Microlenders testify in Congress
While micro-enterprise is celebrated internationally (as the granting of the Nobel Peace Prize to Muhammad Yunus and the Grameen Bank last year demonstrates), here in the United States micro-enterprise advocates fight for pennies. In FY 2007, federal support for micro-enterprise loan capital and technical assistance totaled $35 million—less than 12 cents per person. The Bush administration in FY 2008 has proposed zero.
The Association for Enterprise Opportunity, the leading U.S. trade association for micro-enterprise lenders, has defined micro-enterprise as a business with five or fewer employees requiring $35,000 or less in start-up capital. AEO estimates there are over 20 million such business in the United States, which represent 17% of all private employment and provide an economic ladder up for many low-income individuals.
In his testimony, Daniel Betancourt, President and CEO of Community First Fund in Lancaster, Pennsylvania, and Chair of AEO, testified before the House Small Business Committee about the importance of the government’s Microloan program, especially its technical assistance/training component which the Bush Administration has proposed to eliminate. Betancourt was joined by Edward “Champ” Hall, owner of Champ’s Barber Shop and Barber School, who spoke on behalf of micro-enterprise owners who have benefited from the program.
Betancourt cited the impact of the Community First Fund he leads as an example of the impact that microenterprise can have. Over a period of 15 years, Community First’s service area has expanded from Lancaster County to a thirteen-county region in south central Pennsylvania with a population of over 3.5 million. Since its founding, Community First Fund has made over $11.5 million in loans, over $10 million of which have been made during the past five years.
Betancourt estimates that in the past three years alone, Community First has helped preserve 800 jobs, develop 73 new affordable housing units, and finance 34,000 square feet of commercial space, primarily in lower income urban neighborhoods. In the next four years, Community First aims to create or sustain an additional 1,800 jobs, develop another 80 new affordable housing units and finance an additional 375,000 square feet of commercial real estate.
Posted by Steve Dubb on 06/20/2007 at 10:41 AM
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