Summary

The Business and Industrial Loan Program of the Farmers Home Administration (FmHA) was established to help to save and create jobs in rural areas. Congress appropriated and the agency obligated about $550 million in loans during fiscal years (FY) 1974 and 1975, of which $117 million was designated for programs in Alabama, Arkansas, Georgia, Louisiana, Mississippi, and Tennessee.

Congress needs accurate data to judge the program's effectiveness. Although the agency reported that 29,800 jobs were saved and created in FY 1975, data supplied by the borrowers on approved loans showed that only about 11,100 jobs were saved and created. The higher number included figures for loans which had not been approved or which had been deobligated as of June 30, 1976. Further, the job data supplied by borrowers for 27 loans reviewed was overstated by more than 100 percent. The agency is developing a management information system for all its programs, but the accuracy of the information put into the system needs to be veritied.