Improving National Productivity with Microlending

Created within the Treasury Department at the direction of President Clinton, the awards program will honor undertakings that offer not only access to credit, but technical assistance and training to micro-entrepreneurs. Awards will be presented for the first time this fall.

"This nation will fall far short of its full economic potential for all Americans unless our cities and distressed rural areas are healthy," Rubin said in remarks prepared for a video to the Association for Enterprise Opportunity where the award details were announced. "By helping poor people in the United States enter the economic mainstream, we reduce the social costs of poverty, increase national productivity, and improve social conditions for all of us. ... We don't have a monopoly on good ideas in the United States. This works overseas, and if adapted to our own economy, it can work in America."

Mrs. Clinton, who has encouraged micro-enterprise lending in the United States and abroad as a development vehicle, added, "Whether it is for a milk cow in Bangladesh or 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."

Rubin said awards will recognize outstanding and innovative programs that provide access to credit, technical help and training. Four categories of awards to development organizations will highlight excellence in program innovation, access to credit, development of entrepreneurial skills, and poverty alleviation. A fifth category will reward private sector, foundation and governmental support for these micro-development organizations.

Microlending -- small loans, often just a few hundred dollars to budding entrepreneurs -- is centered in community-based banks, credit unions, community loan funds and other local institutions. Interest rates are generally comparable to commercial lending rates and loan repayment rates often exceed those in the commercial sector.

Thank you, Mrs. Clinton, and thank you for lending your thinking and support to the simple but important idea of using capital and capitalism to fight poverty and deprivation, here and around the world. You have been a champion of microenterprise development, and your involvement will help provide momentum to a program with a potential for a substantial impact on poverty both in the United States and in developing nations around the world.