II

Calendar No. 670

106TH CONGRESS

2D SESSION S. 2844

[Report No. 106–335]

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.

IN THE SENATE OF THE UNITED STATES

JULY 11, 2000

Mr. HELMS, from the Committee on Foreign Relations, reported the following

original bill; which was read twice and placed on the calendar

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.

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 ‘‘Microenterprise for

5 Self-Reliance Act of 2000’’.
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1 SEC. 2. FINDINGS AND DECLARATIONS OF POLICY.

2 Congress makes the following findings and declara3 tions:

4 (1) According to the World Bank, more than

5 1,200,000,000 people in the developing world, or

6 one-fifth of the world’s population, subsist on less

7 than $1 a day.

8 (2) Over 32,000 of their children die each day

9 from largely preventable malnutrition and disease.

10 (3)(A) Women in poverty generally have larger

11 work loads and less access to educational and eco12 nomic opportunities than their male counterparts.

13 (B) Directly aiding the poorest of the poor, es14 pecially women, in the developing world has a posi15 tive effect not only on family incomes, but also on

16 child nutrition, health and education, as women in

17 particular reinvest income in their families.

18 (4)(A) The poor in the developing world, par19 ticularly women, generally lack stable employment

20 and social safety nets.

21 (B) Many turn to self-employment to generate

22 a substantial portion of their livelihood. In Africa,

23 over 80 percent of employment is generated in the

24 informal sector of the self-employed poor.

25 (C) These poor entrepreneurs are often trapped

26 in poverty because they cannot obtain credit at rea-
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1 sonable rates to build their asset base or expand

2 their otherwise viable self-employment activities.

3 (D) Many of the poor are forced to pay interest

4 rates as high as 10 percent per day to money lend5 ers.

6 (5)(A) The poor are able to expand their in7 comes and their businesses dramatically when they

8 can access loans at reasonable interest rates.

9 (B) Through the development of self-sustaining

10 microfinance programs, poor people themselves can

11 lead the fight against hunger and poverty.

12 (6)(A) On February 2–4, 1997, a global Micro13 credit Summit was held in Washington, District of

14 Columbia, to launch a plan to expand access to cred15 it for self-employment and other financial and busi16 ness services to 100,000,000 of the world’s poorest

17 families, especially the women of those families, by

18 2005. While this scale of outreach may not be

19 achievable in this short time-period, the realization

20 of this goal could dramatically alter the face of glob21 al poverty.

22 (B) With an average family size of five, achiev23 ing this goal will mean that the benefits of micro24 finance will thereby reach nearly half of the world’s

25 more than 1,000,000,000 absolute poor people.
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1 (7)(A) Nongovernmental organizations, such as

2 those that comprise the Microenterprise Coalition

3 (such as the Grameen Bank (Bangladesh,) K–REP

4 (Kenya), and networks such as Accion International,

5 the Foundation for International Community Assist6 ance (FINCA), and the credit union movement) are

7 successful in lending directly to the very poor.

8 (B) Microfinance institutions such as BRAC

9 (Bangladesh), BancoSol (Bolivia), SEWA Bank

10 (India), and ACEP (Senegal) are regulated financial

11 institutions that can raise funds directly from the

12 local and international capital markets.

13 (8)(A) Microenterprise institutions not only re14 duce poverty, but also reduce the dependency on for15 eign assistance.

16 (B) Interest income on the credit portfolio is

17 used to pay recurring institutional costs, assuring

18 the long-term sustainability of development assist19 ance.

20 (9) Microfinance institutions leverage foreign

21 assistance resources because loans are recycled, gen22 erating new benefits to program participants.

23 (10)(A) The development of sustainable micro24 finance institutions that provide credit and training,

25 and mobilize domestic savings, is a critical compo-
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1 nent to a global strategy of poverty reduction and

2 broad-based economic development.

3 (B) In the efforts of the United States to lead

4 the development of a new global financial architec5 ture, microenterprise should play a vital role. The

6 recent shocks to international financial markets

7 demonstrate how the financial sector can shape the

8 destiny of nations. Microfinance can serve as a pow9 erful tool for building a more inclusive financial sec10 tor which serves the broad majority of the world’s

11 population including the very poor and women and

12 thus generate more social stability and prosperity.

13 (C) Over the last two decades, the United

14 States has been a global leader in promoting the

15 global microenterprise sector, primarily through its

16 development assistance programs at the United

17 States Agency for International Development. Addi18 tionally, the United States Department of the Treas19 ury and the Department of State have used their au20 thority to promote microenterprise in the develop21 ment programs of international financial institutions

22 and the United Nations.

23 (11)(A) In 1994, the United States Agency for

24 International Development launched the ‘‘Micro-
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1 enterprise Initiative’’ in partnership with the Con2 gress.

3 (B) The initiative committed to expanding

4 funding for the microenterprise programs of the

5 Agency, and set a goal that, by the end of fiscal year

6 1996, one-half of all microenterprise resources would

7 support programs and institutions that provide cred8 it to the poorest, with loans under $300.

9 (C) In order to achieve the goal of the micro10 credit summit, increased investment in microfinance

11 institutions serving the poorest will be critical.

12 (12) Providing the United States share of the

13 global investment needed to achieve the goal of the

14 microcredit summit will require only a small increase

15 in United States funding for international micro16 credit programs, with an increased focus on institu17 tions serving the poorest.

18 (13)(A) In order to reach tens of millions of the

19 poorest with microcredit, it is crucial to expand and

20 replicate successful microfinance institutions.

21 (B) These institutions need assistance in devel22 oping their institutional capacity to expand their

23 services and tap commercial sources of capital.

24 (14) Nongovernmental organizations have dem25 onstrated competence in developing networks of local
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1 microfinance institutions and other assistance deliv2 ery mechanisms so that they reach large numbers of

3 the very poor, and achieve financial sustainability.

4 (15) Recognizing that the United States Agency

5 for International Development has developed very ef6 fective partnerships with nongovernmental organiza7 tions, and that the Agency will have fewer missions

8 overseas to carry out its work, the Agency should

9 place priority on investing in those nongovernmental

10 network institutions that meet performance criteria

11 through the central funding mechanisms of the

12 Agency.

13 (16) By expanding and replicating successful

14 microfinance institutions, it should be possible to

15 create a global infrastructure to provide financial

16 services to the world’s poorest families.

17 (17)(A) The United States can provide leader18 ship to other bilateral and multilateral development

19 agencies as such agencies expand their support to

20 the microenterprise sector.

21 (B) The United States should seek to improve

22 coordination among G–7 countries in the support of

23 the microenterprise sector in order to leverage the

24 investment of the United States with that of other

25 donor nations.
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1 (18) Through increased support for microenter2 prise, especially credit for the poorest, the United

3 States can continue to play a leadership role in the

4 global effort to expand financial services and oppor5 tunity to 100,000,000 of the poorest families on the

6 planet.

7 SEC. 3. PURPOSES.

8 The purposes of this Act are—

9 (1) to make microenterprise development an im10 portant element of United States foreign economic

11 policy and assistance;

12 (2) to provide for the continuation and expan13 sion of the commitment of the United States Agency

14 for International Development to the development of

15 microenterprise institutions as outlined in its 1994

16 Microenterprise Initiative;

17 (3) to support and develop the capacity of

18 United States and indigenous nongovernmental or19 ganization intermediaries to provide credit, savings,

20 training, technical assistance, and business develop21 ment services to microentrepreneurs;

22 (4) to emphasize financial services and substan23 tially increase the amount of assistance devoted to

24 both financial services and complimentary business

25 development services designed to reach the poorest
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1 sector in developing countries, particularly women;

2 and

3 (5) to encourage the United States Agency for

4 International Development to coordinate micro5 finance policy, in consultation with the Department

6 of the Treasury and the Department of State, and

7 to provide global leadership among bilateral and

8 multilateral donors in promoting microenterprise for

9 the poorest of the poor.

10 SEC. 4. MICROENTERPRISE DEVELOPMENT GRANT ASSIST11 ANCE.

12 Chapter 1 of part I of the Foreign Assistance Act

13 of 1961 (22 U.S.C. 2151 et seq.) is amended by adding

14 at the end the following new section:

15 ‘‘SEC. 131. MICROENTERPRISE DEVELOPMENT GRANT AS16 SISTANCE.

17 ‘‘(a) FINDINGS AND POLICY.—Congress finds and de18 clares that—

19 ‘‘(1) the development of microenterprise is a

20 vital factor in the stable growth of developing coun21 tries and in the development of free, open, and equi22 table international economic systems;

23 ‘‘(2) it is therefore in the best interest of the

24 United States to assist the development of micro25 enterprises in developing countries; and
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1 ‘‘(3) the support of microenterprise can be

2 served by programs providing credit, savings, train3 ing, technical assistance, and business development

4 services.

5 ‘‘(b) AUTHORIZATION.—

6 ‘‘(1) IN GENERAL.—In carrying out this part,

7 the President is authorized to provide grant assist8 ance for programs to increase the availability of

9 credit and other services to microenterprises lacking

10 full access to capital training, technical assistance,

11 and business development services through—

12 ‘‘(A) grants to microfinance institutions

13 for the purpose of expanding the availability of

14 credit, savings, and other financial services to

15 microentrepreneurs;

16 ‘‘(B) grants to microenterprise institutions

17 for the purpose of training, technical assistance,

18 and business development services for micro19 enterprises to enable them to make better use

20 of credit, to better manage their enterprises,

21 and to increase their income and build their as22 sets;

23 ‘‘(C) capacity-building for microenterprise

24 institutions in order to enable them to better
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1 meet the credit and training needs of micro2 entrepreneurs; and

3 ‘‘(D) policy and regulatory programs at

4 the country level that improve the environment

5 for microentrepreneurs and microenterprise in6 stitutions that serve the poor and very poor.

7 ‘‘(2) IMPLEMENTATION.—Assistance authorized

8 under paragraph (1) shall be provided through orga9 nizations that have a capacity to develop and imple10 ment microenterprise programs, including

11 particularly—

12 ‘‘(A) United States and indigenous private

13 and voluntary organizations;

14 ‘‘(B) United States and indigenous credit

15 unions and cooperative organizations; or

16 ‘‘(C) other indigenous governmental and

17 nongovernmental organizations.

18 ‘‘(3) TARGETED ASSISTANCE.—In carrying out

19 sustainable poverty-focused programs under para20 graph (1), 50 percent of all microenterprise re21 sources shall be targeted to very poor entrepreneurs,

22 defined as those living in the bottom 50 percent

23 below the poverty line as established by the national

24 government of the country. Specifically, such re25 sources shall be used for—
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1 ‘‘(A) direct support of programs under this

2 subsection through practitioner institutions

3 that—

4 ‘‘(i) provide credit and other financial

5 services to entrepreneurs who are very

6 poor, with loans in 1995 United States

7 dollars of—

8 ‘‘(I) $1,000 or less in the Europe

9 and Eurasia region;

10 ‘‘(II) $400 or less in the Latin

11 America region; and

12 ‘‘(III) $300 or less in the rest of

13 the world; and

14 ‘‘(ii) can cover their costs in a reason15 able time period; or

16 ‘‘(B) demand-driven business development

17 programs that achieve reasonable cost recovery

18 that are provided to clients holding poverty

19 loans (as defined by the regional poverty loan

20 limitations in subparagraph (A)(i)) whether

21 they are provided by microfinance institutions

22 or by specialized business development services

23 providers.
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1 ‘‘(4) SUPPORT FOR CENTRAL MECHANISMS.—

2 The President should continue support for central

3 mechanisms and missions that—

4 ‘‘(A) provide technical support for field

5 missions;

6 ‘‘(B) strengthen the institutional develop7 ment of the intermediary organizations de8 scribed in paragraph (2);

9 ‘‘(C) share information relating to the pro10 vision of assistance authorized under paragraph

11 (1) between such field missions and inter12 mediary organizations; and

13 ‘‘(D) support the development of nonprofit

14 global microfinance networks, including credit

15 union systems, that—

16 ‘‘(i) are able to deliver very small

17 loans through a vast grassroots infrastruc18 ture based on market principles; and

19 ‘‘(ii) act as wholesale intermediaries

20 providing a range of services to micro21 finance retail institutions, including financ22 ing, technical assistance, capacity-building

23 and safety and soundness accreditation.

24 ‘‘(5) LIMITATION.—Assistance provided under

25 this subsection may only be used to support micro-
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1 enterprise programs and may not be used to support

2 programs not directly related to the purposes de3 scribed in paragraph (1).

4 ‘‘(6) DEFINITION.—In this subsection, the term

5 ‘business development services’ means support for

6 the growth of microenterprises through training,

7 technical assistance, marketing assistance, improved

8 production technologies, and other services.

9 ‘‘(c) MONITORING SYSTEM.—In order to maximize

10 the sustainable development impact of the assistance au11 thorized under subsection (a)(1), the Administrator of the

12 agency primarily responsible for administering this part

13 shall establish a monitoring system that—

14 ‘‘(1) establishes performance goals for such as15 sistance and expresses such goals in an objective and

16 quantifiable form, to the extent feasible;

17 ‘‘(2) establishes performance indicators to be

18 used in measuring or assessing the achievement of

19 the goals and objectives of such assistance;

20 ‘‘(3) provides a basis for recommendations for

21 adjustments to such assistance to enhance the sus22 tainable development impact of such assistance, par23 ticularly the impact of such assistance on the very

24 poor, particularly poor women; and
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1 ‘‘(4) provides a basis for recommendations for

2 adjustments to measures for reaching the poorest of

3 the poor, including proposed legislation containing

4 amendments to enhance the sustainable development

5 impact of such assistance, as described in paragraph

6 (3).

7 ‘‘(d) LEVEL OF ASSISTANCE.—Of the funds made

8 available under this part and the Support for East Euro9 pean Democracy (SEED) Act of 1989, including local cur10 rencies, there are authorized to be available $150,000,000

11 during fiscal year 2001.’’.

12 SEC. 5. MICRO- AND SMALL ENTERPRISE DEVELOPMENT

13 CREDITS.

14 Section 108 of the Foreign Assistance Act of 1961

15 (22 U.S.C. 2151f) is amended to read as follows:

16 ‘‘SEC. 108. MICRO- AND SMALL ENTERPRISE DEVELOPMENT

17 CREDITS.

18 ‘‘(a) FINDINGS AND POLICY.—Congress finds and de19 clares that—

20 ‘‘(1) the development of micro- and small enter21 prises are a vital factor in the stable growth of de22 veloping countries and in the development and sta23 bility of a free, open, and equitable international

24 economic system; and
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1 ‘‘(2) it is, therefore, in the best interests of the

2 United States to assist the development of the enter3 prises of the poor in developing countries and to en4 gage the United States private sector in that proc5 ess.

6 ‘‘(b) PROGRAM.—To carry out the policy set forth in

7 subsection (a), the President is authorized to provide as8 sistance to increase the availability of credit to micro- and

9 small enterprises lacking full access to credit, including

10 through—

11 ‘‘(1) loans and guarantees to credit institutions

12 for the purpose of expanding the availability of cred13 it to micro- and small enterprises;

14 ‘‘(2) training programs for lenders in order to

15 enable them to better meet the credit needs of

16 microentrepreneurs; and

17 ‘‘(3) training programs for microentrepreneurs

18 in order to enable them to make better use of credit

19 and to better manage their enterprises.

20 ‘‘(c) ELIGIBILITY CRITERIA.—The Administrator of

21 the agency primarily responsible for administering this

22 part shall establish criteria for determining which entities

23 described in subsection (b) are eligible to carry out activi24 ties, with respect to micro- and small enterprises, assisted

25 under this section. Such criteria may include the following:
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1 ‘‘(1) The extent to which the recipients of credit

2 from the entity do not have access to the local for3 mal financial sector.

4 ‘‘(2) The extent to which the recipients of credit

5 from the entity are among the poorest people in the

6 country.

7 ‘‘(3) The extent to which the entity is oriented

8 toward working directly with poor women.

9 ‘‘(4) The extent to which the entity recovers its

10 cost of lending.

11 ‘‘(5) The extent to which the entity implements

12 a plan to become financially sustainable.

13 ‘‘(d) ADDITIONAL REQUIREMENT.—Assistance pro14 vided under this section may only be used to support

15 micro- and small enterprise programs and may not be used

16 to support programs not directly related to the purposes

17 described in subsection (b).

18 ‘‘(e) AUTHORIZED USES OF FUNDS.—

19 ‘‘(1) IN GENERAL.—Amounts made available to

20 carry out this section may be used for, among other

21 things—

22 ‘‘(A) the subsidy cost, as defined in section

23 502(5) of the Federal Credit Reform Act of

24 1990, for activities under this section; and
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1 ‘‘(B) the cost of administration expenses in

2 carrying out credit activities under this section.

3 ‘‘(2) DEFAULT AND PROCUREMENT PROVI4 SIONS.—

5 ‘‘(A) DEFAULT PROVISION.—The provi6 sions of section 620(q), or any comparable pro7 vision of law, shall not be construed to prohibit

8 assistance to a country in the event that a pri9 vate sector recipient of assistance furnished

10 under this section is in default in its payment

11 to the United States for the period specified in

12 such section.

13 ‘‘(B) PROCUREMENT PROVISION.—Assist14 ance may be provided under this section with15 out regard to section 604(a).

16 ‘‘(3) RULE OF CONSTRUCTION.—Amounts au17 thorized to be appropriated under this subsection are

18 in addition to amounts otherwise available to carry

19 out this section.’’.

20 SEC. 6. MICROFINANCE LOAN FACILITY.

21 (a) IN GENERAL.—Chapter 1 of part I of the Foreign

22 Assistance Act of 1961 (22 U.S.C. 2151 et seq.), as

23 amended by section 4 of this Act, is further amended by

24 adding at the end the following new section:
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1 ‘‘SEC. 132. UNITED STATES MICROFINANCE LOAN FACILITY.

2 ‘‘(a) ESTABLISHMENT.—The Administrator is au3 thorized to establish a United States Microfinance Loan

4 Facility (in this section referred to as the ‘Facility’) to

5 pool and manage the risk from natural disasters, war or

6 civil conflict, national financial crisis, or short-term finan7 cial movements that threaten the long-term development

8 of United States-supported microfinance institutions.

9 ‘‘(b) DISBURSEMENTS.—

10 ‘‘(1) IN GENERAL.—The Administrator shall

11 make disbursements from the Facility to United

12 States-supported microfinance institutions to prevent

13 the bankruptcy of such institutions caused by—

14 ‘‘(A) natural disasters;

15 ‘‘(B) national wars or civil conflict; or

16 ‘‘(C) national financial crisis or other

17 short-term financial movements that threaten

18 the long-term development of United States19 supported microfinance institutions.

20 ‘‘(2) FORM OF ASSISTANCE.—Assistance under

21 this section shall be in the form of loans or loan

22 guarantees for microfinance institutions that dem23 onstrate the capacity to resume self-sustained oper24 ations within a reasonable time period.

25 ‘‘(3) CONGRESSIONAL NOTIFICATION PROCE26 DURES.—During the fiscal year 2001, funds may
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1 not be made available from the Facility until 15

2 days after notification of the proposed availability of

3 the funds has been provided to the congressional

4 committees specified in section 634A in accordance

5 with the procedures applicable to reprogramming no6 tifications under that section.

7 ‘‘(c) GENERAL PROVISIONS.—

8 ‘‘(1) POLICY PROVISIONS.—In providing the

9 credit assistance authorized by this section, the Ad10 ministrator should apply, as appropriate, the policy

11 provisions in this part that are applicable to develop12 ment assistance activities.

13 ‘‘(2) DEFAULT AND PROCUREMENT PROVI14 SIONS.—

15 ‘‘(A) DEFAULT PROVISION.—The provi16 sions of section 620(q), or any comparable pro17 vision of law, shall not be construed to prohibit

18 assistance to a country in the event that a pri19 vate sector recipient of assistance furnished

20 under this section is in default in its payment

21 to the United States for the period specified in

22 such section.

23 ‘‘(B) PROCUREMENT PROVISION.—Assist24 ance may be provided under this section with25 out regard to section 604(a).
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1 ‘‘(3) TERMS AND CONDITIONS OF CREDIT AS2 SISTANCE.—

3 ‘‘(A) IN GENERAL.—Credit assistance pro4 vided under this section shall be offered on such

5 terms and conditions, including fees charged, as

6 the Administrator may determine.

7 ‘‘(B) LIMITATION ON PRINCIPAL AMOUNT

8 OF FINANCING.—The principal amount of loans

9 made or guaranteed under this section in any

10 fiscal year, with respect to any single event,

11 may not exceed $30,000,000.

12 ‘‘(C) EXCEPTION.—No payment may be

13 made under any guarantee issued under this

14 section for any loss arising out of fraud or mis15 representation for which the party seeking pay16 ment is responsible.

17 ‘‘(4) FULL FAITH AND CREDIT.—All guarantees

18 issued under this section shall constitute obligations,

19 in accordance with the terms of such guarantees, of

20 the United States of America, and the full faith and

21 credit of the United States of America is hereby

22 pledged for the full payment and performance of

23 such obligations to the extent of the guarantee.

24 ‘‘(d) FUNDING.—

25 ‘‘(1) ALLOCATION OF FUNDS.—
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1 ‘‘(A) IN GENERAL.—Of the amounts made

2 available to carry out this part for the fiscal

3 year 2001, up to $5,000,000 may be made

4 available for—

5 ‘‘(i) the subsidy cost, as defined in

6 section 502(5) of the Federal Credit Re7 form Act of 1990, to carry out this section;

8 and

9 ‘‘(ii) subject to subparagraph (B), the

10 cost of administrative expenses to carry

11 out this section.

12 ‘‘(B) LIMITATION ON ADMINISTRATIVE EX13 PENSES.—Of the amount made available under

14 subparagraph (A) to carry out this section for

15 fiscal year 2001, not more than $500,000 may

16 be made available for administrative expenses

17 under subparagraph (A)(ii).

18 ‘‘(2) RELATION TO OTHER FUNDING.—

19 Amounts made available under paragraph (1) are in

20 addition to amounts available under any other provi21 sion of law to carry out this section.

22 ‘‘(e) DEFINITIONS.—In this section:

23 ‘‘(1) ADMINISTRATOR.—The term ‘Adminis24 trator’ means the Administrator of the agency pri25 marily responsible for administering this part.
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1 ‘‘(2) APPROPRIATE CONGRESSIONAL COMMIT2 TEES.—The term ‘appropriate congressional com3 mittees’ means the Committee on Foreign Relations

4 of the Senate and the Committee on International

5 Relations of the House of Representatives.

6 ‘‘(3) UNITED STATES-SUPPORTED MICRO7 FINANCE INSTITUTION.—The term ‘United States8 supported microfinance institution’ means a finan9 cial intermediary that has received funds made avail10 able under this Act for fiscal year 1980 or any sub11 sequent fiscal year.’’.

12 (b) REPORT.—Not later than 120 days after the date

13 of enactment of this Act, the Administrator of the United

14 States Agency for International Development shall submit

15 to the Committee on Foreign Relations of the Senate and

16 the Committee on International Relations of the House

17 of Representatives a report on the policies, rules, and reg18 ulations of the United States Microfinance Loan Facility

19 established under section 133 of the Foreign Assistance

20 Act of 1961, as added by subsection (a).

21 SEC. 7. REPORT RELATING TO FUTURE DEVELOPMENT OF

22 MICROENTERPRISE INSTITUTIONS.

23 (a) REPORT.—Not later than 180 days after the date

24 of the enactment of this Act, the President shall submit

25 to the appropriate congressional committees a report on
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1 the most cost-effective methods and measurements for in2 creasing the access of poor people overseas to credit, other

3 financial services, and related training.

4 (b) CONTENTS.—The report described in subsection

5 (a)—

6 (1) should include how the President, in con7 sultation with the Administrator of the United

8 States Agency for International Development, the

9 Secretary of State, and the Secretary of the Treas10 ury, will jointly develop a comprehensive strategy for

11 advancing the global microenterprise sector in a way

12 that maintains market principles while ensuring that

13 the very poor overseas, particularly women, obtain

14 access to financial services overseas; and

15 (2) shall provide guidelines and recommenda16 tions for—

17 (A) instruments to assist microenterprise

18 networks to develop multi-country and regional

19 microlending programs;

20 (B) technical assistance to foreign govern21 ments, foreign central banks, and regulatory

22 entities to improve the policy environment for

23 microfinance institutions, and to strengthen the

24 capacity of supervisory bodies to supervise

25 microfinance institutions;
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1 (C) the potential for Federal chartering of

2 United States-based international microfinance

3 network institutions, including proposed legisla4 tion;

5 (D) instruments to increase investor con6 fidence in microfinance institutions which would

7 strengthen the long-term financial position of

8 the microfinance institutions and attract capital

9 from private sector entities and individuals,

10 such as a rating system for microfinance insti11 tutions and local credit bureaus;

12 (E) an agenda for integrating microfinance

13 into United States foreign policy initiatives

14 seeking to develop and strengthen the global fi15 nance sector; and

16 (F) innovative instruments to attract funds

17 from the capital markets, such as instruments

18 for leveraging funds from the local commercial

19 banking sector, and the securitization of

20 microloan portfolios.

21 (c) APPROPRIATE CONGRESSIONAL COMMITTEES DE22 FINED.—In this section, the term ‘‘appropriate congres23 sional committees’’ means the Committee on International

24 Relations of the House of Representatives and the Com25 mittee on Foreign Relations of the Senate.
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1 SEC. 8. UNITED STATES AGENCY FOR INTERNATIONAL DE2 VELOPMENT AS GLOBAL LEADER AND COOR3 DINATOR OF BILATERAL AND MULTILATERAL

4 MICROENTERPRISE ASSISTANCE ACTIVITIES.

5 (a) FINDINGS AND POLICY.—Congress finds and de6 clares that—

7 (1) the United States can provide leadership to

8 other bilateral and multilateral development agencies

9 as such agencies expand their support to the micro10 enterprise sector; and

11 (2) the United States should seek to improve

12 coordination among G–7 countries in the support of

13 the microenterprise sector in order to leverage the

14 investment of the United States with that of other

15 donor nations.

16 (b) SENSE OF CONGRESS.—It is the sense of Con17 gress that—

18 (1) the Administrator of the United States

19 Agency for International Development and the Sec20 retary of State should seek to support and strength21 en the effectiveness of microfinance activities in

22 United Nations agencies, such as the International

23 Fund for Agricultural Development (IFAD) and the

24 United Nations Development Program (UNDP),

25 which have provided key leadership in developing the

26 microenterprise sector; and
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1 (2) the Secretary of the Treasury should in2 struct each United States Executive Director of the

3 multilateral development banks (MDBs) to advocate

4 the development of a coherent and coordinated strat5 egy to support the microenterprise sector and an in6 crease of multilateral resource flows for the purposes

7 of building microenterprise retail and wholesale

8 intermediaries.

9 SEC. 9. DEFINITIONS.

10 In this Act:

11 (1) MICROENTERPRISE INSTITUTION.—The

12 term ‘‘microenterprise institution’’ means an institu13 tion that provides microfinance services, and other

14 training or business services, directly to microentre15 preneurs.

16 (2) MICROFINANCE INSTITUTION.—The term

17 ‘‘microfinance institution’’ means an institution that

18 makes loans as well as provides savings and insur19 ance services.

20 (3) PRACTITIONER INSTITUTION.—The term

21 ‘‘practitioner institution’’ means a microfinance in22 stitution that is administered by a nongovernmental

23 organization or by a private and voluntary organiza24 tion and that provides direct services for microentre25 preneurs.
Calendar No. 670

106TH CONGRESS

2D SESSION S. 2844

[Report No. 106–335]

A BILL

To amend the Foreign Assistance Act of 1961 to

authorize the provision of assistance to increasethe availability of credit to microenterprises lacking full access to credit, to establish a Microfinance Loan Facility, and for other purposes.

JULY 11, 2000

Read twice and placed on the calendar