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A path out of poverty Micro-credit: Clinton, an early 'N supporter, should sign up for February summit.


PRESIDENT CLINTON kept his promise from the 1992 campaign to "end welfare as we know it." But he knows as well as anyone that changing welfare policies does not necessarily end poverty, which is the problem welfare was designed to address. If welfare reform is to succeed, poor people need a path out of poverty.

For some, that path might come in the form of a steady job that pays a living wage. But for many others, the best way to self-sufficiency will lie in entrepreneurial opportunities, businesses that take advantage of individual initiative and economic opportunities close to home.

Historically, a lack of access to credit and start-up capital has been a huge obstacle for poor entrepreneurs. But a world-wide movement in micro-credit has amply proven that poor people, especially poor women, can be better credit risks than traditional loan recipients, often exceeding the repayment rates at large banks. From its beginnings with the Grameen Bank in Bangladesh, the micro-credit movement has proven over and over again that even tiny loans of $10 or more can be enough to start a family on the road from poverty to relative prosperity. As governor of Arkansas, Mr. Clinton was an early supporter of the concept, facilitating the start-up of one of the oldest such funds in this country.

Come February, proponents, lenders and recipients of micro-credit loans are gathering in Washington, D.C., for a summit meeting on micro-credit. Together with heads of state, elected members of legislatures around the world and other advocates of micro-lending programs, they hope to give these efforts a major boost. An early announcement from President Clinton that he, too, will attend the summit would stir similar interest from many other heads of state.

Given his stake in welfare reform, President Clinton has much to gain from the spreading success of these programs in this country. When the Aspen Institute studied seven programs in the United States designed to offer small loans to the poor, it found that 62 percent of the participating households increased their incomes by anywhere from 25 to 75 percent over a three-year period.

Micro-credit programs represent the best kind of help countries around the world can offer to poor people -- not a handout, but an opportunity. President Clinton could help bring that message home with his presence at the February summit.

Pub Date: 12/22/96

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