International Microentprize Holds Leason

International Microenterprise Holds Lessons for Rural Development

by Jon Bailey, Center for Rural Affairs, jonb@cfra.org

As long-time readers know, the Center is an advocate of microenterprise and microcredit as key components to a rural development agenda centered on entrepreneurship and asset-building.

As we have witnessed, microenterprise development can lift people out of poverty and help build strong and sustainable households and communities.

We were, therefore, interested in two recent international developments in the wide ranging field of microenterprise development.

First, Muhammad Yumas was named the new Nobel Peace Prize honoree. Mr. Yumas was the founder of the Grameen Bank in Bangladesh and is considered the father of microcredit and microenterprise. The Grameen Bank was the model of many microenterprise development initiatives throughout the world, including the Center’s REAP program.

The honor bestowed upon Mr. Yumas is significant because it recognizes the importance of economic social justice to peace. Yumas’ central theory – and the central theory of REAP and microenterprise development and asset-building initiatives in general – is that lending to low-income people to build business enterprises and assets builds self-sufficiency. In the long run, building businesses and assets is the most effective and efficient anti-poverty strategy around.

A recent article in the Micro Enterprise Journal stated that Yumas’ vision taught that microenterprise development is about an “understanding that just because a man (or woman) is poor, that doesn’t mean he (or she) is unworthy of the American Dream.” Making the opportunity for the American Dream available to all in rural America should be the central goal of rural development policy in the 2007 farm bill.

The second international development comes from the “what’s good for the goose is good for the gander” department. On July 27, 2006, Jacqueline Shafer, Assistant Administrator of the Bureau of Economic Growth, Agriculture and Trade of the U.S. Agency for International Development (USAID) testified before the U.S. House of Representatives.

The subject of her speech was USAID’s implementation of international microenterprise legislation and appropriations. At a time when domestic microenterprise and small business development funding was being cut or proposed for elimination, the United States obligated over $200 million for microenterprise development in 68 other nations.

The reason for this laudable international response: the U.S. government, according to Ms. Shafer’s testimony, believes microenterprise development “Strengthens economic opportunities for poorer households,” enabling families to build assets, cope with risks … and plan for better futures for their children.” In addition, the U.S. government, according to Ms. Shafer, believes that microenterprise development “can contribute to poverty alleviation in a sustainable and commercially viable way.”

While USAID was making those assertions for rural places in other countries, we and others have found them to be as true for rural America. As we begin debate on a new rural policy, U.S. policymakers should listen to the lessons of the world.

Agree? Disagree? Post a comment here or contact John Crabtree, johnc@cfra.org

Center for Rural Affairs
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