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[Senate Report 106-335]
[From the U.S. Government Publishing Office]

                                                       Calendar No. 670
106th Congress                                                   Report
                                 SENATE
 2d Session                                                     106-335

======================================================================

 
                 THE MICROENTERPRISE FOR SELF-RELIANCE
                              ACT OF 2000

                                _______
                                

                 July 11, 2000.--Ordered to be printed

                                _______
                                

          Mr. Helms, from the Committee on Foreign Relations,
                        submitted the following

                              R E P O R T

                         [To accompany S. 2844]

    The Committee on Foreign Relations, having had under 
consideration a bill to amend the Foreign Assistance Act of 
1961 to authorize the provision of assistance to increase the 
availability of credit to microenterprises lacking full access 
to credit, to establish a Microfinance Loan Facility, and for 
other purposes, reports favorably thereon and recommends that 
the bill do pass.

                                CONTENTS

                                                                   Page

  I. Committee Action.................................................1
 II. Section-by-Section Analysis......................................2
III. Cost Estimate....................................................4
 IV. Evaluation of Regulatory Impact..................................6
  V. Changes in Existing Law..........................................6

                          I. Committee Action

    On March 23, 2000 the Committee unanimously ordered 
reported S. 2382, the Technical Assistance, Trade Promotion and 
Anti-Corruption Act of 2000. S. 2382 was reported and placed on 
the Senate Legislative Calendar on April 7, 2000, and 
subsequently referred to the Committee on Banking, Housing, and 
Urban Affairs pursuant to paragraph 1(j)(10) of rule XXV of the 
Standing Rules of the Senate on April 11, 2000. Paragraph 
1(j)(10) of rule XXV of the Standing Rules of the Senate 
provides that, ``at the request of the Committee on Banking, 
Housing, and Urban Affairs, any proposed legislation relating 
to [the International Monetary Fund] reported by the Committee 
on Foreign Relations shall be referred to the Committee on 
Banking, Housing, and Urban Affairs.'' The Banking Committee 
has taken no action on S. 2382 as of the writing of this 
report.
    On Wednesday, June 28, 2000, the Committee on Foreign 
Relations considered and unanimously approved by voice vote the 
Microenterprise for Self-Reliance Act of 2000, which is 
identical to Title VI of S. 2382, the Technical Assistance, 
Trade Promotion, and Anti-Corruption Act of 2000.

                    II. Section-by-Section Analysis

    This act is based largely on S. 1463, the Microenterprise 
for Self-Reliance Act of 1999, introduced on July 29, 1999. 
Despite the enormous growth of the world's economy, over a 
billion people in dozens of countries subsist on less than one 
dollar per day. The benefits of economic growth have eluded 
approximately one-fifth of the world's population, leaving 
tremendous poverty in developing countries around the world. 
Accordingly, one of the greatest challenges facing the 
international development community has been finding ways to 
extend economic opportunities to these individuals.
    Since the 1970s, microenterprise development programs have 
been one of the most successful ways to support the end of 
poverty in the developing world. Unlike other assistance 
programs, microenterprise lending programs reach the poorest of 
the poor with credit that is repaid by individual borrowers 
with interest. Microlending programs have demonstrated that if 
structured correctly, poverty lending programs can help lift 
the poorest members of society out of poverty, while repaying 
loans. In fact, the client repayment rate of these programs has 
been between 95-98%.
    The objective of this act is to ensure the future success 
of international microenterprise grant and loan programs 
administered worldwide by the U.S. Agency for International 
Development (USAID). These programs foster self-sufficiency 
rather than financial dependence.

Sec. 1. Short Title

    This section provides the short title for the act will be 
``Microenterprise for Self-Reliance Act of 2000''.

Sec. 2. Findings and Declarations of Policy

    This section contains 18 findings on the demand for 
microenterprise credits, the success with past programs and the 
need for their expansion in the developing world.

Sec. 3. Purposes

    This section sets forth five main purposes of the Act, each 
aimed at bringing microenterprise development to the forefront 
of the U.S. assistance effort. The continuation and expansion 
of commitments made by USAID in its 1994 and 1997 
Microenterprise Initiatives are provided for, as are increases 
in the amount of assistance devoted to financial services and 
complimentary business development services reaching the 
poorest sector in developing countries, particularly women.

Sec. 4. Microenterprise Development Grant Assistance

    This section adds a new section 132 to the Foreign 
Assistance Act of 1961 to authorize appropriations for grants 
and govern the use of all microenterprise resources.
    Subsection (b)(1) of section 132 authorizes the President 
to provide grant assistance for programs to increase the 
availability of credit and other business development services 
to microenterprises. Subsection (b)(2) stipulates that this 
assistance be provided through organizations that have a 
capacity to develop and implement microenterprise development 
programs.
    This section also targets half of all microenterprise 
resources to support programs that directly serve the poorest 
of the poor. These programs are identified as those that 
provide credit and other financial services to entrepreneurs 
who are very poor, with loans defined by the following loan 
proxies: $1,000 or less in the Europe and Eurasia region, $400 
or less in the Latin America region, and $300 or less in the 
rest of the world (in 1995 U.S. dollars).
    Subsection (d) of the new section 131 authorizes 
$150,000,000 for fiscal year 2001 to carry out these 
initiatives. Such funds are to include local currencies, are to 
be drawn from Part I (including chapter 4 of Part II) of the 
Foreign Assistance Act of 1961 and from the SEED Act of 1989, 
relating to aid to East European nations.

Sec. 5. Micro- and Small Enterprise Development Credits

    This section amends section 108 of the Foreign Assistance 
Act of 1961 to authorize the President to provide assistance to 
increase the availability of credit to micro- and small 
enterprises to ensure the stable growth of developing 
countries. This assistance includes loans and guarantees to 
credit institutions, as well as training programs for both 
lenders and microentrepreneurs.

Sec. 6. Microfinance Loan Facility

    This section adds a new section 133 to the Foreign 
Assistance Act of 1961 authorizing the establishment within 
USAID of a United States Microfinance Loan Facility to pool and 
manage the risk from natural disasters, war or civil conflict, 
national financial crisis, or short-term financial movements 
that threaten the long-term development of U.S.-supported 
microfinance institutions. The USAID Administrator is 
authorized to make loans or loan guarantees, drawing from 
resources of the Facility, to such institutions in order to 
prevent bankruptcy caused by the risks noted above. During 
fiscal year 2001, Congress must be advised 15 days in advance 
of making available funds from the Facility.
    Subsection (c)(3) gives the USAID Administrator the 
authority to issue credit assistance on such terms and 
conditions, including fees, as the Administrator may determine. 
The principal amount of loans or loan guarantees in any fiscal 
year with respect to a single event is limited to $30,000,000.
    Subsection (d) authorizes $5,000,000 for fiscal year 2001 
for the subsidy cost of the loans and for administrative 
expenses. These funds are to be drawn from those available 
under Part I of the Foreign Assistance Act of 1961.

Sec. 7. Report Relating to Future Development of Microenterprise 
        Institutions

    This section is intended to lay a foundation for the future 
development of the microfinance sector. Subsection (a) requires 
the President to prepare and transmit to Congress a report on 
the most cost-effective methods and measurements for increasing 
the access of poor people to credit, other financial services, 
and related training. In particular, the Administration should 
develop a comprehensive strategy to advance the global 
microenterprise strategy in a way that maintains market 
principles while assuring the very poor, particularly women, 
obtain access to financial services.

Sec. 8. United States Agency for International Development as Global 
        Leader and Coordinator of Bilateral and Multilateral 
        Microenterprise Assistance Activities

    This section contains findings and a sense of the Congress 
that the development of the microfinance sector should be 
included in multilateral discussions and institutions such as 
the International Fund for Agricultural Development (IFAD) and 
the United Nations Development Program (UNDP). In addition, the 
Secretary of the Treasury should instruct each U.S. Executive 
Director of the Multilateral Banks (MDBs) to advocate the 
development of a coherent and coordinated strategy to support 
the microenterprise sector.

Sec. 9. Definitions

    Section 9 contains definitions of terms used in this act.

                           III. Cost Estimate

    In accordance with rule XXVI, paragraph 11(a) of the 
Standing Rules of the Senate, the Committee provides the 
following estimate of the cost of this legislation prepared by 
the Congressional Budget Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, June 29, 2000.

Hon. Jesse Helms, Chairman,
U.S. Senate,
Committee on Foreign Relations,
Washington, DC.

    Dear Mr. Chairman:
    The Congressional Budget Office has prepared the enclosed 
cost estimate for the Microenterprise for Self-Reliance Act of 
2000.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Joseph C. 
Whitehill.
            Sincerely,
                                  Dan L. Crippen, Director.

Enclosure.

               CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

Summary
    The Microenterprise for Self-Reliance Act of 2000 would 
authorize grants and loans to capitalize institutions that 
would make very small loans in developing countries. It also 
would authorize training and technical assistance to customers 
and managers of such institutions. In addition, the bill would 
create a loan facility that would offer subsidized loans to 
such institutions should they face bankruptcy due to natural 
disasters, wars, or severe financial crisis. CBO estimates that 
appropriation of the authorized amounts would result in 
additional outlays of $145 million over the next five years. 
Because the bill would not affect direct spending or receipts, 
pay-as-you-go procedures would not apply.
    The bill contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would not affect the budgets of state, local, or tribal 
governments.
Estimated Cost to the Federal Government
    The estimated budgetary impact of the bill is shown in the 
following table. The costs of this legislation fall within 
budget function 150 (international affairs).

                    Spending Subject to Appropriation
                [By fiscal year, in millions of dollars]
------------------------------------------------------------------------
                                 2000   2001   2002   2003   2004   2005
------------------------------------------------------------------------
Spending Under Current Law for
 Microenterprise Grants and
 Loans:
  Budget Authority \1\........    140      0      0      0      0      0
  Estimated Outlays...........    130    126     50     28     18     12
Proposed Changes:
  Estimated Authorization           0    157      0      0      0      0
   Level......................
  Estimated Outlays...........      0     12     87     28     11      7
Spending Under the Bill for
 Microenterprise Grants and
 Loans:
  Estimated Authorization         140    157      0      0      0      0
   Level \1\..................
  Estimated Outlays...........    130    138    137     55     29     18
------------------------------------------------------------------------
\1\ The 2000 level is the amount appropriated for that year.

Basis of Estimate
    Under current law, the Administration provides grants and 
loans to small-scale financial institutions through several 
different programs. The bill would authorize appropriations of 
$150 million in 2001 for grant assistance. The bill would 
authorize a program of micro- and small-enterprise credits, 
though it does not specify a funding level. CBO assumes that 
the credit program would continue at the current funding level 
of $2 million for administrative costs and credit subsidies in 
2001.
    The bill would also create a new loan facility to assist 
U.S.-sponsored, microfinance institutions that face bankruptcy 
due to natural disaster, war, or severe national financial 
crisis. It would authorize up to $5 million for the cost of 
subsidized loans in 2001.
    CBO estimates that outlays from the bill's authorizations 
would total $145 million over the 2001-2005 period, assuming 
appropriation of the necessary amounts and historical spending 
patterns.
Pay-As-You-Go Considerations
    None.
Previous CBO Estimate
    On April 6, 2000, CBO transmitted a cost estimate for S. 
2382, the Technical Assistance, Trade Promotion, and Anti-
Corruption Act of 2000. This bill contains a subset of the 
provisions in the earlier bill, and the cost estimates for 
those provisions are the same.
Intergovernmental and Private-Sector Impact
    The Microenterprise for Self-Reliance Act of 2000 contains 
no intergovernmental or private-sector mandates as defined in 
UMRA and would not affect the budgets of state, local, or 
tribal governments.
Estimate Prepared By
    Federal costs: Joseph C. Whitehill. Impact on state, local, 
and tribal governments: Leo Lex. Impact on the private sector: 
Lauren Marks.
Estimate Approved By
    Peter H. Fontaine, Deputy Assistant Director for Budget 
Analysis.

                  IV. Evaluation of Regulatory Impact

    In accordance with rule XXVI, paragraph 11(b) of the 
Standing Rules of the Senate, the Committee has concluded that 
there is no regulatory impact from this legislation.

                       V. Changes in Existing Law

    In compliance with paragraph 12 rule XXVI of the Standing 
Rules of the Senate, changes in existing law made by the bill, 
as reported, are shown as follows (existing law proposed to be 
omitted is enclosed in black brackets, new matter is printed in 
italic, existing law in which no change is proposed is shown in 
roman):

Foreign Assistance Act of 1961

           *       *       *       *       *       *       *

    [Sec. 108. Private Sector Revolving Fund.--(a) The Congress 
finds that the development of private enterprise, including 
cooperatives, is a vital factor in the stable growth of 
developing countries and in the development and stability of a 
free, open, and equitable international economic system. It is 
therefore in the best interests of the United States to assist 
the development of the private sector in developing countries 
and to engage the United States private sector in that process. 
In order to promote such private sector development, the 
President is authorized to establish a revolving fund account 
in the United States Treasury. All funds deposited in such 
account shall, notwithstanding any provision in an 
appropriation Act to the contrary, be free from fiscal year 
limitations.
    [(b) Of the funds made available under this chapter in each 
of the fiscal years 1986 and 1987, up to $18,000,000 may be 
deposited in this account. Such funds used in accordance with 
the policies and authorities of this section shall be in 
addition to other funds available for private sector activities 
under other authorities in this Act. Any reflows and income 
arising from activities carried out pursuant to this section, 
including loan repayments and fee income (as provided in 
subsection (e) of this section), shall be deposited into the 
revolving fund and remain available to carry out the purposes 
of this section. All funds in such account may be invested in 
obligations of the United States.
    [(c) (1) The agency primarily responsible for administering 
this part is authorized to use the funds maintained in this 
revolving fund account to furnish assistance in furtherance of 
the policy of subsection (a) on such terms and conditions as it 
may determine. Amounts in the revolving fund account shall be 
available for obligation for assistance under this section only 
to such extent as may be provided in advance in appropriation 
Acts. Assistance may be provided under this section without 
regard to sections 604(a) and 620(r) of this Act.
    [(2) Assistance under this section may be provided only to 
support private sector activities which--
          [(A) are consistent with the United States 
        development assistance policies set forth in section 
        102 of this Act and with the development priorities of 
        the host country;
          [(B) are the types of activities for which assistance 
        may be provided under sections 103 through 106 of this 
        Act;
          [(C) will have a demonstration effect;
          [(D) will be innovative;
          [(E) are financially viable;
          [(F) will maximize the development impact appropriate 
        to the host country, particularly in employment and the 
        use of appropriate technology; and
          [(G) are primarily directed to making available to 
        small business enterprises and cooperatives necessary 
        support and services which are not otherwise generally 
        available.
[In determining whether an enterprise is a small business 
enterprise, the agency primarily responsible for administering 
this part shall take into consideration the enterprise's total 
net fixed assets and number of employees, together with the 
relevant definition utilized by the host country government and 
the International Bank for Reconstruction and Development and 
other international organizations.
    [(3)(A) Not more than $3,000,000 may be made available 
under this section to support any one project.
    [(B) Not more than 50 per centum of the financial support 
for any project may be provided under this section, and a 
substantial portion of the financial support for a project 
assisted under this section must be provided by sources within 
the host country.
    [(C) Not more than 20 per centum of the assets of the 
revolving fund account under this section may be used to 
support projects in any one country.
    [(D) In order to maximize the impact on institution 
building, loans under this section shall be made primarily to 
intermediary entities which provide necessary support and 
services for private sector activities.
    [(E) Loans under this section shall be at or near the 
interest rate otherwise available to the recipient.
    [(d) (1) If at any time the assets of the revolving fund 
account exceeds $100,000,000, the President shall remit the 
amount in excess of $100,000,000 to the United States Treasury.
    [(2) As used in this section, ``assets'' includes amounts 
in the revolving fund account plus the value of investments 
made with amounts from the fund plus the current value of 
outstanding obligations under loans under this section.
    [(3) In addition to the requirement of paragraph (1), at 
the end of any fiscal year, the agency primarily responsible 
for administering this part may determine that amounts in the 
revolving fund are sufficient to permit the remittance to the 
United States Treasury of an amount equal to a portion or the 
total amount of appropriated funds deposited in the revolving 
fund. Any such remittance shall be deemed to be a decrease in 
the appropriated funds in the revolving fund. After remittance 
has been made of an amount equal to the total amount of 
appropriated funds, the revolving fund shall consist and be 
deemed to consist entirely of nonappropriated funds.
    [(e) A fee may be charged, where appropriate, in carrying 
out activities with funds from the revolving fund authorized in 
this section. The amount of any such fee shall be determined by 
the agency primarily responsible for administering this part.
    [(f) In the event the revolving fund is terminated, all 
unobligated money in the fund at the time of such termination 
shall be transferred to and become part of the miscellaneous 
receipts account of the Treasury.
    [(g) As part of its annual congressional presentation 
documents submitted to the Congress, the agency primarily 
responsible for administering this part shall include a 
description of projects proposed to be funded from the 
revolving fund account for that fiscal year. To the extent that 
projects are proposed for funding which are not contained in 
the annual congressional presentation documents, at least 
fifteen days' advance notification shall be provided to the 
Congress in accordance with section 634A of this Act.
    [(h) Not later than December 31 of each year, the President 
shall submit a comprehensive report which details all projects 
funded under this section during the previous fiscal year, all 
reflows to the revolving fund account, a status report on all 
projects currently contained in the fund's portfolio. Such 
reports shall include, but not be limited to, information 
regarding numbers and kinds of beneficiaries reached, amounts 
and kinds of benefits provided by the funded projects to 
targeted populations, and a justification for projects within 
the context of the goals and objectives of the United States 
development assistance program.
    [(i) (1) To carry out the purposes of subsection (a), in 
addition to the other authorities set forth in this section, 
the agency primarily responsible for administering this part is 
authorized to issue guarantees on such terms and conditions as 
it shall determine assuring against losses incurred in 
connection with loans made to projects that meet the criteria 
set forth in subsection (c). The full faith and credit of the 
United States is hereby pledged for the full payment and 
performance of such guarantees.
    [(2) Loans guaranteed under this subsection shall be on 
such terms and conditions as the agency may prescribe, except 
for the following:
          [(A) The agency shall issue guarantees only when it 
        is necessary to alleviate a credit market imperfection.
          [(B) Loans guaranteed shall provide for complete 
        amortization within a period not to exceed ten years 
        or, if the principal purpose of the guaranteed loan is 
        to finance the construction or purchase of a physical 
        asset with a useful life of less than ten years, within 
        a period not to exceed such useful life.
          [(C) No loan guaranteed to any one borrower may 
        exceed 50 percent of the cost of the activity to be 
        financed, or $3,000,000, whichever is less, as 
        determined by the agency.
          [(D) No loan may be guaranteed unless the agency 
        determines that the lender is responsible and that 
        adequate provision is made for servicing the loan on 
        reasonable terms and protecting the financial interest 
        of the United States.
          [(E) The fees earned from the loan guarantees issued 
        under this subsection shall be deposited in the 
        revolving fund account as part of the guarantee reserve 
        established under paragraph (5) of this subsection. 
        Fees shall be assessed at a level such that the fees 
        received, plus the funds from the revolving fund 
        account placed in the guarantee reserve satisfy the 
        requirements of paragraph (5). Fees shall be reviewed 
        every twelve months to ensure that the fees assessed on 
        new loan guarantees are at the required level.
          [(F) Any guarantee shall be conclusive evidence that 
        such guarantee has been properly obtained, and that the 
        underlying loan as contracted qualifies for such 
        guarantee. Except for fraud or material 
        misrepresentation for which the parties seeking payment 
        under such guarantee are responsible, such guarantee 
        shall be presumed to be valid, legal, and enforceable.
          [(G) The agency shall determine that the standards 
        used by the lender for assessing the credit risk of new 
        and existing guaranteed loans are reasonable. The 
        agency shall require that there be a reasonable 
        assurance of repayment before credit assistance is 
        extended.
          [(H) Commitments to guarantee loans may be made by 
        the agency only to the extent that the total loan 
        principal, any part of which is guaranteed, will not 
        exceed the amount specified in annual appropriations 
        Acts.
    [(3) To the extent that fees are not sufficient as 
specified under paragraph (2)(E) to cover expected future 
liabilities, appropriations are authorized to maintain an 
appropriate reserve.
    [(4) The losses guaranteed under this subsection may be in 
dollars or in other currencies. In the case of loans in 
currencies other than dollars, the guarantees issued shall be 
subject to an overall payment limitation expressed in dollars.
    [(5) The agency shall segregate in the revolving fund 
account and hold as a reserve an amount estimated to be 
sufficient to cover the agency's expected net liabilities on 
the loan guarantees outstanding under this subsection; except 
that the amount held in reserve shall not be less than 25 
percent of the principal amount of the agency's outstanding 
contingent liabilities on such guarantees. Any payments made to 
discharge liabilities arising from the loan guarantees shall be 
paid first out of the assets in the revolving fund account and 
next out of other funds made available for this purpose.]

SEC. 108. MICRO- AND SMALL ENTERPRISE DEVELOPMENT CREDITS.

  (a) Findings and Policy.--Congress finds and declares that--
          (1) the development of micro- and small enterprises 
        are a vital factor in the stable growth of developing 
        countries and in the development and stability of a 
        free, open, and equitable international economic 
        system; and
          (2) it is, therefore, in the best interests of the 
        United States to assist the development of the 
        enterprises of the poor in developing countries and to 
        engage the United States private sector in that 
        process.
  (b) Program.--To carry out the policy set forth in subsection 
(a), the President is authorized to provide assistance to 
increase the availability of credit to micro- and small 
enterprises lacking full access to credit, including through--
          (1) loans and guarantees to credit institutions for 
        the purpose of expanding the availability of credit to 
        micro- and small enterprises;
          (2) training programs for lenders in order to enable 
        them to better meet the credit needs of 
        microentrepreneurs; and
          (3) training programs for microentrepreneurs in order 
        to enable them to make better use of credit and to 
        better manage their enterprises.
  (c) Eligibility Criteria.--The Administrator of the United 
States Agency for International Development shall establish 
criteria for determining which entities described in subsection 
(b) are eligible to carry out activities, with respect to 
micro- and small enterprises, assisted under this section. Such 
criteria may include the following:
          (1) The extent to which the recipients of credit from 
        the entity do not have access to the local formal 
        financial sector.
          (2) The extent to which the recipients of credit from 
        the entity are among the poorest people in the country.
          (3) The extent to which the entity is oriented toward 
        working directly with poor women.
          (4) The extent to which the entity recovers its cost 
        of lending.
          (5) The extent to which the entity implements a plan 
        to become financially sustainable.
  (d) Additional Requirement.--Assistance provided under this 
section may only be used to support micro- and small enterprise 
programs and may not be used to support programs not directly 
related to the purposes described in subsection (b).
  (e) Authorized Uses of Funds.--
          (1) In general.--Amounts made available to carry out 
        this section may be used for, among other things--
                  (A) the subsidy cost, as defined in section 
                502(5) of the Federal Credit Reform Act of 
                1990, for activities under this section; and
                  (B) the cost of administration expenses in 
                carrying out credit activities under this 
                section.
          (2) Default and procurement provisions.--
                  (A) Default provision.--The provisions of 
                section 620(q), or any comparable provision of 
                law, shall not be construed to prohibit 
                assistance to a country in the event that a 
                private sector recipient of assistance 
                furnished under this section is in default in 
                its payment to the United States for the period 
                specified in such section.
                  (B) Procurement provision.--Assistance may be 
                provided under this section without regard to 
                section 604(a).
          (3) Rule of construction.--Amounts authorized to be 
        appropriated under this subsection are in addition to 
        amounts otherwise available to carry out this section.

           *       *       *       *       *       *       *

SEC. 131. COORDINATED DONOR STRATEGY FOR SUPPORT AND EDUCATION OF 
                    ORPHANS IN SUB-SAHARAN AFRICA.

  (a) Statement of Policy.--It is in the national interest of 
the United States to assist in mitigating the burden that will 
be placed on sub-Saharan African social, economic, and 
political institutions as these institutions struggle with the 
consequences of a dramatically increasing AIDS orphan 
population, many of whom are themselves infected by HIV/AIDS. 
Effectively addressing that burden and its consequences in sub-
Saharan Africa will require a coordinated multidonor strategy.
  (b) Development of Strategy.--The President shall coordinate 
the development of a multidonor strategy to provide for the 
support and education of AIDS orphans and the families, 
communities, and institutions most affected by the HIV/AIDS 
epidemic in sub-Saharan Africa.
  (c) Authority.--Assistance made available under this section 
may be made available notwithstanding any other provision of 
law.
  (d) Definition.--In this section, the term ``HIV/AIDS'' 
means, with respect to an individual, an individual who is 
infected with--
          (1) the human immunodeficiency virus (HIV); or
          (2) HIV and the acquired immune deficiency virus 
        (AIDS).

SEC. 132. MICROENTERPRISE DEVELOPMENT GRANT ASSISTANCE.

  (a) Findings and Policy.--Congress finds and declares that--
          (1) the development of microenterprise is a vital 
        factor in the stable growth of developing countries and 
        in the development of free, open, and equitable 
        international economic systems;
          (2) it is therefore in the best interest of the 
        United States to assist the development of 
        microenterprises in developing countries; and
          (3) the support of microenterprise can be served by 
        programs providing credit, savings, training, technical 
        assistance, and business development services.
  (b) Authorization.--
          (1) In general.--In carrying out this part, the 
        President is authorized to provide grant assistance for 
        programs to increase the availability of credit and 
        other services to microenterprises lacking full access 
        to capital training, technical assistance, and business 
        development services through--
                  (A) grants to microfinance institutions for 
                the purpose of expanding the availability of 
                credit, savings, and other financial services 
                to microentrepreneurs;
                  (B) grants to microenterprise development 
                institutions for the purpose of training, 
                technical assistance, and business development 
                services for microenterprises to enable them to 
                make better use of credit, to better manage 
                their enterprises, and to increase their income 
                and build their assets;
                  (C) capacity building for microenterprise 
                development institutions in order to enable 
                them to better meet the credit and training 
                needs of microentrepreneurs; and
                  (D) policy and regulatory programs at the 
                country level that improve the environment for 
                microentrepreneurs and microenterprise 
                development institutions that serve the poor 
                and very poor.
          (2) Implementation.--Assistance authorized under 
        paragraph (1) shall be provided through organizations 
        that have a capacity to develop and implement 
        microenterprise programs, including particularly--
                  (A) United States and indigenous private and 
                voluntary organizations;
                  (B) United States and indigenous credit 
                unions and cooperative organizations; or
                  (C) other indigenous governmental and 
                nongovernmental organizations.
          (3) Targeted assistance.--In carrying out sustainable 
        poverty-focused programs under paragraph (1), 50 
        percent of all microenterprise resources shall be 
        targeted to very poor enterpreneurs, defined as those 
        living in the bottom 50 percent below the poverty line 
        as established by the national government of the 
        country. Specifically, such resources shall be used 
        for--
                  (A) direct support of programs under this 
                subsection through practitioner institutions 
                that--
                          (i) provide credit and other 
                        financial services to entrepreneurs who 
                        are very poor, with loans in 1995 
                        United States dollars of--
                                  (I) $1,000 or less in the 
                                Europe and Eurasia region;
                                  (II) $400 or less in the 
                                Latin America region; and
                                  (III) $300 or less in the 
                                rest of the world; and
                          (ii) can cover their costs in a 
                        reasonable time period; or
                  (B) demand-driven business development 
                programs that achieve reasonable cost recovery 
                that are provided to clients holding poverty 
                loans (as defined by the regional poverty loan 
                limitations in subparagraph (A)(i)) whether 
                they are provided by microfinance institutions 
                or by specialized business development services 
                providers.
          (4) Support for central mechanisms.--The President 
        should continue support for central mechanisms and 
        missions that--
                  (A) provide technical support for field 
                missions;
                  (B) strengthen the institutional development 
                of the intermediary organizations described in 
                paragraph (2);
                  (C) share information relating to the 
                provision of assistance authorized under 
                paragraph (1) between such field missions and 
                intermediary organizations; and
                  (D) support the development of nonprofit 
                global microfinance networks, including credit 
                union systems, that--
                          (i) are able to deliver very small 
                        loans through a vast grassroots 
                        infrastructure based on market 
                        principles; and
                          (ii) act as wholesale intermediaries 
                        providing a range of services to 
                        microfinance retail institutions, 
                        including financing, technical 
                        assistance, capacity building and 
                        safety and soundness accreditation.
          (5) Limitation.--Assistance provided under this 
        subsection may only be used to support microenterprise 
        programs and may not be used to support programs not 
        directly related to the purposes described in paragraph 
        (1).
          (6) Definition.--In this subsection, the term 
        ``business development services'' means support for the 
        growth of microenterprises through training, technical 
        assistance, marketing assistance, improved production 
        technologies, and other services.
  (c) Monitoring System.--In order to maximize the sustainable 
development impact of the assistance authorized under 
subsection (a)(1), the Administrator of the United States 
Agency for International Development shall establish a 
monitoring system that--
          (1) establishes performance goals for such assistance 
        and expresses such goals in an objective and 
        quantifiable form, to the extent feasible;
          (2) establishes performance indicators to be used in 
        measuring or assessing the achievement of the goals and 
        objectives of such assistance;
          (3) provides a basis for recommendations for 
        adjustments to such assistance to enhance the 
        sustainable development impact of such assistance, 
        particularly the impact of such assistance on the very 
        poor, particularly poor women; and
          (4) provides a basis for recommendations for 
        adjustments to measures for reaching the poorest of the 
        poor, including proposed legislation containing 
        amendments to improve paragraph (3).
  (d) Level of Assistance.--Of the funds made available under 
this part and the Support for East European Democracy (SEED) 
Act of 1989, including local currencies, there are authorized 
to be available $135,000,000 during fiscal year 2001, and 
$150,000,000 during fiscal year 2002, to carry out the 
provisions of this section.

SEC. 133. UNITED STATES MICROFINANCE LOAN FACILITY.

  (a) Establishment.--The Administrator is authorized to 
establish a United States Microfinance Loan Facility (in this 
section referred to as the ``Facility'') to pool and manage the 
risk from natural disasters, war or civil conflict, national 
financial crisis, or short-term financial movements that 
threaten the long-term development of United States-supported 
microfinance institutions.
  (b) Disbursements.--
          (1) In general.--The Administrator shall make 
        disbursements from the Facility to United States-
        supported microfinance institutions to prevent the 
        bankruptcy of such institutions caused by--
                  (A) natural disasters;
                  (B) national wars or civil conflict; or
                  (C) national financial crisis or other short-
                term financial movements that threaten the 
                long-term development of United States-
                supported microfinance institutions.
          (2) Form of assistance.--Assistance under this 
        section shall be in the form of loans or loan 
        guarantees for microfinance institutions that 
        demonstrate the capacity to resume self-sustained 
        operations within a reasonable time period.
          (3) Congressional notification procedures.--During 
        each of the fiscal years 2001 and 2002, funds may not 
        be made available from the Facility until 15 days after 
        notification of the proposed availability of the funds 
        has been provided to the congressional committees 
        specified in section 634A in accordance with the 
        procedures applicable to reprogramming notifications 
        under that section.
  (c) General Provisions.--
          (1) Policy provisions.--In providing the credit 
        assistance authorized by this section, the 
        Administrator should apply, as appropriate, the policy 
        provisions in this part that are applicable to 
        development assistance activities.
          (2) Default and procurement provisions.--
                  (A) Default provision.--The provisions of 
                section 620(q), or any comparable provision of 
                law, shall not be construed to prohibit 
                assistance to a country in the event that a 
                private sector recipient of assistance 
                furnished under this section is in default in 
                its payment to the United States for the period 
                specified in such section.
                  (B) Procurement provision.--Assistance may be 
                provided under this section without regard to 
                section 604(a).
          (3) Terms and conditions of credit assistance.--
                  (A) In general.--Credit assistance provided 
                under this section shall be offered on such 
                terms and conditions, including fees charged, 
                as the Administrator may determine.
                  (B) Limitation on principal amount of 
                financing.--The principal amount of loans made 
                or guaranteed under this section in any fiscal 
                year, with respect to any single borrower, may 
                not exceed $30,000,000.
                  (C) Exception.--No payment may be made under 
                any guarantee issued under this section for any 
                loss arising out of fraud or misrepresentation 
                for which the party seeking payment is 
                responsible.
          (4) Full faith and credit.--All guarantees issued 
        under this section shall constitute obligations, in 
        accordance with the terms of such guarantees, of the 
        United States of America, and the full faith and credit 
        of the United States of America is hereby pledged for 
        the full payment and performance of such obligations to 
        the extent of the guarantee.
  (d) Funding.--
          (1) Allocation of funds.--
                  (A) In general.--Of the amounts made 
                available to carry out this part for each of 
                the fiscal years 2000 and 2001, up to 
                $5,000,000 may be made available for--
                          (i) the subsidy cost, as defined in 
                        section 502(5) of the Federal Credit 
                        Reform Act of 1990, to carry out this 
                        section; and
                          (ii) subject to subparagraph (B), the 
                        cost of administrative expenses to 
                        carry out this section.
                  (B) Limitation on administrative expenses.--
                Of the amount made available under subparagraph 
                (A) to carry out this section for a fiscal 
                year, not more than $500,000 may be made 
                available for administrative expenses under 
                subparagraph (A)(ii).
          (2) Relation to other funding.--Amounts made 
        available under paragraph (1) are in addition to 
        amounts available under any other provision of law to 
        carry out this section.
  (e) Definitions.--In this section:
          (1) Administrator.--The term ``Administrator'' means 
        the Administrator of the agency primarily responsible 
        for administering this part.
          (2) Appropriate congressional committees.--The term 
        ``appropriate congressional committees'' means the 
        Committee on Foreign Relations of the Senate and the 
        Committee on International Relations of the House of 
        Representatives.
          (3) United states-supported microfinance 
        institution.--The term ``United States-supported 
        microfinance institution'' means a financial 
        intermediary that has received finds made available 
        under this Act for fiscal year 1980 or any subsequent 
        fiscal year.

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