Mircrocredit Movement Gets Big Push Summit Opens On Global Effort To Help Poor Start Businesses With Small Loans
A global campaign to help poor people start businesses with small loans opened Thursday, and President Clinton said he wanted the idea “to take root everywhere.”
Speaking at the White House before presenting awards to seven U.S. organizations that make such loans, Clinton said the microenterprise initiative, or microcredit, had enormous potential.
He said he would seek a $1 billion increase in funding over five years for financial institutions that make such loans.
Organizers of this weekend’s international Microcredit Summit, at which the campaign will take shape, said their objective was to raise $21.6 billion over the next nine years to reach 100 million of the world’s poorest families, with emphasis on aiding women.
Treasury Secretary Robert Rubin, Hillary Rodham Clinton, the queens of Spain and Belgium, three presidents, one prime minister and the heads of eight development agencies will address the gathering.
Hillary Clinton, who has visited microcredit projects from Bolivia to Bangladesh, said at the White House ceremony that the projects can lift women and children out of poverty.
She said repayment rates on microcredit loans both in the United States and abroad were “phenomenally high … in the neighborhood of 98 to 99 percent.”
Brian Atwood, administrator of the Agency for International Development, called microcredit an example of “capitalism at its best” because it reached segments of society “that the normal economy has not reached yet.”
The summit is expected attract more than 2,000 people from 100 countries who back making small loans, often no more than a few hundred dollars, as a good way to help poor people in developing countries or industrialized nations improve living standards with increased income from the businesses they develop.
Groups taking part in the campaign, such as AID and the U.N. Development Program, plan to announce at the conference, or by February 1998 at the latest, what action they will take to raise money.
World Bank Vice President Ismail Serageldin said the microcredit movement, which got started 20 years ago in Bangladesh, was now coming of age.
“It is within our grasp to start making a dent in eliminating poverty,” he said. “What this meeting does is bring together all the actors, many of whom have never spoken to each other before.”
He said one outcome of the summit would be increased contacts between microcredit organizations and the private sector, which is investing an increasing amount in developing countries.
John Hatch, president of the Washington-based Foundation for International Community Assistance, which helped pioneer the microcredit movement, said the summit’s target was reaching the tens of millions of people around the world who live on less than $1.00 a day.
He said one of the strengths of the movement was its emphasis on providing loans to poor women so they can start up food stalls, buy sewing machines or livestock or open small businesses.
xxxx THE LENDERS The summit is expected attract more than 2,000 people from 100 countries who back making small loans.