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First Gov  

April 13, 1999

H.R. 1143 - Microenterprise for Self-Reliance Act of 1999
(Gilman (R) NY and 24 cosponsors)

The Administration supports efforts to assist microenterprises as an important economic development tool. In 1994, with strong support of Congress and nonprofit microenterprise practitioners, the Administration revitalized microenterprise development with the Microenterprise Initiative. The Initiative emphasized support for the poor and for poverty lending. The U.S. Agency for International Development (USAID) renewed that Initiative in 1997, with a strong commitment to support microfinance institutions and poverty lending. The Administration remains committed to identifying new and creative means for providing assistance targeted at the poorest of entrepreneurs.

The Administration, however, is concerned that specific provisions of H.R. 1143 would hamper USAID's ability to program microenterprise funds effectively and to respond to rapidly changing economic conditions. The Administration, therefore, cannot support H.R. 1143 in its current form, but will work with Congress to fashion a mutually acceptable bill.

Key concerns with H.R. 1143 include provisions that:

  • Require USAID to provide half of all microenterprise resources to organizations providing loans of $300 or less. USAID programs provide a number of important services to meet the needs of microentrepreneurs, including microcredit, business training, and reforming government policies. These needs differ widely depending on local conditions, and can change rapidly. This provision would limit USAID's ability to tap the most competitive organizations to meet specific needs of microentrepreneurs.

  • Establish a new earmark for microenterprise funds within scarce development resources. The Administration can ill afford another earmark that limits its flexibility to respond to world development needs with limited foreign assistance funds. The Administration strongly supports microenterprise programs, and will continue to commit appropriate resources to support and expand microenterprise.

  • Create an unnecessary new bureaucracy for a microenterprise loan facility that also raises constitutional concerns under the Appointments Clause. USAID believes that it can meet the goal of this provision within current authorities. In fact, USAID worked to provide just such support to microenterprise institutions in Central America in the wake of Hurricane Mitch.