I 

111TH CONGRESS 

1ST SESSION H. R. 1987 

To amend the Foreign Assistance Act of 1961 to provide funding for capacitybuilding to microfinance service providers. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 21, 2009 

Mr. BOOZMAN (for himself and Mr. MEEKS of New York) introduced the 

following bill; which was referred to the Committee on Foreign Affairs 

A BILL 

To amend the Foreign Assistance Act of 1961 to provide 

funding for capacity-building to microfinance service providers. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Microfinance Capacity5 Building Act of 2009’’. 

6 SEC. 2. FINDINGS AND DECLARATION OF POLICY. 

7 Congress finds and declares the following: 

8 (1) Microfinance is considered one of the great 

9 success stories of United States foreign aid because 

10 of its ability to reach the poor, especially women, 


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1 with programs that have a high impact and are 

2 highly sustainable. 

3 (2) Studies conducted in India, Kenya, and the 

4 Philippines found average annual returns on micro5 business investments ranging from 177 to 847 per6 cent, demonstrating the enormous capacity the poor 

7 have to work and save their way out of poverty. 

8 (3) An estimated 113,000,000 clients are cur9 rently being served with microcredit, and the Micro10 credit Summit Campaign has set a goal of reaching 

11 175,000,000 of the world’s poorest families by 2015. 

12 (4) The lack of human capital is widely recog13 nized as the single greatest constraint to the growth 

14 of leading microfinance networks and other practi15 tioners providing direct financial services to the 

16 poor. 

17 (5) According to some industry estimates, in 

18 order to meet the anticipated demand for micro19 finance, the industry will have to hire 1,600,000 new 

20 loan officers in Africa, Asia, Latin America, and the 

21 Near East, assuming a loan officer to client ratio of 

22 1 to 300. 

23 (6) Conservative estimates state that 

24 $2,000,000,000 in private investment capital is cur25 rently being leveraged for microfinance. SubstanVerDate Nov 24 2008 21:29 Apr 22, 2009 Jkt 079200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H1987.IH H1987

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1 tially more could be mobilized and invested in some 

2 of the world’s poorest countries but remains un3 tapped due to the lack of institutional capacity and 

4 qualified leaders. 

5 (7) The lack of human capacity is particularly 

6 severe in sub-Saharan Africa due to the relative im7 maturity of the microfinance industry, a small pool 

8 of trained and certified bankers and finance experts, 

9 and the prevalence of HIV/AIDS. 

10 SEC. 3. SENSE OF CONGRESS. 

11 It is the sense of Congress that the microfinance ca12 pacity-building activities supported by subsection (d) of 

13 section 252 of the Foreign Assistance Act of 1961 (22 

14 U.S.C. 2211a), as added by section 4 of this Act, is in15 tended to drive innovation and provide comprehensive so16 lutions that address the lack of human capital in devel17 oping countries, particularly in sub-Saharan Africa. Such 

18 activities should provide a regional and sub-regional ap19 proach to maximizing economies of scale and should focus 

20 predominately on educating and training African nationals 

21 in order to build capacity in the microfinance industry in 

22 developing countries, particularly in sub-Saharan African 

23 countries. 


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1 SEC. 4. CAPACITY-BUILDING FOR MICROFINANCE SERVICE 

2 PROVIDERS. 

3 (a) IN GENERAL.—Section 252 of the Foreign Assist4 ance Act of 1961 (22 U.S.C. 2211a) is amended by adding 

5 at the end the following: 

6 ‘‘(d) CAPACITY-BUILDING FOR MICROFINANCE SERV7 ICE PROVIDERS.— 

8 ‘‘(1) AUTHORIZATION.—In carrying out the 

9 programs authorized under subsection (a), the Ad10 ministrator shall establish a grant program to pro11 vide assistance on a non-reimbursable basis to pri12 vate, non-profit networks of microfinance institu13 tions that provide direct financial services, which 

14 may include credit of all types, savings, insurance, 

15 remittances and cash transfers, to the poor and very 

16 poor in developing countries. 

17 ‘‘(2) ACTIVITIES SUPPORTED.—Assistance pro18 vided under paragraph (1) shall, to the maximum 

19 extent practicable, be used to carry out traditional 

20 and nontraditional education and training for indi21 viduals working in the microfinance industry in de22 veloping countries, particularly in sub-Saharan Afri23 can countries. Such education and training may in24 clude curriculum development, distance learning, job 

25 shadowing, mentoring, training of trainers, scholar26 ships for undergraduate and graduate courses, and 


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1 purchasing and leasing equipment, including soft2 ware and other technology, to support activities— 

3 ‘‘(A) to improve the effectiveness of insti4 tutional governance structures and quality of 

5 senior management, including directors, chief 

6 executive officers, chief operating officers, chief 

7 financial officers, and other senior staff; 

8 ‘‘(B) to strengthen the knowledge and abil9 ity of senior and middle managers to establish 

10 and implement effective financial and non11 financial services, including the development 

12 and implementation of products and services, 

13 risk management, human resources, accounting, 

14 process analysis and auditing systems; 

15 ‘‘(C) to improve the technical knowledge 

16 and ability of microfinance employees, which 

17 may include branch managers, loan officer su18 pervisors, loan officers, tellers, insurance 

19 agents, and other field staff, regarding delivery 

20 of financial services to clients; 

21 ‘‘(D) to improve the collection and trans22 mission of training, procedures, and best prac23 tices among financial institutions and employ24 ees; and 


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1 ‘‘(E) to identify new staff and ensure the 

2 recruitment and retention of trained staff mem3 bers through the development of incentive pro4 grams and educational components. 

5 ‘‘(3) ELIGIBILITY.—To be eligible for assistance 

6 under paragraph (1), a network of microfinance in7 stitutions described in paragraph (1) shall— 

8 ‘‘(A) deliver direct financial services to the 

9 poor and very poor in at least five developing 

10 countries through a network of local micro11 finance institutions that are owned or formally 

12 affiliated and accredited by the network in ac13 cordance with its financial and social perform14 ance standards; 

15 ‘‘(B) operate as a private nonprofit organi16 zation; and 

17 ‘‘(C) agree to match, in cash contributions 

18 from non-Federal sources and on a 2 dollar-to19 1 dollar basis, the amount of the grant provided 

20 to the network under paragraph (1). 

21 ‘‘(4) CONSIDERATIONS.—In making a deter22 mination to provide assistance under paragraph (1), 

23 the Administrator shall ensure that participating 

24 networks of microfinance institutions include— 


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1 ‘‘(A) not less than 50 percent women in 

2 the activities supported under this subsection; 

3 and 

4 ‘‘(B) 100 percent individuals from devel5 oping countries in the activities supported 

6 under this subsection. 

7 ‘‘(5) PREFERENCE.—In making a determina8 tion to provide assistance under paragraph (1), the 

9 Administrator shall give preference to networks of 

10 microfinance institutions that promote the inclusion 

11 of women in senior management positions. 

12 ‘‘(6) REPORTING AND EVALUATION.—(A) The 

13 Administrator, acting through the Director, shall es14 tablish a reporting and evaluation system to assess 

15 the effectiveness of recipient microfinance institu16 tions in carrying out activities under paragraph (2). 

17 ‘‘(B) A recipient microfinance institution shall 

18 report on the number of (i) individuals educated and 

19 trained, (ii) certificates awarded, (iii) university 

20 credit units awarded, (iv) degrees awarded, and (v) 

21 education and training curriculum units created. 

22 ‘‘(C) Data reported by recipient microfinance 

23 institutions under clauses (i) through (iv) of sub24 paragraph (B) shall be disaggregated by sex, counVerDate Nov 24 2008 21:29 Apr 22, 2009 Jkt 079200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H1987.IH H1987

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1 try of origin, country of employment, and job title 

2 or position held. 

3 ‘‘(7) AUTHORIZATION OF APPROPRIATIONS.— 

4 ‘‘(A) IN GENERAL.—To carry out this sub5 section, there are authorized to be appro6 priated— 

7 ‘‘(i) $6,000,000 for fiscal year 2010; 

8 ‘‘(ii) $12,000,000 for fiscal year 2011; 

9 ‘‘(iii) $15,000,000 for fiscal year 

10 2012; 

11 ‘‘(iv) $12,000,000 for fiscal year 

12 2013; and 

13 ‘‘(v) $5,000,000 for fiscal year 2014. 

14 ‘‘(B) MINIMUM ALLOCATION.—Not less 

15 than 60 percent of the funds appropriated pur16 suant to the authorization of appropriations 

17 under subparagraph (A) for a fiscal year shall 

18 be used to support capacity-building activities 

19 in sub-Saharan Africa.’’. 

20 (b) CONFORMING AMENDMENT.—Such section is fur21 ther amended in the heading by adding at the end before 

22 the period the following: ‘‘; CAPACITY-BUILDING FOR

23 MICROFINANCE SERVICE PROVIDERS IN SUB-SAHA24 RAN AFRICA’’. 

Æ 


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