[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-


[[Page 728]]

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.