    [Public Papers of the Presidents of the United States: William J. Clinton (1993, Book I)]
    [May 24, 1993]
    [Pages 726-728]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Remarks on the Small Business Administration Microloan Program
    May 24, 1993

        Good morning. Welcome to the White House, and thank you for coming.
    A year and a half ago, the Small Business Administration issued the
    first microloan grants. To date, SBA has awarded 47 grants. We now more
    than double the program with 49 new grants. And we believe that 42,000
    jobs will be created as a result. This administration is committed to
    helping en-

    [[Page 727]]

    trepreneurs create profits and jobs, and the microloan program is
    integral to our strategy to make that happen.
        I want to thank Senator Pressler and Senator Bumpers for their
    attendance here today. And I want to say a special word of praise to my
    State's senior Senator, Dale Bumpers, who sponsored this legislation to
    create the microloans, something that he learned about as a result of a
    community development bank operating in our home State. I am very proud
    of it. It was modeled on the South Shore Bank in Chicago, and when I was
    Governor, we worked hard to bring the bank there. We know that this
    concept works. And I appreciate very much the work that Senator Bumpers
    has done to bring this concept throughout America.
        I also want to say that if the Congress, later this year, adopts our
    proposal for community development banks, then there will be more banks
    out there supporting the SBA in the work of making microloans. This is
    very important because an enormous percentage of the jobs in America are
    now being created by small business people and by people starting up
    their own businesses and by people who are self-employed. This is an
    innovative approach which opens the doors of opportunity to Americans
    who otherwise would find those doors closed. The program enables
    community-based lenders to expand their reach and to make very, very
    small loans to entrepreneurs who otherwise simply couldn't find a way to
    make their ideas real.
        Many potential borrowers simply don't meet the credit standards of
    traditional lenders. Why? Because of a poor credit history or no track
    record as a borrower, they may simply not have enough collateral. In
    fact, SBA analysis indicates that many microloans will be made to
    individuals who are currently on public assistance. By encouraging
    entrepreneurial instincts, the program will then give them the help they
    need to take the first steps toward economic independence, not
    dependence. And in so doing, this could be a very important part of our
    overall welfare reform strategy to move more Americans from welfare to
    work.
        By using community-based lenders--and some are with us today, and I
    want to thank all of you who are here for your commitment to this
    concept--this program relies on the lenders' understanding of the
    community and helps to empower the community with the needed resources
    to create jobs and growth. SBA looked to these lenders for guidance when
    this program was being designed. It is the lenders' history of investing
    in their communities that will ensure the program's success.
        Gail Miller from Dumas, Arkansas, started her pottery business,
    Miller's Mud Mill, 8 years ago, intent on making the money to send her
    sons to college and give them their shot at the American dream. Gail has
    had good and bad years, but she's learned that 15-hour days and 7-day
    weeks can produce a profit. In fact, she's had so many orders that she
    and her two-person staff can't keep up with the demand. Last year their
    inability to meet the demand cost her $90,000 in lost sales. How many
    business people in America would love to have that problem? Gail has
    found the answer, however. The Arkansas Enterprise Group, a microlender
    from Arkadelphia, Arkansas, knows a good thing when it sees it. Using
    funds they borrowed from the SBA through the microloan program, the
    group has granted Gail a $25,000 loan. She's going to use just under 20
    percent of the money to buy a version of the machine used by major china
    manufacturing companies. This increased capacity for production will
    finally allow her to take advantage of the demand for her product.
    She'll use the remaining funds for a revolving line of credit.
        Denise Cook used to receive welfare benefits through AFDC, but she
    understands that we all have a responsibility to work for self-reliance.
    Denise trained herself as a paralegal and put herself through school,
    working day and night. Eventually, she graduated with a B.A. in criminal
    justice. She worked for a number of different firms as a paralegal, but
    her strong desire for independence and a keen interest in forensic
    research drove her into starting her own business. Self-Help Ventures
    Fund in North Carolina has a peer-lending microenterprise program that
    requires training in business ownership, including peer counseling, as a
    prerequisite for the loan. After she completed the successful training
    period, Denise received a $500 loan to get her business off the ground.
    Today she provides investigative legal research to law firms and other
    clients.
        It is exactly these kinds of creative, hardworking people that the
    microloan program is designed to help. Since June of 1992, the Small
    Business Administration had awarded about $16 million to lenders who
    have already made 330 loans to small businesses. Today's awards rep-

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    resent another $16 million. And the Small Business Administration
    calculates that 42,000 jobs will result.
        Small business is the backbone of our economic strength. In the last
    10 to 12 years, small business has created more jobs that were lost
    during the restructuring of the larger businesses of our country.
    However, about 3 years ago, the small business job engine started to
    slow down because of the global recession, the credit crunch here in
    America which we are trying to deal with, the spiraling cost of health
    care, and other problems. But a lot of it is simply barriers to entry
    because of the lack of available capital.
        To preserve the vitality of small business, and increase their
    capacity to expand our work force, we need programs like this one. The
    best route to the American dream is the same route people have trod for
    many, many years now: through the small businesses. That's why we're
    expanding the microloan program today. It creates jobs, it relies on the
    private sector, it rewards drive and creativity.
        I want to say a special word of thanks again to the Congress and
    especially to Senator Bumpers, the chairman of the Small Business
    Committee, for making this possible. I want Gail Miller to be able to
    send her sons to college, and this program will give her the tools, and
    small business men and women like her, to do exactly that.
        Now I'd like to introduce two of the success stories here on the
    program. And I want to introduce all of them, of course: Erskine Bowles,
    the SBA Administrator, who has already talked; Denise Cook and Gail
    Miller who will speak; Geraldine Janes, Chris and Regina Welch are also
    up here with us, and they may or may not want to say anything. But
    Denise and Gail have agreed to speak, so I'd like to call first Denise
    Cook and then Gail Miller. Let's give them a hand. [Applause]

    [At this point, Ms. Cook and Ms. Miller discussed their experiences.]

        I want to thank all of you here who are lenders, who have worked on
    these programs. The folks up here on this platform are the kind of
    people I ran for President to try to help. And I am deeply moved by what
    we have seen today. It kind of reinforces my belief that these programs
    are on the right course and that we can make a huge difference, that
    there are millions of people our here, literally millions, who could be
    employed and empowered if we had the systems in place and the people
    there who felt comfortable making loans and making these kinds of
    judgments and understood what had to be done.
        And I thank all of you for being part of a genuine American
    experiment. I wish you well. I ask you to redouble your efforts. We'll
    redouble ours, and I know the Congress will make sure that we get what
    we need to make these programs succeed. I thank you all. And I thank
    you, Senator Bumpers, Senator Pressler, for being here. We're adjourned.
    Thank you very much.

    Note: The President spoke at 11:05 a.m. in the Rose Garden at the White
    House. In his remarks, he referred to small business owners Geraldine
    Janes and Chris and Regina Welch.