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[House Report 106-82]
[From the U.S. Government Publishing Office]

106th Congress                                                   Report
  1st Session           HOUSE OF REPRESENTATIVES                 106-82

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

 
             MICROENTERPRISE FOR SELF-RELIANCE ACT OF 1999

                                _______

 April 12, 1999.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

 Mr. Gilman, from the Committee on International Relations, submitted 
                             the following

                              R E P O R T

                        [To accompany H.R. 1143]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on International Relations, to whom was 
referred the bill (H.R. 1143) to establish a program to provide 
assistance for programs of credit and other financial services 
for microenterprises in developing countries, and for other 
purposes, having considered the same, report favorably thereon 
without amendment and recommend that the bill do pass.

                         Background and Purpose

    H.R. 1143, the Microenterprise for Self-Reliance Act of 
1999 was introduced on March 17, 1999, by Messrs. Gilman, 
Gejdenson, Houghton, Hall, and 21 other original cosponsors. 
The bill provides authorization of appropriations, guides 
microfinance policy, and establishes a new Microfinance Loan 
Facility.

                The Promise of Microenterprise Programs

    Despite the growth of the world's economy, billions of 
people in dozens of countries have incomes below one dollar per 
day. The international development community has a number of 
different ways to boost the incomes of poor people in 
developing countries including support for infrastructure 
projects, structural adjustments to the economy and free trade 
initiatives. Starting in the early 1980s, microenterprise 
development programs have become one of the most successful 
ways the international community has 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 bor-

rowers 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 their loans.
    Dr. Muhammad Yunus of Bangladesh developed this method of 
helping to end poverty in the early 1980s. He learned that 
while loans made to poor individuals carried the high risks 
traditionally associated with poverty lending, loans made by 
Yunus to support groups, especially very poor women, were 
repaid at rates of 95%-98%. This surprising innovation was the 
secret that made micro lending programs work. Based on this 
model, Dr. Yunus founded the Grameen bank in 1983. To date, the 
bank has lent over $2 billion and is now one of the largest 
financial institutions in Bangladesh.
    Using the Grameen Bank and other microfinance models, the 
international community has supported the start or expansion of 
dozens of microfinance institutions. The most sophisticated of 
these institutions, such as Bolivia's BancoSol, now have the 
financial strength to raise capital directly from Wall Street. 
Many other microfinance institutions are becoming the largest 
lenders in their respective countries. These institutions have 
shown that when properly administered, the poor are outstanding 
credit risks who will lift themselves out of poverty.

               U.S. Support for Microenterprise Programs

    The United States supports microenterprise development 
through multi- and bilateral programs. The multilateral program 
is coordinated by the World Bank's Consultative Group to Assist 
the Poorest (``CGAP''). As the number one donor to the 
International Financial Institutions and the United Nations 
development agencies, the U.S. can play a leading role in 
mobilizing resources from other countries to support 
microenterprise programs. CGAP now coordinates the activities 
of 27 multi- and bilateral donors.
    U.S. support for bilateral microenterprise programs is 
managed by the Agency for International Development (``AID''). 
AID defines a ``microenterprise'' as a firm with a total of 10 
or fewer employees. Funding for programs to support such firms 
averaged just over $100 million per year from FY 1990-1993. In 
1994, AID joined with Congress and microenterprise groups to 
launch the first Microenterprise Initiative. In the 1994 
Initiative, AID committed to:
          Maintain women and the poor as its primary emphasis, 
        particularly through support of poverty lending;
          Help implementing organizations to reach greater 
        numbers of people;
          Support institutional sustainability and financial 
        self-sufficiency among implementing organizations; and
          Seek improved partnerships with local organizations.
    During Fiscal Years 1994, 1995 and 1996, AID provided $137 
million, $133 million and $111 million respectively to support 
microenterprise projects.
    In February of 1997, RESULTS Educational Fund , a U.S. 
microcredit Non-Governmental Organization, called the first 
Microcredit Summit in Washington. The heads of state and 
agencies attending the summit called for ``the international 
community to reach 100 million of the world's poorest families, 
especially the women of those families, with credit for self-
employment and other financial and business services by the 
year 2005.'' In June of 1997, the Administration, the Congress, 
and the Microenterprise Coalition joined in a renewal of the 
Microenterprise Initiative. AID committed to a number of 
quantitative targets, including:
          At least half of all microenterprise clients of the 
        institutions that AID supported would be women.
          At least half of all the AID funds supporting 
        microfinance institutions would go to poverty lending.
          At least two-thirds of the clients of AID-supported 
        microfinance will receive loans of less than $300.
          The average repayment rates for microfinance 
        institutions receiving AID support will be 95% or 
        above.
          Every AID-supported microfinance organization will 
        have a plan to reach full financial sustainability in a 
        reasonable period of time.
    AID also committed to set a target of 15% per year growth 
in the number of clients receivingservices. AID reports that 
1.4 million poor clients had active loans with AID-supported 
institutions, up 47% from levels in 1996. The average annual number of 
clients served by AID is growing at a rate of 150% annually. AID also 
reports that 67% of these loans were ``poverty'' loans, i.e., loans at 
or below $300 for Africa, Latin America, the Caribbean and Asia and 
$1,000 for Europe and the Newly Independent States.
    During Fiscal Year (``FY'') 1997, AID spent $165 million to 
support microfinance programs. In 1997, AID supported 481 
microfinance activities in 62 countries with 70% of 
microfinance resources to support credit other than 
microfinance activities. Over one quarter of these institutions 
report that they are covering all of their financial and 
operational expenses. In FY 1998, funding dropped to $144 
million. Congress, through language to accompany the FY 1999 
appropriations conference report, directed that at least $135 
million be spent to support microfinance institutions during FY 
1999.

                            The Way Forward

    Since the founding of the Grameen Bank, microenterprise 
development activities have become a major part of the U.S. 
foreign assistance program. From the first years of founding 
microfinance institutions, AID and the Treasury Department 
(overseeing multilateral programs) must now respond to the 
transformation of microenterprise organizations into the medium 
and large financial providers they have the potential to 
become. As such, microfinance institutions need more than just 
donor capital. They need policy reform to remove outdated 
financial laws and regulations that work to prevent the 
delivery of microfinance services. In addition, the removal of 
interest rate restrictions and minimum funding requirements can 
greatly reduce the ability of such programs to work.
    The bill sets forth four major directions for the future of 
microenterprise programs: $152 million in FY 2000 and $167 
million in FY 2001 are authorized to be appropriated in grants 
with a requirement that half of all microenterprise resources 
shall be used for direct support of programs through 
practitioner institutions that provide credit and other 
financial services to the poorest with loans of $300 or less in 
1995 U.S. dollars. A monitoring program is also established to 
ensure that these programs are lifting the poorest of the poor 
from poverty. Two million are authorized to be appropriated in 
each of fiscal years 2000 and 2001 for the Micro- and Small 
Enterprise Development (``MSED'') program at AID. A new 
Microfinance Loan Facility is established to pool the risk and 
support U.S. funded microfinance institutions to recover from 
natural disasters, war, civil conflict or short-term financial 
movements that threaten their long-term development. This is a 
systemic response to previous crises involving microfinance 
institutions in South Asia and Central America that were nearly 
bankrupted by natural disasters killing or wounding many of 
their client borrowers.
    A new report by the President and in coordination with the 
Administrator of AID, Secretary of the Treasury and Secretary 
of State to review key innovations and institutions that would 
be necessary to ensure the further growth of the microfinance 
sector.

                            Committee Action

    H.R. 1143 was introduced by Chairman Gilman on March 17, 
1999, and was referred to the Committee on International 
Relations, which marked up the bill in open session, pursuant 
to notice, that same day. The Full Committee considered the 
bill and agreed to a motion to favorably report the bill to the 
House of Representatives, by voice vote. There were no 
amendments.

            Record Votes on Amendments and Motion to Report

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires that the results of each record vote 
on an amendment or motion to report, together with the names of 
those voting for or against, be printed in the committee 
report. No record votes were taken during the consideration of 
H.R. 1143.

                             Other Matters

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII of the Rules 
of the House of Representatives, the Committee reports the 
findings and recommendations of the Committee, based on 
oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

                Committee on Government Reform Findings

    Clause 3(c)(4) of rule XIII of the Rules of the House of 
Representatives requires each committee report to contain a 
summary of the oversight findings and recommendations made by 
the Government Reform Committee pursuant to clause 4(c)(2) of 
rule X of those Rules. The Committee on International Relations 
has received no such findings or recommendations from the 
Committee on Government Reform.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                Applicability to the Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) ofthe Congressional Accountability Act.

                   Constitutional Authority Statement

    In compliance with clause 3(d)(1) of rule XIII of the Rules 
of the House of Representatives, the Committee cites the 
following specific powers granted to the Congress in the 
Constitution as authority for enactment of H.R. 1143 as 
reported by the Committee: Article I, section 8, clause 1 
(relating to providing for the common defense and general 
welfare of the United States); Article I, section 8, clause 3 
(relating to the regulation of commerce with foreign nations); 
and Article I, section 8, clause 18 (relating to making all 
laws necessary and proper for carrying into execution powers 
vested by the Constitution in the government of the United 
States).

                        Preemption Clarification

    Section 423 of the Congressional Budget Act of 1974 
requires the report of any committee on a bill or joint 
resolution to include a committee statement on the extent to 
which the bill or joint resolution is intended to preempt state 
or local law. The Committee states that H.R. 1143 is not 
intended to preempt any state or local law.

New Budget Authority and Tax Expenditures, Congressional Budget Office 
             Cost Estimate, and Federal Mandates Statements

    Clause 3(c)(2) of rule XIII of the Rules of the House of 
Representatives requires each committee report that accompanies 
a measure providing new budget authority, new spending 
authority, or new credit authority or changing revenues or tax 
expenditures to contain a cost estimate, as required by section 
308(a)(1) of the Congressional Budget Act of 1974, as amended, 
and, when practicable with respect to estimates of new budget 
authority, a comparison of the estimated funding level for the 
relevant program (or programs) to the appropriate levels under 
current law.
    Clause 3(d) of rule XIII of the Rules of the House of 
Representatives requires committees to include their own cost 
estimates in certain committee reports, which include, when 
practicable, a comparison of the total estimated funding level 
for the relevant program (or programs) with the appropriate 
levels under current law.
    Clause 3(c)(3) of rule XIII of the Rules of the House of 
Representatives requires the report of any committee on a 
measure which has been approved by the Committee to include a 
cost estimate prepared by the Director of the Congressional 
Budget Office, pursuant to section 403 of the Congressional 
Budget Act of 1974, if the cost estimate is timely submitted.
    Section 423 of the Congressional Budget Act requires the 
report of any committee on a bill or joint resolution that 
includes any Federal mandate to include specific information 
about such mandates. The Committee states that H.R. 1143 does 
not include any Federal mandate.

               Congressional Budget Office Cost Estimate

    The Committee adopts the cost estimate of the Congressional 
Budget Office as its own submission of any new required 
information with respect to H.R. 1143 on new budget authority, 
new spending authority, new credit authority, or an increase or 
decrease in the national debt. It also adopts the estimate of 
Federal mandates prepared by the Director of the Congressional 
Budget Office pursuant to section 423 of the Unfunded Mandates 
Reform Act. The estimate and report which has been received is 
set out below.

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, March 24, 1999.
Hon. Benjamin A. Gilman,
Chairman, Committee on International Relations,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office (CBO) 
has prepared the enclosed cost estimate for H.R. 1143, the 
Microenterprise for Self-Reliance Act of 1999.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Joseph C. 
Whitehill.
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

H.R. 1143--Microenterprise for Self-Reliance Act of 1999

    Summary: H.R. 1143 would authorize grants and loans to 
capitalize institutions that would make very small loans to the 
poor in developing countries. It would also 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 
$291 million over the next five years. Because H.R. 1143 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 H.R. 1143 is shown in the following table. 
The costs of this legislation fall within budget function 150 
(international affairs).
    Basis of estimate: Under current law, the Administration 
provides grants and loans to small-scale financial institutions 
through several different programs. H.R. 1143 would authorize 
additional appropriations of $152 million in 2000 and $167 
million in 2001 for grants and $2 million in 2000 and 2001 for 
the administrative costs and credit subsidies for 
microenterprise programs. The estimate assumes that the 
authorized amounts would be appropriated for each year and that 
outlays would follow historical patterns for similar programs.

----------------------------------------------------------------------------------------------------------------
                                                              By fiscal year, in millions of dollars
                                                ----------------------------------------------------------------
                                                     2000         2001         2002         2003         2004
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION

Authorization level............................          159          174            0            0            0
Estimated outlays..............................           12           89          114           50           26
----------------------------------------------------------------------------------------------------------------

    H.R. 1143 would also create a loan facility to assist U.S.-
sponsored, microfinance institutions that face bankruptcy due 
to natural disaster, war, or severe national financial crisis. 
The bill would authorize up to $5 million annually for 
subsidized loans in 2000 and 2001. Funds for the facility would 
be in addition to the amounts specifically authorized by the 
bill. CBO estimates that the facility would spend $9 million 
over the next five years, assuming appropriation of the 
authorized amounts.
    Intergovernmental and private-sector impact: H.R. 1143 
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: Lesley Frymier.
    Estimate approved by: Robert A. Sunshine, Deputy Assistant 
Director for Budget Analysis.

                      Section-by-Section Analysis

Section 1. Short title

    This section provides the short title for the act will be 
the ``Microenterprise for Self-Reliance Act of 1999''.

Sec. 2. Findings and declarations of policy

    This section contains 18 findings updated from H.R. 1129 
(which the House passed during the 105th Congress) 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. 
While microenterprise development programs have become an 
important part of the U.S. foreign assistance program, the 
Committee believes that the success of these programs should 
bring their operations and expansion into the forefront of the 
U.S. assistance effort.
    The Committee also takes the commitments made by AID at the 
1994 and 1997 Microenterprise Initiatives very seriously and 
has used these commitments as the basis for working with the 
Administration. The Committee also has heard clear testimony 
and reviewed evidence that U.S. NGOs and indigenous 
nongovernmental organization intermediaries are the key 
partners our assistance programs require to provide credit, 
savings, training and technical services to microentrepreneurs.
    The Committee believes that one of the key requirements in 
this legislation is the requirement to increase the amount of 
assistance devoted to credit activities designed to reach the 
poorest sector in developing countries, and to improve the 
access of the poorest, particularly women, to microenterprise 
credit in developing countries. The Committee notes that in 
various countries throughout the world, the extension of credit 
to women has been one of the most successful aspects of 
microfinance programs. As microfinance institutions help to 
break down the barriers to credit for women, they unlock a vast 
potential for productivity long suppressed in many societies.
    The Committee believes that under the leadership of the 
President, AID, the Department of the Treasury and the 
Department of State should better coordinate policy to support 
the microfinance sector. The Committee notes and applauds the 
interest and involvement of the First Lady in supporting 
microfinance projects and urges the President to take a strong 
lead in coordinating key cabinet departments and agencies in 
promoting microfinance institutions. The Committee notes that 
in addition to funding, policy changes designed by AID and 
encouraged by the State and Treasury Departments are crucial to 
the future development of the microfinance sector.

Sec. 4. Microenterprise development grant assistance

    This section adds a new section to the Foreign Assistance 
Act of 1961 (as amended) (``FAA'') to authorize appropriations 
for grants and govern the use of all microenterprise resources.
    Subsection (a) includes findings that note 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; that it is therefore 
in the best interest of the United States to assist the 
development of microenterprises in developing countries; and 
the support of microenterprise can be served by programs 
providing credit, savings, training, and technical assistance. 
In the U.S. economy, small businesses fitting AID's definition 
of a microenterprise employ a significant portion, if not the 
majority, of Americans. By supporting the development of 
microenterprises, the Committee seeks to have foreign 
assistance programs help developing countries move away from 
basing their economies on large state-owned enterprises to the 
dynamic and innovative micro- and small business economy that 
has served the U.S. so well.
    Subsection (b)(1) authorizes the President to provide grant 
assistance for programs to increase the availability of credit 
and other services to microenterprises lacking full access to 
capital and training through four major approaches--(A) grants 
to microfinance institutions for the purpose of expanding the 
availability of credit, savings, and other financial services 
to microentrepreneurs; (B) training, technical assistance, and 
other support 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 microfinance 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 microfinance 
institutions that serve the poor and very poor.
    The Committee notes that last year Congress created a 
technical assistance program at the Department of the Treasury 
to help developing countries and countries in transition with 
monetary and regulatory affairs. The Committee strongly 
encourages the Treasury Department to include offers of 
assistance for policy reform and prudent regulation of the 
microfinance sector in its discussions with potential 
recipients of such aid. The Committee believes that analysis 
and elimination of policy barriers to microfinance and the 
proper regulation of such institutions will be key factors in 
the growth of the microfinance sector in the next decade.
    Subsection (b)(2) requires that the assistance authorized 
pass through organizations that have a capacity to develop and 
implement microenterprise programs, including particularly 
United States and indigenous private and voluntary 
organizations, United States and indigenous credit unions and 
cooperative organizations, other indigenous governmental and 
nongovernmental organizations; or business development 
services, including indigenous craft programs. The Committee 
notes the particular expertise of the members of the 
Microenterprise Coalition and its partners overseas in 
delivering this form of assistance.
    Subsection (b)(3) is in many ways one of the key provisions 
of this legislation. This section draws on a long heritage from 
the 1994 and 1997 Initiatives, the Microcredit Summit and the 
Administration-supported House-passed versions of H.R. 386 in 
the 104th Congress and H.R. 1129 in the 105th Congress. The 
subsection provides that in carrying out sustainable poverty-
focused programs referred to above, 50 percent of all 
microenterprise resources shall be used for direct support of 
programs under this subsection through practitioner 
institutions that provide credit and other financial services 
to the poorest with loans of $300 or less in 1995 United States 
dollars and can cover their costs of credit programs with 
revenue from lending activities or that demonstrate the 
capacity to do so in a reasonable time period.
    The Committee intends that the term ``poverty lending 
programs'' should refer to programs which directly support 
credit and other financial services for the poorest with loans 
of $300 or less in 1995 U.S. dollars. While the Committee is 
clearly and purposefully restrictive on its use of the $300 
average loan limit, it seeks to be expansive on what the 
Administration may use to count toward this ceiling. The 
Committee intends that the Administration may include all 
Development Assistance, Economic Support Fund (``ESF''), SEED 
Act and Freedom Support Act resources dedicated to supporting 
such programs. In addition, the Administration may also count 
P.L. 480, deobligate/reobligate, local currency and counterpart 
trust funds used to support such programs. The Administration 
may also reasonably and conservatively pro-rate the portion of 
training, technical assistance, capacity building, policy and 
regulatory support that went to poverty lending programs. For 
example, if the Administration were to support a K-REP effort 
to remove regulatory restrictions on the microfinance sector 
and K-REP used 50% of its resources to directly prove services 
and credit to poverty lending services, then the Administration 
would be able to count 50% of the funds spent to support 
towards the requirement in this section.
    Subsection (b)(4) provides that the President should 
continue support for central mechanisms and missions that 
provide technical support for field missions; strengthen the 
institutional development of the intermediary organizations 
described above, share information relating to the provision of 
assistance authorized above between such field missions and 
intermediary organizations; and support the development of 
nonprofit global microfinance networks, including credit union 
systems, that are able to deliver very small loans through a 
vast grassroots infrastructure based on market principles and 
act as wholesale intermediaries providing a range of services 
to microfinance retail institutions, including financing, 
technical assistance, capacity building and safety and 
soundness accreditation.
    Subsection (b)(5) provides that 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).
    Subsection (c) establishes a monitoring system to maximize 
the sustainable development impact of the assistance authorized 
under subsection (a)(1). It directs AID's Administrator 
toestablish a monitoring system that will accomplish four basic tasks. 
First, under this bill as under the current law of the Government 
Performance and Review Act (``GPRA'' or the ``Results Act''), AID must 
establish performance goals for such assistance and expresses such 
goals in an objective and quantifiable form, to the extent feasible. 
The Committee has been concerned in the past that AID has been unable 
to measure its support for poverty-lending programs. Under this 
section, the Committee is clearly directing AID to measure the impact 
of such programs, especially on lifting the very poorest from poverty. 
This subsection also establishes performance indicators to be used in 
measuring or assessing the achievement of the goals and objectives of 
such assistance. The Committee believes that one of the key measures 
will be loans made and repaid in amounts of $300 or less in 1995 
dollars. Next, the subsection requires AID to provide 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. 
Finally, the subsection contemplates reforms and room for improving 
measurement systems by directing AID to report periodically on 
adjustments to measures for reaching the poorest of the poor, including 
proposed legislation containing amendments to improve paragraph (3). 
While the Committee is very interested in any new and more effective 
changes that can be made to measure the impact of these programs on the 
poorest of the poor, the Committee directs that AID should focus its 
initial reporting resources on measuring its support for poverty 
lending programs.
    Subsection (d) authorizes $152,000,000 for fiscal year 2000 
and $167,000,000 for fiscal year 2001 to carry out this 
section. Originally, the Committee considered higher funding 
sums for these highly successful programs but chose these 
funding levels as realistic, achievable and amply justified by 
the demonstrated success of microenterprise programs.

Sec. 5. Micro- and small enterprise development credits

    Section 5 rewrites section 108 of the FAA to directly 
authorize AID's current Micro- and small Enterprise Development 
(``MSED'') program. Section 108 had become outdated and was no 
longer utilized by AID. This section sets into permanent law 
the current guidance and policy regarding assistance for micro- 
and slightly larger small enterprises.
    Subsection (a) contains findings and policies that are 
self-explanatory. Subsection (b) authorizes the President to 
carry out the policy set forth in subsection (a), through three 
delivery mechanisms: (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.
    Subsection (c) requires the Administrator of AID to 
establish criteria for determining which entities described in 
the subsection above are eligible to carry out activities, with 
respect to micro- and small enterprises, assisted under this 
section. There are five criteria: (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 to the 
poor, and (5) the extent to which the entity implements a plan 
to become financially sustainable.
    Subsection (d) limits this assistance 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).
    Subsection (e) authorizes the currently appropriated levels 
of $1,500,000 for each of the fiscal years 2000 and 2001 to 
carry out this section. Under Credit Reform, these amounts 
authorized to be appropriated will be made available for the 
subsidy cost, as defined in section 502(5) of the Federal 
Credit Reform Act of 1990. In addition $500,000 is authorized 
to be appropriated for each of the fiscal years 2000 and 2001 
for the cost of administrative expenses in carrying out this 
section.

Sec. 6. Microfinance Loan Facility

    This section establishes a new 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 
United States-supported microfinance institutions. For some 
time, the Committee has been concerned about the security of 
microfinance institutions and their ability to continue 
operations in the face of large natural catastrophes or man-
made disasters. Recently, AID has rescued several microfinance 
institutions in the Subcontinent or Latin America who were 
threatened with bankruptcy caused by natural disasters. In 
short, it is hard to run a bank whose clients are dead or 
displaced by a calamity. The Committee commends AID on these ad 
hoc rescue packages but seeks a more systemic approach to the 
security of microfinance institutions already supported by the 
U.S. taxpayer. With a more systemic approach to the security of 
microfinance institutions responding to calamity, the past work 
of AID and the support of the taxpayer will be protected. In 
addition, once microfinance institutions can be restored after 
a calamity, then these institutions can play a key role in 
recovery efforts.
    Subsection (a) establishes such a 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. Subsection (b) establishes 
a supervisory board of the facility composed of the following 
representatives appointed by the President not later than 180 
days after the date of the enactment: (A) 1 representative from 
the Department of the Treasury, (B) 1 representative from the 
Department of State, (C) 1 representative from the Agency for 
International Development, (D) 2 United States citizens from 
United States nongovernmental organizations that operate United 
States-sponsored microfinance activities.
    The Committee believes that these two last appointees 
should be appointed from the largest andmost experienced U.S. 
microfinance institutions. They will also serve for terms of 2 years.
    The AID Administrator will serve as Chairman of the board 
with an additional vote. The Committee understands that the 
board will largely represent members of the Administration with 
only two out of the six members from outside organizations.
    Subsection (c) provides that the board may make 
disbursements from the Facility to United States-sponsored 
microfinance institutions to prevent the bankruptcy of such 
institutions caused by (A) natural disasters, (B) national wars 
or civil conflict, and (C) national financial crisis or other 
short term financial movements that threaten the long-term 
development of United States-supported microfinance 
institutions.
    Such disbursements shall be made as concessional loans that 
are repaid maintaining the real value of the loan to 
microfinance institutions that demonstrate the capacity to 
resume self-sustained operations within a reasonable time 
period. The Facility shall provide for loan losses with each 
loan disbursed. The Committee understands that the best way to 
rescue a microfinance institution is to lend it money, not to 
loan it. Nevertheless, the structure of the Facility does not 
provide for the full cost recovery of its operations and that 
it may need to be replenished from time to time.
    In order to closely supervise the operation of the Facility 
in its first years, 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 availability has been 
provided to the congressional committees specified in section 
634A of this Act in accordance with the procedures applicable 
to reprogramming notifications under that section.
    Subsection (d) also requires a report not later than 60 
days after the date on which the last representative to the 
board is appointed pursuant to subsection (b), the chairman of 
the board shall prepare and submit to the appropriate 
congressional committees a report on the policies, rules, and 
regulations of the Facility.
    Subsection (e) contains placeholder language describing the 
general thrust and direction of the Committee regarding the 
funding sources of the Facility. The Committee understands that 
the Chairman and Ranking Minority Member will offer final 
language on the funding for this Facility that is acceptable to 
the Administration when this bill is considered on the House.

Sec. 7. Report relating to future development of microfinance 
        institutions

    This section is intended to lay a foundation for the future 
development of the microfinance sector. Subsection (a) requires 
the President, in consultation with the AID Administrator, the 
Secretary of State, and the Secretary of the Treasury, to 
prepare and transmit to the appropriate congressional 
committees a report on the most cost-effective methods for 
increasing the access ofpoor people to credit, other financial 
services, and related training.
     Subsection (b) provides that the contents of the report 
shall contain: First, how the President will jointly develop a 
comprehensive strategy for advancing the global microenterprise 
sector in a way that maintains market principles while assuring 
that the very poor, particularly women, obtain access to 
financial services. The Committee is concerned that as the 
microfinance sector grows, the Administration should develop a 
comprehensive strategy to foster the enabling environment and 
funding for such institutions.
    Second, the subsection requires guidelines and 
recommendations for--
          (A) Instruments to assist microenterprise networks to 
        develop multi-country and regional microlending 
        programs. The Committee believes that networks can be 
        the key to the development of this sector in the next 
        decade.
          (B) Technical assistance to foreign governments, 
        foreign central banks and regulatory entities to 
        improve the policy environment for microfinance 
        institutions, and to strengthen the capacity of 
        supervisory bodies to supervise microcredit 
        institutions. Having authorized the start of the 
        Treasury Technical Assistance Program, the Committee 
        encourages the Treasury Department to include 
        assistance for the regulation and development of the 
        microfinance sector in its review of possible 
        assistance that can be offered under this program.
          (C) The potential for federal chartering of United 
        States-based international microfinance network 
        institutions, including proposed legislation. The 
        Committee would like to review the advantages Fannie 
        Mae had in the use of its federal charter and the 
        potential such an arrangement might have for the 
        development of the microfinance sector.
          (D) Instruments to increase investor confidence in 
        microcredit institutions which would strengthen the 
        long-term financial position of the microcredit 
        institutions and attract capital from private sector 
        entities and individuals, such as a rating system for 
        microcredit institutions and local credit bureaus. The 
        Committee was impressed with the achievement of 
        Bolivia's BancoSol and its development of independent 
        access to private capital markets.
          (E) An agenda for integrating microfinance into 
        United States foreign policy initiatives seeking to 
        develop and strengthen the global finance sector. The 
        Committee believes that under GPRA, the development of 
        microfinance institutions should become a key part of 
        the State Department and AID performance plans.
          (F) Innovative instruments to attract funds from the 
        capital markets, such as instruments for leveraging 
        funds from the local commercial banking sector, and the 
        securitization of microloan portfolios.

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). The section also 
calls on the Secretary of the Treasury to instruct each United 
States Executive Director of the Multilateral Development Banks 
(MDBs) to advocate the development of a coherent and 
coordinated strategy to support the microenterprise sector and 
an increase of multilateral resource flows for the purposes of 
building microenterprise retail and wholesale intermediaries.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, 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

           *       *       *       *       *       *       *

                                 PART I

Chapter 1--Policy; Development Assistance Authorizations 

           *       *       *       *       *       *       *

  [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.--The 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 to the poor.
          (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) Authorization of Appropriations.--
          (1) In general.--(A) There are authorized to be 
        appropriated $1,500,000 for each of the fiscal years 
        2000 and 2001 to carry out this section.
          (B) Amounts authorized to be appropriated under 
        subparagraph (A) shall be made available for the 
        subsidy cost, as defined in section 502(5) of the 
        Federal Credit Reform Act of 1990, for activities under 
        this section.
          (2) Administrative expenses.--There are authorized to 
        be appropriated $500,000 for each of the fiscal years 
        2000 and 2001 for the cost of administrative expenses 
        in carrying out this section.
          (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. [129.] 130. ASSISTANCE FOR VICTIMS OF TORTURE.

  (a) In General.--The President is authorized to provide 
assistance for the rehabilitation of victims of torture.
  (b) Eligibility for Grants.--Such assistance shall be 
provided in the form of grants to treatment centers and 
programs in foreign countries that are carrying out projects or 
activities specifically designed to treat victims of torture 
for the physical and psychological effects of the torture.
  (c) Use of Funds.--Such assistance shall be available--
          (1) for direct services to victims of torture; and
          (2) to provide research and training to health care 
        providers outside of treatment centers or programs 
        described in subsection (b), for the purpose of 
        enabling such providers to provide the services 
        described in paragraph (1).

SEC. 131. MICROENTERPRISE DEVELOPMENT GRANT ASSISTANCE.

  (a) Findings and Policy.--The 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, and 
        technical assistance.
  (b) Authorization.--(1) 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 and 
training through--
          (A) grants to microfinance institutions for the 
        purpose of expanding the availability of credit, 
        savings, and other financial services to 
        microentrepreneurs;
          (B) training, technical assistance, and other support 
        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 microfinance 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 microfinance 
        institutions that serve the poor and very poor.
  (2) 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;
          (C) other indigenous governmental and nongovernmental 
        organizations; or
          (D) business development services, including 
        indigenous craft programs.
  (3) In carrying out sustainable poverty-focused programs 
under paragraph (1), 50 percent of all microenterprise 
resources shall be used for direct support of programs under 
this subsection through practitioner institutions that provide 
credit and other financial services to the poorest with loans 
of $300 or less in 1995 United States dollars and can cover 
their costs of credit programs with revenue from lending 
activities or that demonstrate the capacity to do so in a 
reasonable time period.
  (4) 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) 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).
  (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) Authorization of Appropriations.--
          (1) In general.--(A) There are authorized to be 
        appropriated $152,000,000 for fiscal year 2000 and 
        $167,000,000 for fiscal year 2001 to carry out this 
        section.
          (B) Amounts appropriated pursuant to the 
        authorization of appropriations under subparagraph (A) 
        are authorized to remain available until expended.
          (2) Rule of construction.--Amounts authorized to be 
        appropriated under paragraph (1) are in addition to 
        amounts otherwise available to carry out this section.

SEC. 132. UNITED STATES MICROFINANCE LOAN FACILITY.

  (a) Establishment.--The Administrator of the United States 
Agency for International Development is authorized to establish 
a United States Microfinance Loan Facility (hereinafter 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) Supervisory Board of the Facility.--(1) The Facility 
shall be supervised by a board composed of the following 
representatives appointed by the President not later than 180 
days after the date of the enactment of Microenterprise for 
Self-Reliance Act of 1999:
          (A) 1 representative from the Department of the 
        Treasury.
          (B) 1 representative from the Department of State.
          (C) 1 representative from the United States Agency 
        for International Development.
          (D)(i) 2 United States citizens from United States 
        nongovernmental organizations that operate United 
        States-sponsored microfinance activities.
          (ii) Individuals described in clause (i) shall be 
        appointed for a term of 2 years.
  (2) The Administrator of the United States Agency for 
International Development or his designee shall serve as 
Chairman and an additional voting member of the board.
  (c) Disbursements.--(1) The board shall make disbursements 
from the Facility to United States-sponsored microfinance 
institutions to prevent the bankruptcy of such institutions 
caused by (A) natural disasters, (B) national wars or civil 
conflict, and (C) national financial crisis or other short term 
financial movements that threaten the long-term development of 
United States-supported microfinance institutions. Such 
disbursements shall be made as concessional loans that are 
repaid maintaining the real value of the loan to microfinance 
institutions that demonstrate the capacity to resume self-
sustained operations within a reasonable time period. The 
Facility shall provide for loan losses with each loan 
disbursed.
  (2) 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 availability has been provided to the 
congressional committees specified in section 634A of this Act 
in accordance with the procedures applicable to reprogramming 
notifications under that section.
  (d) Report.--Not later than 60 days after the date on which 
the last representative to the board is appointed pursuant to 
subsection (b), the chairman of the board shall prepare and 
submit to the appropriate congressional committees a report on 
the policies, rules, and regulations of the Facility.
  (e) Funding.--(1) Not more than $5,000,000 of amounts made 
available to carry out sections 103 through 106 of this Act for 
each of the fiscal years 2000 and 2001 may be made available to 
carry out this section for each such fiscal year.
  (2) Amounts made available under paragraph (1) are in 
addition to amounts available under other provisions of law to 
carry out this section.
  (f) Definitions.--In this section:
          (1) Appropriate congressional committees.--The term 
        ``appropriate congressional committees'' means the 
        Committee on International Relations of the House of 
        Representatives and the Committee on Foreign Relations 
        of the Senate.
          (2) United states-supported microfinance 
        institution.--The term ``United States-supported 
        microfinance institution'' means a financial 
        intermediary that has received funds made available 
        under this Act for fiscal year 1980 and each subsequent 
        fiscal year.

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