property, as well as business losses in
fiscal year 1996?
Has 7,000 private sector lenders as partners
Message:
providing their capital to small business?
As per our earlier conversation, enclosed please
Has increased its venture capital program with
find information from the Mapuche woman, one of
more private capital in the past two years than in
the ladies Mrs. Clinton visited during her visit to a
the previous 15 years combined?
57234
microenterprise in Chile. I traslated her e-mail
Provides loan guarantees and technical assistance
and have enclosed both English and Spanish
to small business exporters through U.S. Export
versions. Hope this is useful.
Assistance Centers in 15 cities?
Can be contacted through the SBA Home Page
on the Internet (http://www.sba.gov)?
Can respond to written small business questions
through the U.S. Business Advisor on the
melen
Internet (http://www.business.gov)?
Sanjoy
Did you know that America's
22 million small businesses
Employ more than 50 percent of the private
workforce,
Generate more than half of the nation's gross
Gupta
Note: Be aware fax machines using thermal paper produce an unstable image
domestic product, and
which will deteriorate. Copy messages onto plain paper prior to filing as a
record!
Are the principal source of new jobs?
CONFIDENTIALITY NOTE: The Information contained in this facsimile transmittal sheet and the document(s) that follow are for the exclusive use of the
addressee and may contain information protected by the Privacy Act, 5 U.S.C. 552a, or otherwise confidential, privileged, of non-disclosable Information. If the
recipient of this facsimile is not the addressee or is not the person responsible for delivering this facsimile to the addressee, the recipient may violate the law by
reading. photocopying, distributing or otherwise using this facsimile transmission or its contents in any way. If the recipient has received this facsimile
transmission in error, call the sending office immediately.
SBA Form 959 (3/97) Previous editions obsolete
Federal Regyling Program
Printed on Recycled Paper
10'd
INVESTMENT DEPT.
APR-23-1998 12:26
Dominguez, Jenny
From:
CEDM Liwen[SMTP:[email protected]
Sent:
Wednesday, April 22, 1998 1:18 PM
To:
Dominguez, Jenny
Subject:
para Chris Sale
English text translated:
Hello! My name is Soledad Milacura; I am a Mapuche and we met during Mrs. Hillary Clinton
visit to Temuco, Ninth Region of Chile a few days ago. On that occasion, I promised to send
you information on our microenterprise.
Our organization is called Traditional Mapuche Food and Beverage Wvf Ko (which means
water that springs from mapudungun), established in August 1996, through a project for the
National Corporation for the Development of Indigenous Peoples (CONADI, from its Spanish
acronym) We are 4 young Mapuche women from different zones and regions. Our main
objective in developing this type of enterprise is to market, promote and rescue our traditional
Mapuche cuisine through a food and beverage service in authentic tradition. Our proposal
arises from a true feeling to maintain alive and project the essential cultural identity of our
people, as well as to share our values and culinary expertise with those not of Maphuche
origin in view of contemporary intercultural relations, especially for city dwellers. We also
endeavor to generate added income for our families without impactiong our culture, and to
generate employment and compete with the outside world.
We know that we lack experience regarding business management and administration, and
this is why I am very interested in getting in touch with other women working on similar
projects. If possible, could you please send me information in this regard on what your
administration does.
I greet you once more....
Soledad Millacura Antilaf
Wvf Ko
CEDM Liwen
Centro de Estudios y Documentación Mapuche
e-mail : [email protected]
Voz - Fax : 56 45 ) 235
Carrera 165, Temuco, Chile
Spanish text as recieved:
Me complace saludarle, mi nombre es Soledad Millacura, soy Mapuche y nos conocimos en la
reunion que sostuvo la Sra. Hilary Clinton en la ciudad de Temuco, Novena Región de Chile,
hace unos dias atras. En esa ocasion me comprometi a enviarle informacion sobre nuestra
microempresa.
Nuestra entidad se denomina Servicio de Cocteleria y Comida Tradicional Mapuche Wvf
Ko (lease wüf ko, significa agua que brota en mapudungun), nace en agosto del año 1996, a
traves de un proyecto presentado a la Corporacion Nacional de Desarrollo Indigena, CONADI,
somos 4 jovenes mujeres mapuche provenientes de diferentes zonas y realidades. El objetivo
primordial que nos mueve a involucrarnos en una empresa de esta naturaleza es conocer,
Page 1
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rescatar y difundir los alimentos tradicionales Mapuche bajo la forma de un servicio de
cocteleria, pretendiendo recrear un elemento cultural propio, de particular importancia y
trascendencia. Nuestra propuesta obedece a un sentimiento sincero por mantener vivo y
proyectar un esencial valor cultural de nuestro pueblo, busca tambien compartir nuestros
valores y conocimiento culinarios hacia el publico no mapuche en el espacio caracteristicos
de las relaciones interculturales contemporaneas como lo es la ciudad.
Otro de nuestros objetivos es poder generar ingresos, sin que necesariamente se vea
afectados nuestros intereses culturales, generar mano de obra y competir con el medio
externo.
Sabemos que nos falta experiencia en lo que se refiere a administracion y manejo de
negocios, es por esto que me interesaria de sobremanera si ustedes me pudieran contactar
con otras mujeres que estuviesen trabajando con alguna experiencia similar. Si es posible
que me envien informacion sobre esto de lo que ustedes manejan.
Le saludo nuevamente...
Soledad Millacura Antilaf
Wvf Ko
CEDM Liwen
Centro de Estudios y Documentación Mapuche
e-mail : [email protected]
Voz - Fax : 56 45 ) 235 790
Carrera 165, Temuco, Chile
Page 2
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