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 House of Representatives today for the second straight year. It now heads to the Senate.

    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.

    “My bill calls for smart use of U.S. foreign aid dollars to ensure the money we spend goes directly to those people who need it most,” Smith said. “Microenterprise is a bottom-up approach that focuses on helping the poorest people on the planet build themselves up, little by little, into self-sufficiency.  Safeguards ensure the money goes to the recipients, not to corrupt regimes, and the rate of return of more than 97% underscores the success of this U.S. investment.”

    “The numbers speak for themselves. Over 2 million people 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 seeking to raise their social and economic status around the world as about 70 percent of the loan recipients are women.”

    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.  She 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.

    HR 192 is now headed to the Senate where Smith is hopeful the chamber will act quickly on it.  

    “Because this program expired at the end of 2002, it is critical that the Senate quickly take up and pass my bill so it can be sent to President Bush and become law,” Smith said.