Economic Development:

More Federal Efforts Needed To Improve Indians' Standard of Living Through Business Development

CED-78-50: Published: Feb 15, 1978. Publicly Released: Feb 15, 1978.

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The Indian Financing Act of 1974 was enacted to stimulate economic development on Indian reservations by increasing the availability of funds for starting and expanding business enterprises.

Eight Federal agencies administering 25 grant, loan, and technical assistance programs have not been very successful because the Indian reservations are not generally well suited for business development. Some of the reservations have little potential for success without long-term Federal assistance. From fiscal years 1975 through 1977, the Economic Development Administration (EDA) and the Bureau of Indian Affairs (BIA) have provided $294 million through loans and grants to help establish businesses on Indian reservations. In 45 industrial parks financed by EDA, the number of businesses decreased since 1973. Deficiences in BIA administration has caused the loan and grant programs to suffer from delinquencies, inadequate accounting systems, poor analysis of loan and grant applications, missing documents in loan and grant files, inadequate loan servicing, short repayment terms, and limited provision of technical assistance. About 300,000 Indians are not eligible for loans because of certain prohibitions in the Act.

Matter for Congressional Consideration

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Matter: Congress should: determine whether retstrictive provisions in the Act should continue and, if not, amend the Act; and consolidate Federal Indian economic development programs and place them in a single agency.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Administrator of EDA and the Assistant Secretary for Indian Affairs should be directed cooperatively to: (1) conduct an economic feasibility study that identifies reservations most likely to support self-sustaining economic development and carry out a comprehensive business development program; and (2) decide whether long-term Federal alternative strategies are needed. If so, new strategies should be developed and proposed to Congress.

    Agency Affected:

 

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