Congressman Chris Smith’s legislation that would help the poor  – especially women – in developing nations obtain small business loans to improve their lives passed the International Relations Committee and was put on a fast track today.  

    Smith’s bill – HR 192 – authorizes an increase in funding for the microcredit program from $155 million per year to $175 million this year and $200 million in Fiscal Year 2004.  According to the U.S. Agency for International Development (USAID), 70 percent of loan recipients are women, and many of the recipients subsist on less than $1 a day.  The clock ran out on Congress last year before a final bill could be passed.  

    “My bill calls for smart use of U.S. foreign aid money to ensure the foreign aid we spend goes directly to those people who need it most,” Smith said. “The microcredit program has proven to be a most effective tool to help the poor who want to work to improve their lives.  It is a successful vehicle, especially for poor women who, with just a little assistance, can raise their social and economic status around the world.”  

    “Microenterprise is a bottom-up approach that helps the poorest people build themselves up, little by little, into self-sufficiency and more.  Over 2 million clients are currently benefiting from USAID programs that provide the necessary capital through small loans – usually of a few hundred dollars or less – for entrepreneurs to start and expand their own small businesses,” Smith said. “This program is also a key vehicle for women to raise their social and economic status around the world."

    Smith cited the case of Bahati Warioba – a Tanzanian woman – as an example of the microcredit program’s success. Warioba  was able to build her own business thanks to a microenterprise loan. Her and her husband were having difficulty making ends meet in a competitive fishing industry in their town.  The couple decided to start their own carpentry shop, and micro loans enabled them to buy better materials and hire two additional craftsmen.  The business is now extremely successful and Warioba has been able to purchase land to build a new home. 

    “Because the authorization for this program expired at the end of FY 2002, Congress must act with great speed to make sure this vital foreign aid program continues to function. I am proud of provisions in HR 192 that will expand our existing microenteprise program so that more people can share in the hope micro enterprise has already provided so many,” Smith said.