SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Microenterprise for
Self-Reliance Act of 1999’’.
SEC. 2. FINDINGS AND DECLARATIONS OF POLICY.
The Congress makes the following findings and dec-
larations:
(1) According to the World Bank, more than
1,200,000,000 people in the developing world, or
one-fifth of the world’s population, subsist on less
than $1 a day.
(2) Over 32,000 of their children die each day
from largely preventable malnutrition and disease.
(3)(A) Women in poverty generally have larger
work loads and less access to educational and eco-
nomic opportunities than their male counterparts.
(B) Directly aiding the poorest of the poor, es-
pecially women, in the developing world has a posi-
tive effect not only on family incomes, but also on
child nutrition, health and education, as women in
particular reinvest income in their families.
(4)(A) The poor in the developing world, par-
ticularly women, generally lack stable employment
and social safety nets.
(B) Many turn to self-employment to generate
a substantial portion of their livelihood. In Africa,
over 80 percent of employment is generated in the
informal sector of the self-employed poor.
(C) These poor entrepreneurs are often trapped
in poverty because they cannot obtain credit at rea-
sonable rates to build their asset base or expand
their otherwise viable self-employment activities.
(D) Many of the poor are forced to pay interest
rates as high as 10 percent per day to money lend-
ers.
(5)(A) The poor are able to expand their in-
comes and their businesses dramatically when they
can access loans at reasonable interest rates.
(B) Through the development of self-sustaining
microfinance programs, poor people themselves can
lead the fight against hunger and poverty.
(6)(A) On February 2–4, 1997, a global Micro-
credit Summit was held in Washington, District of
Columbia, to launch a plan to expand access to cred-
it for self-employment and other financial and busi-
ness services to 100,000,000 of the world’s poorest
families, especially the women of those families, by
2005.
(B) With an average family size of five, achiev-
ing this goal will mean that the benefits of micro-
finance will thereby reach nearly half of the world’s
more than 1,000,000,000 absolute poor people.
(7)(A) Nongovernmental organizations, such as
those that comprise the Microenterprise Coalition
(such as the Grameen Bank (Bangladesh,) K–REP
(Kenya), and networks such as Accion International,
the Foundation for International Community Assist-
ance (FINCA), and the credit union movement) are
successful in lending directly to the very poor.
(B) Microfinance institutions such as BRAC
(Bangladesh), BancoSol (Bolivia), SEWA Bank
(India), and ACEP (Senegal) are regulated financial
institutions that can raise funds directly from the
local and international capital markets.
(8)(A) Microenterprise institutions not only re-
duce poverty, but also reduce the dependency on for-
eign assistance.
(B) Interest income on the credit portfolio is
used to pay recurring institutional costs, assuring
the long-term sustainability of development assist-
ance.
(9) Microfinance institutions leverage foreign
assistance resources because loans are recycled, gen-
erating new benefits to program participants.
(10)(A) The development of sustainable micro-
finance institutions that provide credit and training,
and mobilize domestic savings, are critical compo-
nents to a global strategy of poverty reduction and
broad-based economic development.
(B) In the efforts of the United States to lead
the development of a new global financial architec-
ture, microenterprise should play a vital role. The
recent shocks to international financial markets
demonstrate how the financial sector can shape the
destiny of nations. Microfinance can serve as a pow-
erful tool for building a more inclusive financial sec-
tor which serves the broad majority of the world’s
population including the very poor and women and
thus generate more social stability and prosperity.
(C) Over the last two decades, the United
States has been a global leader in promoting the
global microenterprise sector, primarily through its
development assistance programs at the United
States Agency for International Development. Addi-
tionally, the United States Department of the Treas-
ury and the Department of State have used their au-
thority to promote microenterprise in the develop-
ment programs of international financial institutions
and the United Nations.
(11)(A) In 1994, the United States Agency for
International Development launched the ‘‘Micro-
enterprise Initiative’’ in partnership with the Con-
gress.
(B) The initiative committed to expanding
funding for the microenterprise programs of the
Agency, and set a goal that, by the end of fiscal year
1996, half of all microenterprise resources would
support programs and institutions that provide cred-
it to the poorest, with loans under $300.
(C) In order to achieve the goal of the micro-
credit summit, increased investment in microcredit
institutions serving the poorest will be critical.
(12) Providing the United States share of the
global investment needed to achieve the goal of the
microcredit summit will require only a small increase
in United States funding for international micro-
credit programs, with an increased focus on institu-
tions serving the poorest.
(13)(A) In order to reach tens of millions of the
poorest with microcredit, it is crucial to expand and
replicate successful microcredit institutions.
(B) These institutions need assistance in devel-
oping their institutional capacity to expand their
services and tap commercial sources of capital.
(14) Nongovernmental organizations have dem-
onstrated competence in developing networks of local
microfinance institutions and other assistance deliv-
ery mechanisms so that they reach large numbers of
the very poor, and achieve financial sustainability.
(15) Recognizing that the United States Agency
for International Development has developed very ef-
fective partnerships with nongovernmental organiza-
tions, and that the Agency will have fewer missions
to carry out its work, the Agency should place pri-
ority on investing in those nongovernmental network
institutions that meet performance criteria through
the central funding mechanisms of the Agency.
(16) By expanding and replicating successful
microcredit institutions, it should be possible to cre-
ate a global infrastructure to provide financial serv-
ices to the world’s poorest families.
(17)(A) The United States can provide leader-
ship to other bilateral and multilateral development
agencies as such agencies expand their support to
the microenterprise sector.
(B) The United States should seek to improve
coordination among G–7 countries in the support of
the microenterprise sector in order to leverage the