I 
109TH CONGRESS 
1ST SESSION H. R. 4319 
To provide assistance for small and medium enterprises in sub-Saharan 
African countries, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
NOVEMBER 15, 2005 
Mr. LANTOS (for himself and Mr. SMITH of New Jersey) introduced the fol-
lowing bill; which was referred to the Committee on International Rela-
tions, and in addition to the Committee on Ways and Means, for a period 
to be subsequently determined by the Speaker, in each case for consider-
ation of such provisions as fall within the jurisdiction of the committee 
concerned 
A BILL 
To provide assistance for small and medium enterprises in 
sub-Saharan African countries, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Assistance for Small and Medium Enterprises in Sub- 
Saharan African Countries Act of 2005’’. 
(b) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows:
Sec. 1. Short title; table of contents. 
Sec. 2. Findings. 
Sec. 3. Sense of Congress; declaration of policy. 
Sec. 4. Activities of the Overseas Private Investment Corporation to strengthen 
financial institutions in sub-Saharan African countries. 
Sec. 5. Assistance for small and medium enterprises in sub-Saharan African 
countries. 
Sec. 6. Actions to improve trade between sub-Saharan African countries and 
the United States. 
Sec. 7. Definitions. 
SEC. 2. FINDINGS. 
Congress finds the following: 
(1) According to the Organization for Economic 
Co-operation and Development (OECD), the econo-
mies of sub-Saharan African countries have reg-
istered their highest overall growth in eight years— 
more than five percent in 2004—due to rising global 
commodity prices, the expansion of production in oil- 
producing sub-Saharan African countries, and pru-
dent macro-economic policies. 
(2) While economic liberalization has reduced 
the involvement of governments of sub-Saharan Afri-
can countries in the economic sector, it has not re-
sulted in improved credit delivery to finance domes-
tic businesses, particularly small and medium enter-
prises in sub-Saharan African countries, in the pri-
vate sector. 
(3) Despite the privatization of over 2,273 busi-
nesses in sub-Saharan African countries and $9.1 
billion raised, private sector investment still lags be-
hind Asia, in large part due to inadequate infra-
structure, including electricity, water, roads, and 
commerce facilities, and a risk-averse retail banking 
sector. 
(4) Sub-Saharan Africa countries hold billions 
of uninvested capital in central banks and financial 
holding institutions. In the eight-nation West Afri-
can Economic and Monetary Union the amount of 
excess capital in the central bank recently peaked at 
almost $2 billion. 
(5) Excess reserves of uninvested capital in sub- 
Saharan African countries have often been illicitly 
diverted or invested in economically inefficient enter-
prises and other purposes, often for the benefit of 
politically-connected persons or entities. 
(6) Nigerian President Olusegun Obasanjo re-
cently estimated that corrupt leaders of sub-Saharan 
African countries have stolen at least $140 billion 
from their citizens in the four decades since inde-
pendence. This theft contributes to the fact that the 
people of sub-Saharan African countries owe 
unsustainably large public and foreign debts, face 
high rates of extreme poverty, and have enjoyed lit-
tle basic economic development.
(7) Increasingly, governments of sub-Saharan 
African countries are making concerted efforts to in-
vestigate such activities, prosecute corrupt officials, 
and recover public funds through the creation of 
agencies such as the Economic and Financial Crimes 
Commission in Nigeria, the Serious Fraud Office in 
Ghana, the Federal Ethics and Anticorruption Com-
mission in Ethiopia, and the Anticorruption Com-
mission in Zambia. 
(8) These efforts will require technical assist-
ance and law enforcement cooperation from the 
international community, including the United 
States. 
(9) A major challenge for sub-Saharan African 
countries is to productively invest their own capital 
to expand domestic business ownership and create 
employment, particularly for youth, in order to pro-
mote broad and sustainable economic growth. 
(10) While the microenterprise movement has 
shown itself to be an important generator of self-em-
ployment, research and experience throughout sub- 
Saharan Africa also have proven that small and me-
dium enterprises are the greatest catalyst for job 
creation, skills transfer, and wealth creation in sub- 
Saharan Africa.
(11) Although small and medium enterprises in 
sub-Saharan African countries make up the largest 
portion of the formal economy in sub-Saharan Afri-
can countries, the average annual contribution of in-
vestments of such small and medium enterprises to 
growth in the gross domestic product of sub-Saha-
ran African countries by proportion declined from an 
average of 14 percent in the 1970s, to 13 percent 
in the 1980s, and to 12 percent in the first half of 
the 1990s, while during the same period, the propor-
tion of gross domestic product investment by small 
and medium enterprises in other developing regions 
increased. 
(12) Investments in small and medium enter-
prises in sub-Saharan African countries also have 
declined, in part because an estimated 37 percent of 
personal wealth in sub-Saharan African countries is 
held in assets and cash located outside of sub-Saha-
ran African countries, even though the global region 
with the highest return on capital investment is sub- 
Saharan Africa. 
(13) Many retail banks avoid lending to small 
and medium enterprises in sub-Saharan African 
countries or engage in predatory lending practices, 
considering such small and medium enterprises as
presenting a high credit default risk and as costly to 
administer, and instead concentrate on providing 
credit to larger local or international firms or on 
holding high-yield government bonds. 
(14) This approach harms the prospects for 
sustainable private sector development by ignoring 
the necessity of a bottom-up capital formation—a 
key factor in creating jobs which is necessary to re-
duce poverty and income inequalities. 
(15) Governments of sub-Saharan African 
countries must develop the fiscal policies, economic 
institutions, legal frameworks, labor market protec-
tions, commercial infrastructures, and lending prac-
tices to create and manage competitive business en-
vironments for investors in small and medium enter-
prises in sub-Saharan African countries. Further, 
small and medium enterprises in sub-Saharan Afri-
can countries must acquire the business skills, ex-
pertise, and capital financing necessary to manage 
successful businesses. 
SEC. 3. SENSE OF CONGRESS; DECLARATION OF POLICY. 
(a) SENSE OF CONGRESS.— It is the sense of Con-
gress that in an increasingly competitive global environ-
ment driven by transformations in technology, commu-
nications, transportation, finance, production, labor mar-
kets, and markets for goods and services, sub-Saharan Af-
rican countries should develop the private sector, particu-
larly small and medium enterprises, and human capital, 
goods and services, banking and finance systems, and cre-
ate markets to be full participants in the global economy. 
(b) DECLARATION OF POLICY.—It shall be the policy 
of the Government of the United States to make available 
for private sector development in sub-Saharan African 
countries professional, technical, and other resources for 
capacity-building for finance ministries, central and retail 
banks, and small and medium enterprises to promote en-
trepreneurship, expand the formal sector, and increase 
trade under the African Growth and Opportunity Act (19 
U.S.C. 3701 et seq.) of exports from Africa to the United 
States. 
SEC. 4. ACTIVITIES OF THE OVERSEAS PRIVATE INVEST-
MENT CORPORATION TO STRENGTHEN FI-
NANCIAL INSTITUTIONS IN SUB-SAHARAN AF-
RICAN COUNTRIES. 
Section 240 of the Foreign Assistance Act of 1961 
(22 U.S.C. 2200) is amended by adding at the end the 
following: 
‘‘(c) SUPPORT
FOR FINANCIAL INSTITUTIONS
IN 
SUB-SAHARAN AFRICAN COUNTRIES.—
‘‘(1) SUPPORT.—The Corporation is com-
mended for its activities in support of the develop-
ment of small and medium enterprises, and is en-
couraged to exercise its authorities to promote 
United States investments in financial institutions 
that are duly incorporated in sub-Saharan African 
countries, to the extent that the purpose of such in-
vestments is to expand investment and lending op-
portunities to small and medium enterprises in sub- 
Saharan African countries that are engaged in do-
mestic commerce in areas that are responsible for 
significant job creation. 
‘‘(2) CONSIDERATION.—In making a determina-
tion to provide insurance and financing to financial 
institutions referred to in paragraph (1), the Cor-
poration should take into consideration the extent to 
which a project establishes and implements a non-
discrimination in lending policy to prohibit discrimi-
nation based on ethnicity, sex, color, race, religion, 
physical disability, marital status, or age, and a pol-
icy against predatory lending practices. 
‘‘(3) TECHNICAL ASSISTANCE.—In supporting a 
project referred to in paragraph (1), the Corporation 
may provide technical assistance to—
‘‘(A) improve the quality of management of 
financial institutions referred to in paragraph 
(1) to ensure the safety and stability of such in-
stitutions; 
‘‘(B) create in such financial institutions 
effective credit risk management systems to im-
prove the quality of the assets of such institu-
tions and the ability of such institutions to re-
search and assess the overall credit risk of crit-
ical industries in the domestic economy; 
‘‘(C) support effective credit risk manage-
ment by developing internal credit rating sys-
tems and credit assessment tools that improve 
the ability of such financial institutions to 
evaluate individual credit worthiness and meas-
ure the overall amount of risk posed by the 
total number of borrowers; and 
‘‘(D) establish comprehensive collateral 
management programs to control borrower as-
sets against default and exposure as part of the 
risk management process. 
‘‘(4) DEFINITIONS.—In this subsection: 
‘‘(A) SMALL
AND
MEDIUM
ENTERPRISES 
IN
SUB-SAHARAN
AFRICAN
COUNTRIES.—The 
term ‘small and medium enterprises in sub-Sa-
haran African countries’ has the meaning given 
the term in section 496A(e)(2) of this Act. 
‘‘(B) 
SUB-SAHARAN
AFRICAN
COUN-
TRIES.—The term ‘sub-Saharan African coun-
tries’ means the countries specified in section 
107 of the African Growth and Opportunity Act 
(19 U.S.C. 3706).’’. 
SEC. 5. ASSISTANCE FOR SMALL AND MEDIUM ENTER-
PRISES IN SUB-SAHARAN AFRICAN COUN-
TRIES. 
(a) IN GENERAL.—Chapter 10 of part I of the For-
eign Assistance Act of 1961 (22 U.S.C. 2293 et seq.) is 
amended by inserting after section 496 the following new 
section: 
‘‘SEC. 496A. ASSISTANCE FOR SMALL AND MEDIUM ENTER-
PRISES IN SUB-SAHARAN AFRICAN COUN-
TRIES. 
‘‘(a) 
AUTHORIZATION.—The 
President, 
acting 
through the Administrator of the United States Agency 
for International Development, is authorized to provide as-
sistance, on such terms and conditions as the President 
may determine, for small and medium enterprises in sub- 
Saharan African countries.
‘‘(b) ACTIVITIES SUPPORTED.—Assistance provided 
under subsection (a) shall, to the maximum extent prac-
ticable, be used to carry out the following activities: 
‘‘(1) EFFECTIVENESS
OF
FINANCIAL
SEC-
TORS.—Activities to improve the effectiveness of the 
financial sectors of sub-Saharan African countries to 
promote increased business and employment oppor-
tunities for small and medium enterprises in sub-Sa-
haran African countries. Such activities may include 
providing technical assistance relating to— 
‘‘(A) tax policy and administration; 
‘‘(B) government debt issuance and man-
agement; 
‘‘(C) policies and regulation of financial in-
stitutions; 
‘‘(D) prevention, detection, and prosecution 
of financial crimes; 
‘‘(E) regulatory systems; 
‘‘(F) innovative services and specialized in-
stitutions to serve the small and medium enter-
prise market; and 
‘‘(G) compliance with international finan-
cial standards. 
‘‘(2) LENDING PROGRAMS OF FINANCIAL INSTI-
TUTIONS.—Activities to promote the establishment
of lending programs of financial institutions for 
small and medium enterprises in sub-Saharan Afri-
can countries by— 
‘‘(A) improving the quality of management 
of such financial institutions to ensure their 
safety and stability; 
‘‘(B) establishing effective credit risk man-
agement systems to improve the quality of the 
assets of such financial institutions and the 
ability of such financial institutions to research 
and assess overall credit risk; 
‘‘(C) supporting effective credit risk man-
agement systems described in subparagraph (B) 
by developing internal credit rating systems and 
credit assessment tools that improve the ability 
of such financial institutions to evaluate indi-
vidual credit worthiness and measure the overall 
amount of risk posed by the total number of 
borrowers; and 
‘‘(D) establishing comprehensive collateral 
management programs to control borrower as-
sets against default and exposure as part of the 
risk management process. 
‘‘(3) TECHNOLOGY
AND
INFORMATION
RE-
SOURCES.—Activities to improve the technology and