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file FINCA
I
n time this little boy will grow to be a healthy adult. Many are not so lucky. Through a FINCA
village bank, the boy's mother receives loans of $50 to $300 to invest in her small business,
increasing her family's income, nutrition, and well-being. Today, FINCA Village Banking pro-
grams ensure the survival of thousands of children by making it possible for their parents to work.
V
FINCA VILLAGE BANKING™
ATION
FINCA INTERNATIONAL
FOUNDATION FOR INTERNATIONAL COMMUNITY ASSISTANCE
1101 14th Street, NW
11th Floor
Washington, DC 20005
202/682-1510 fax: 202/682-1535 e-mail: [email protected].
DOP\
ATION
II
106TH CONGRESS
1ST SESSION
S. 1463
To establish a program to provide assistance for programs of credit and
other financial services for microenterprises in developing countries, and
for other purposes.
IN THE SENATE OF THE UNITED STATES
JULY 29, 1999
Mr. DEWINE (for himself, Ms. SNOWE, Mr. TORRICELLI. Ms. COLLINS, Mr.
DURBIN, Mrs. FEINSTEIN, Ms. MIKULSKI, Mr. SCHUMER, Mr. BINGA-
MAN, Mr. CHAFEE, and Mr. KENNEDY) introduced the following bill;
which was read twice and referred to the Committee on Foreign Relations
A
BILL
To establish a program to provide assistance for programs
of credit and other financial services for microenterprises
in developing countries, and for other purposes.
1
Be it enacted by the Senate and House of Representa-
2 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 1999".
6 SEC. 2. FINDINGS AND DECLARATIONS OF POLICY.
7
The Congress makes the following findings and dec-
8 larations:
2
1
(1) According to the World Bank, more than
2
1,200,000,000 people in the developing world, or
3
one-fifth of the world's population, subsist on less
4
than $1 a day.
5
(2) Over 32,000 of their children die each day
6
from largely preventable malnutrition and disease.
7
(3)(A) Women in poverty generally have larger
8
work loads and less access to educational and eco-
9
nomic opportunities than their male counterparts.
10
(B) Directly aiding the poorest of the poor, es-
11
pecially women, in the developing world has a posi-
12
tive effect not only on family incomes, but also on
13
child nutrition, health and education, as women in
14
particular reinvest income in their families.
15
(4)(A) The poor in the developing world, par-
16
ticularly women, generally lack stable employment
17
and social safety nets.
18
(B) Many turn to self-employment to generate
19
a substantial portion of their livelihood. In Africa,
20
over 80 percent of employment is generated in the
21
informal sector of the self-employed poor.
22
(C) These poor entrepreneurs are often trapped
23
in poverty because they cannot obtain credit at rea-
24
sonable rates to build their asset base or expand
25
their otherwise viable self-employment activities.
.S 1463 IS
3
1
(D) Many of the poor are forced to pay interest
2
rates as high as 10 percent per day to money lend-
3
ers.
4
(5) (A) The poor are able to expand their in-
5
comes and their businesses dramatically when they
6
can access loans at reasonable interest rates.
7
(B) Through the development of self-sustaining
8
microfinance programs, poor people themselves can
9
lead the fight against hunger and poverty.
10
(6)(A) On February 2-4, 1997, a global Micro-
11
credit Summit was held in Washington, District of
12
Columbia, to launch a plan to expand access to cred-
13
it for self-employment and other financial and busi-
14
ness services to 100,000,000 of the world's poorest
15
families, especially the women of those families, by
16
2005. While this scale of outreach may not be
17
achievable in this short-time frame, the realization of
18
this goal could dramatically alter the face of global
19
poverty.
20
(B) With an average family size of five, achiev-
21
ing this goal will mean that the benefits of micro-
22
finance will thereby reach nearly half of the world's
23
more than 1,000,000,000 absolute poor people.
24
(7) (A) Nongovernmental organizations, such as
25
those that comprise the Microenterprise Coalition
.S 1463 IS
4
1
(such as the Grameen Bank (Bangladesh,) K-REP
2
(Kenya), and networks such as Accion International,
3
the Foundation for International Community Assist-
4
ance (FINCA), and the credit union movement) are
5
successful in lending directly to the very poor.
6
(B) Microfinance institutions such as BRAC
7
(Bangladesh), BancoSol (Bolivia), SEWA Bank
8
(India), and ACEP (Senegal) are regulated financial
9
institutions that can raise funds directly from the
10
local and international capital markets.
11
(8)(A) Microenterprise institutions not only re-
12
duce poverty, but also reduce the dependency on for-
13
eign assistance.
14
(B) Interest income on the credit portfolio is
15
used to pay recurring institutional costs, assuring
16
the long-term sustainability of development assist-
17
ance.
18
(9) Microfinance institutions leverage foreign
19
assistance resources because loans are recycled, gen-
20
erating new benefits to program participants.
21
(10) (A) The development of sustainable micro-
22
finance institutions that provide credit and training,
23
and mobilize domestic savings, are critical compo-
24
nents to a global strategy of poverty reduction and
25
broad-based economic development.
.S 1463 IS
5
1
(B) In the efforts of the United States to lead
2
the development of a new global financial architec-
3
ture, microenterprise should play a vital role. The
4
recent shocks to international financial markets
5
demonstrate how the financial sector can shape the
6
destiny of nations. Microfinance can serve as a pow-
7
erful tool for building a more inclusive financial sec-
8
tor which serves the broad majority of the world's
9
population including the very poor and women and
10
thus generate more social stability and prosperity.
11
(C) Over the last two decades, the United
12
States has been a global leader in promoting the
13
global microenterprise sector, primarily through its
14
development assistance programs at the United
15
States Agency for International Development. Addi-
16
tionally, the United States Department of the Treas-
17
ury and the Department of State have used their au-
18
thority to promote microenterprise in the develop-
19
ment programs of international financial institutions
20
and the United Nations.
21
(11) (A) In 1994, the United States Agency for
22
International Development launched the "Micro-
23
enterprise Initiative" in partnership with the Con-
24
gress.
.S 1463 IS
6
1
(B) The initiative committed to expanding
2
funding for the microenterprise programs of the
3
Agency, and set a goal that, by the end of fiscal year
4
1996, half of all microenterprise resources would
5
support programs and institutions that provide cred-
6
it to the poorest, with loans under $300.
7
(C) In order to achieve the goal of the micro-
8
credit summit, increased investment in microcredit
9
institutions serving the poorest will be critical.
10
(12) Providing the United States share of the
11
global investment needed to achieve the goal of the
12
microcredit summit will require only a small increase
13
in United States funding for international micro-
14
credit programs, with an increased focus on institu-
15
tions serving the poorest.
16
(13) (A) In order to reach tens of millions of the
17
poorest with microcredit, it is crucial to expand and
18
replicate successful microcredit institutions.
19
(B) These institutions need assistance in devel-
20
oping their institutional capacity to expand their
21
services and tap commercial sources of capital.
22
(14) Nongovernmental organizations have dem-
23
onstrated competence in developing networks of local
24
microfinance institutions and other assistance deliv-
.S 1463 IS
7
1
ery mechanisms SO that they reach large numbers of
2
the very poor, and achieve financial sustainability.
3
(15) Recognizing that the United States Agency
4
for International Development has developed very ef-
5
fective partnerships with nongovernmental organiza-
6
tions, and that the Agency will have fewer missions
7
to carry out its work, the Agency should place pri-
8
ority on investing in those nongovernmental network
9
institutions that meet performance criteria through
10
the central funding mechanisms of the Agency.
11
(16) By expanding and replicating successful
12
microcredit institutions, it should be possible to cre-
13
ate a global infrastructure to provide financial serv-
14
ices to the world's poorest families.
15
(17) The United States can provide leader-
16
ship to other bilateral and multilateral development
17
agencies as such agencies expand their support to
18
the microenterprise sector.
19
(B) The United States should seek to improve
20
coordination among G-7 countries in the support of
21
the microenterprise sector in order to leverage the
22
investment of the United States with that of other
23
donor nations.
24
(18) Through increased support for microenter-
25
prise, especially credit for the poorest, the United
.S 1463 IS
8
1
States can continue to play a leadership role in the
2
global effort to expand financial services and oppor-
3
tunity to 100,000,000 of the poorest families on the
4
planet.
5
SEC. 3. PURPOSES.
6
The purposes of this Act are-
7
(1) to make microenterprise development an im-
8
portant element of United States foreign economic
9
policy and assistance;
10
(2) to provide for the continuation and expan-
11
sion of the commitment of the United States Agency
12
for International Development to the development of
13
microenterprise institutions as outlined in its 1994
14
Microenterprise Initiative;
15
(3) to support and develop the capacity of
16
United States and indigenous nongovernmental or-
17
ganization intermediaries to provide credit, savings,
18
training and technical services to microentre-
19
preneurs;
20
(4) to increase the amount of assistance de-
21
voted to credit activities designed to reach the poor-
22
est sector in developing countries, and to improve
23
the access of the poorest, particularly women, to
24
microenterprise credit in developing countries; and
.S 1463 IS
9
1
(5) to encourage the United States Agency for
2
International Development to coordinate micro-
3
finance policy, in consultation with the Department
4
of the Treasury and the Department of State, and
5
to provide global leadership in promoting micro-
6
enterprise for the poorest among bilateral and multi-
7
lateral donors.
8 SEC. 4. MICROENTERPRISE DEVELOPMENT GRANT ASSIST-
9
ANCE.
10
Chapter 1 of part I of the Foreign Assistance Act
11 of 1961 (22 U.S.C. 2151 et seq.) is amended-
12
(1) by redesignating the second section 129 (as
13
added by section 4 of the Torture Victims Relief Act
14
of 1998 (Public Law 105-320)) as section 130; and
15
(2) by adding at the end the following new sec-
16
tion:
17 "SEC. 131. MICROENTERPRISE DEVELOPMENT GRANT AS-
18
SISTANCE.
19
"(a) FINDINGS AND POLICY.-The Congress finds
20 and declares that-
21
"(1) the development of microenterprise is a
22
vital factor in the stable growth of developing coun-
23
tries and in the development of free, open, and equi-
24
table international economic systems;
.S 1463 IS
10
1
"(2) it is therefore in the best interest of the
2
United States to assist the development of micro-
3
enterprises in developing countries; and
4
"(3) the support of microenterprise can be
5
served by programs providing credit, savings, train-
6
ing, and technical assistance.
7
"(b) AUTHORIZATION.-(1) In carrying out this part,
8 the President is authorized to provide grant assistance for
9 programs to increase the availability of credit and other
10 services to microenterprises lacking full access to capital
11 and training through-
12
"(A) grants to microfinance institutions for the
13
purpose of expanding the availability of credit, sav-
14
ings, and other financial services to microentre-
15
preneurs;
16
"(B) training, technical assistance, and other
17
support for microenterprises to enable them to make
18
better use of credit, to better manage their enter-
19
prises, and to increase their income and build their
20
assets;
21
"(C) capacity building for microfinance institu-
22
tions in order to enable them to better meet the
23
credit and training needs of microentrepreneurs; and
24
"(D) policy and regulatory programs at the
25
country level that improve the environment for
.S 1463 IS
11
1
microfinance institutions that serve the poor and
2
very poor.
3
"(2) Assistance authorized under paragraph (1) shall
4 be provided through organizations that have a capacity to
5 develop and implement microenterprise programs, includ-
6 ing particularly-
7
"(A) United States and indigenous private and
8
voluntary organizations;
9
"(B) United States and indigenous credit
10
unions and cooperative organizations;
11
"(C) other indigenous governmental and non-
12
governmental organizations; or
13
"(D) business development services, including
14
indigenous craft programs.
15
"(3) In carrying out sustainable poverty-focused pro-
16 grams under paragraph (1), 50 percent of all microenter-
17 prise resources shall be used for direct support of pro-
18 grams under this subsection through practitioner institu-
19 tions that provide credit and other financial services to
20 the poorest with loans of $300 or less in 1995 United
21 States dollars and can cover their costs of credit programs
22 with revenue from lending activities or that demonstrate
23 the capacity to do SO in a reasonable time period.
24
"(4) The President should continue support for cen-
25 tral mechanisms and missions that-
.S 1463 IS
12
1
"(A) provide technical support for field mis-
2
sions;
3
"(B) strengthen the institutional development
4
of the intermediary organizations described in para-
5
graph (2);
6
"(C) share information relating to the provision
7
of assistance authorized under paragraph (1) be-
8
tween such field missions and intermediary organiza-
9
tions; and
10
"(D) support the development of nonprofit glob-
11
al microfinance networks, including credit union sys-
12
tems, that-
13
"(i) are able to deliver very small loans
14
through a vast grassroots infrastructure based
15
on market principles; and
16
"(ii) act as wholesale intermediaries pro-
17
viding a range of services to microfinance retail
18
institutions, including financing, technical as-
19
sistance, capacity building and safety and
20
soundness accreditation.
21
"(5) Assistance provided under this subsection may
22 only be used to support microenterprise programs and
23 may not be used to support programs not directly related
24 to the purposes described in paragraph (1).
.S 1463 IS
13
1
"(c) MONITORING SYSTEM.-In order to maximize
2 the sustainable development impact of the assistance au-
3 thorized under subsection (a)(1), the Administrator of the
4 United States Agency for International Development shall
5 establish a monitoring system that-
6
"(1) establishes performance goals for such as-
7
sistance and expresses such goals in an objective and
8
quantifiable form, to the extent feasible;
9
"(2) establishes performance indicators to be
10
used in measuring or assessing the achievement of
11
the goals and objectives of such assistance;
12
"(3) provides a basis for recommendations for
13
adjustments to such assistance to enhance the sus-
14
tainable development impact of such assistance, par-
15
ticularly the impact of such assistance on the very
16
poor, particularly poor women; and
17
"(4) provides a basis for recommendations for
18
adjustments to measures for reaching the poorest of
19
the poor, including proposed legislation containing
20
amendments to improve paragraph (3).
21
"(d) AUTHORIZATION OF APPROPRIATIONS.-
22
"(1) IN GENERAL.-(A) There are authorized
23
to be appropriated $152,000,000 for fiscal year
24
2000 and $167,000,000 for fiscal year 2001 to carry
25
out this section.
.S 1463 IS
14
1
"(B) Amounts appropriated pursuant to the au-
2
thorization of appropriations under subparagraph
3
(A) are authorized to remain available until ex-
4
pended.
5
"(2) RULE OF CONSTRUCTION.-Amounts au-
6
thorized to be appropriated under paragraph (1) are
7
in addition to amounts otherwise available to carry
8
out this section.".
9 SEC. 5. MICRO- AND SMALL ENTERPRISE DEVELOPMENT
10
CREDITS.
11
Section 108 of the Foreign Assistance Act of 1961
12 (22 U.S.C. 2151f) is amended to read as follows:
13 "SEC. 108. MICRO- AND SMALL ENTERPRISE DEVELOPMENT
14
CREDITS.
15
"(a) FINDINGS AND POLICY.-The Congress finds
16 and declares that-
17
"(1) the development of micro- and small enter-
18
prises are a vital factor in the stable growth of de-
19
veloping countries and in the development and sta-
20
bility of a free, open, and equitable international
21
economic system; and
22
"(2) it is, therefore, in the best interests of the
23
United States to assist the development of the enter-
24
prises of the poor in developing countries and to en-
.S 1463 IS
15
1
gage the United States private sector in that proc-
2
ess.
3
"(b) PROGRAM.-To carry out the policy set forth in
4 subsection (a), the President is authorized to provide as-
5 sistance to increase the availability of credit to micro- and
6 small enterprises lacking full access to credit, including
7 through-
8
"(1) loans and guarantees to credit institutions
9
for the purpose of expanding the availability of cred-
10
it to micro- and small enterprises;
11
"(2) training programs for lenders in order to
12
enable them to better meet the credit needs of
13
microentrepreneurs; and
14
"(3) training programs for microentrepreneurs
15
in order to enable them to make better use of credit
16
and to better manage their enterprises.
17
"(c) ELIGIBILITY CRITERIA.-The Administrator of
18 the United States Agency for International Development
19 shall establish criteria for determining which entities de-
20 scribed in subsection (b) are eligible to carry out activities,
21 with respect to micro- and small enterprises, assisted
22 under this section. Such criteria may include the following:
23
"(1) The extent to which the recipients of credit
24
from the entity do not have access to the local for-
25
mal financial sector.
.S 1463 IS
16
1
"(2) The extent to which the recipients of credit
2
from the entity are among the poorest people in the
3
country.
4
"(3) The extent to which the entity is oriented
5
toward working directly with poor women.
6
"(4) The extent to which the entity recovers its
7
cost of lending to the poor.
8
"(5) The extent to which the entity implements
9
a plan to become financially sustainable.
10
"(d) ADDITIONAL REQUIREMENT.-Assistance pro-
11 vided under this section may only be used to support
12 micro- and small enterprise programs and may not be used
13 to support programs not directly related to the purposes
14 described in subsection (b).
15
"(e) AUTHORIZATION OF APPROPRIATIONS.-
16
"(1) IN GENERAL.-(A) There are authorized
17
to be appropriated $1,500,000 for each of the fiscal
18
years 2000 and 2001 to carry out this section.
19
"(B) Amounts authorized to be appropriated
20
under subparagraph (A) shall be made available for
21
the subsidy cost, as defined in section 502(5) of the
22
Federal Credit Reform Act of 1990, for activities
23
under this section.
24
"(2) ADMINISTRATIVE EXPENSES.-There are
25
authorized to be appropriated $500,000 for each of
.S 1463 IS
17
1
the fiscal years 2000 and 2001 for the cost of ad-
2
ministrative expenses in carrying out this section.
3
"(3) RULE OF CONSTRUCTION.-Amounts au-
4
thorized to be appropriated under this subsection are
5
in addition to amounts otherwise available to carry
6
out this section."
7 SEC. 6. MICROFINANCE LOAN FACILITY.
8
Chapter 1 of part I of the Foreign Assistance Act
9 of 1961 (22 U.S.C. 2151 et seq.), as amended by this Act,
10 is further amended by adding the following new section:
11 "SEC. 132. UNITED STATES MICROFINANCE LOAN FACILITY.
12
"(a) ESTABLISHMENT.-The Administrator of the
13 United States Agency for International Development is
14 authorized to establish a United States Microfinance Loan
15 Facility (hereinafter in this section referred to as the Fa-
16 cility') to pool and manage the risk from natural disasters,
17 war or civil conflict, national financial crisis, or short-term
18 financial movements that threaten the long-term develop-
19 ment of United States-supported microfinance institu-
20 tions.
21
"(b) SUPERVISORY BOARD OF THE FACILITY.-(1)
22 The Facility shall be supervised by a board composed of
23 the following representatives appointed by the President
24 not later than 180 days after the date of the enactment
25 of Microenterprise for Self-Reliance Act of 1999:
.S 1463 IS
18
1
"(A) 1 representative from the Department of
2
the Treasury.
3
"(B) 1 representative from the Department of
4
State.
5
"(C) 1 representative from the United States
6
Agency for International Development.
7
"(D)(i) 2 United States citizens from United
8
States nongovernmental organizations that operate
9
United States-sponsored microfinance activities.
10
"(ii) Individuals described in clause (i) shall be
11
appointed for a term of 2 years.
12
"(2) The Administrator of the United States Agency
13 for International Development or his designee shall serve
14 as Chairman and an additional voting member of the
15 board.
16
"(c) DISBURSEMENTS.-(1) The board shall make
17 disbursements from the Facility to United States-spon-
18 sored microfinance institutions to prevent the bankruptcy
19 of such institutions caused by (A) natural disasters, (B)
20 national wars or civil conflict, or (C) national financial cri-
21 sis or other short term financial movements that threaten
22 the long-term development of United States-supported
23 microfinance institutions. Such disbursements shall be
24 made as concessional loans that are repaid maintaining
25 the real value of the loan to microfinance institutions that
.S 1463 IS
19
1 demonstrate the capacity to resume self-sustained oper-
2 ations within a reasonable time period. The Facility shall
3 provide for loan losses with each loan disbursed.
4
"(2) During each of the fiscal years 2001 and 2002,
5 funds may not be made available from the Facility until
6 15 days after notification of the availability has been pro-
7 vided to the congressional committees specified in section
8 634A of this Act in accordance with the procedures appli-
9 cable to reprogramming notifications under that section.
10
"(d) REPORT.-Not later than 60 days after the date
11 on which the last representative to the board is appointed
12 pursuant to subsection (b), the chairman of the board
13 shall prepare and submit to the appropriate congressional
14 committees a report on the policies, rules, and regulations
15 of the Facility.
16
"(e) FUNDING.-
17
"(1) AVAILABILITY OF FUNDS TO COVER SUB-
18
SIDY costs.-Of the funds made available to carry
19
out this part for fiscal years 2000 and 2001, up to
20
$5,000,000 may be made available to cover the sub-
21
sidy cost (as defined in section 502(5) of the Fed-
22
eral Credit Reform Act of 1990) to carry out this
23
section for each such fiscal year. In addition, of such
24
amount for each fiscal year, up to $
.S 1463 IS
20
1
may be made available for administrative expenses
2
in carrying out this section.
3
"(2) APPLICABLE AUTHORITIES.-The provi-
4
sions of section 107A(d) of the Foreign Assistance
5
Act of 1961 (as contained in section 306 of H.R.
6
1486, as reported to the House of Representatives
7
on May 9, 1997) shall be applicable to assistance
8
provided under this section, except that paragraphs
9
(5) through (8) thereof shall not apply.
10
"(3) RELATION TO OTHER AMOUNTS AVAIL-
11
ABLE.-Amounts made available under paragraph
12
(1) are in addition to amounts available to carry out
13
this section under any other provision of law.
14
"(f) DEFINITIONS.-In this section:
15
"(1) APPROPRIATE CONGRESSIONAL COMMIT-
16
TEES.-The term 'appropriate congressional com-
17
mittees' means the Committee on International Re-
18
lations of the House of Representatives and the
19
Committee on Foreign Relations of the Senate.
20
"(2) UNITED STATES-SUPPORTED MICRO-
21
FINANCE INSTITUTION.-The term 'United States-
22
supported microfinance institution' means a finan-
23
cial intermediary that has received funds made avail-
24
able under this Act for fiscal year 1980 or any sub-
25
sequent fiscal year.".
.S 1463 IS
21
1
SEC. 7. REPORT RELATING TO FUTURE DEVELOPMENT OF
2
MICROFINANCE INSTITUTIONS.
3
(a) REPORT.-Not later than 180 days after the date
4 of the enactment of this Act, the President, in consultation
5 with the Administrator of the United States Agency for
6 International Development, the Secretary of State, and
7 the Secretary of the Treasury, shall prepare and transmit
8 to the appropriate congressional committees a report on
9 the most cost-effective methods for increasing the access
10 of poor people to credit, other financial services, and re-
11 lated training.
12
(b) CONTENTS.-The report described in subsection
13 (a)-
14
(1) should include how the President, in con-
15
sultation with the Administrator of the United
16
States Agency for International Development, the
17
Secretary of State, and the Secretary of the Treas-
18
ury, will jointly develop a comprehensive strategy for
19
advancing the global microenterprise sector in a way
20
that maintains market principles while assuring that
21
the very poor, particularly women, obtain access to
22
financial services; and
23
(2) shall provide guidelines and recommenda-
24
tions for-
.S 1463 IS
22
1
(A) instruments to assist microenterprise
2
networks to develop multi-country and regional
3
microlending programs;
4
(B) technical assistance to foreign govern-
5
ments, foreign central banks and regulatory en-
6
tities to improve the policy environment for
7
microfinance institutions, and to strengthen the
8
capacity of supervisory bodies to supervise
9
microcredit institutions;
10
(C) the potential for federal chartering of
11
United States-based international microfinance
12
network institutions, including proposed legisla-
13
tion;
14
(D) instruments to increase investor con-
15
fidence in microcredit institutions which would
16
strengthen the long-term financial position of
17
the microcredit institutions and attract capital
18
from private sector entities and individuals,
19
such as a rating system for microcredit institu-
20
tions and local credit bureaus;
21
(E) an agenda for integrating microfinance
22
into United States foreign policy initiatives
23
seeking to develop and strengthen the global fi-
24
nance sector; and
.S 1463 IS
23
1
(F) innovative instruments to attract funds
2
from the capital markets, such as instruments
3
for leveraging funds from the local commercial
4
banking sector, and the securitization of
5
microloan portfolios.
6
(c) APPROPRIATE CONGRESSIONAL COMMITTEES DE-
7 FINED.-In this section, the term "appropriate congres-
8 sional committees" means the Committee on International
9 Relations of the House of Representatives and the Com-
10 mittee on Foreign Relations of the Senate.
11 SEC. 8. UNITED STATES AGENCY FOR INTERNATIONAL DE-
12
VELOPMENT AS GLOBAL LEADER AND COOR-
13
DINATOR OF BILATERAL AND MULTILATERAL
14
MICROENTERPRISE ASSISTANCE ACTIVITIES.
15
(a) FINDINGS AND POLICY.-The Congress finds and
16 declares that-
17
(1) the United States can provide leadership to
18
other bilateral and multilateral development agencies
19
as such agencies expand their support to the micro-
20
enterprise sector; and
21
(2) 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.
.S 1463 IS
24
1
(b) SENSE OF THE CONGRESS.-It is the sense of
2 the Congress that-
3
(1) the Administrator of the United States
4
Agency for International Development and the Sec-
5
retary of State should seek to support and strength-
6
en the effectiveness of microfinance activities in
7
United Nations agencies, such as the International
8
Fund for Agricultural Development (IFAD) and the
9
United Nations Development Program (UNDP),
10
which have provided key leadership in developing the
11
microenterprise sector; and
12
(2) the Secretary of the Treasury should in-
13
struct each United States Executive Director of the
14
Multilateral Development Banks (MDBs) to advo-
15
cate the development of a coherent and coordinated
16
strategy to support the microenterprise sector and
17
an increase of multilateral resource flows for the
18
purposes of building microenterprise retail and
19
wholesale intermediaries.
O
.S 1463 IS
Bill Summary & Status
Page 1 of 1
Bill Summary & Status for the 106th Congress
NEW SEARCH | HOME I HELP I ABOUT COSPONSORS
S.1463
SPONSOR: Sen DeWine, Michael (introduced 07/29/99)
COSPONSORS(11):
Sen Snowe. Olympia J. - 07/29/99
Sen Torricelli, Robert G. - 07/29/99
Sen Collins, Susan M. - 07/29/99
Sen Durbin, Richard J. - 07/29/99
Sen Feinstein, Dianne - 07/29/99
Sen Mikulski, Barbara A. - 07/29/99
Sen Schumer, Charles E. - 07/29/99 Sen Bingaman, Jeff - 07/29/99
Sen Chafee, John H. - 07/29/99
Sen Kennedy, Edward M. - 07/29/99
Sen Boxer, Barbara - 09/13/99
http://thomas.loc.gov/cgi-bin/bdquery/z?d106:SN01463:@@@P
10/7/99
IIB
106TH CONGRESS
1ST SESSION
H.R. 1143
IN THE SENATE OF THE UNITED STATES
APRIL 14, 1999
Received; read twice and referred to the Committee on Foreign Relations
AN ACT
To establish a program to provide assistance for programs
of credit and other financial services for microenterprises
in developing countries, and for other purposes.
1
Be it enacted by the Senate and House of Representa-
2 tives of the United States of America in Congress assembled,
2
1
SECTION 1. SHORT TITLE.
2
This Act may be cited as the "Microenterprise for
3 Self-Reliance Act of 1999".
4 SEC. 2. FINDINGS AND DECLARATIONS OF POLICY.
5
The Congress makes the following findings and dec-
6 larations:
7
(1) According to the World Bank, more than
8
1,200,000,000 people in the developing world, or
9
one-fifth of the world's population, subsist on less
10
than $1 a day.
11
(2) Over 32,000 of their children die each day
12
from largely preventable malnutrition and disease.
13
(3) (A) Women in poverty generally have larger
14
work loads and less access to educational and eco-
15
nomic opportunities than their male counterparts.
16
(B) Directly aiding the poorest of the poor, es-
17
pecially women, in the developing world has a posi-
18
tive effect not only on family incomes, but also on
19
child nutrition, health and education, as women in
20
particular reinvest income in their families.
21
(4)(A) The poor in the developing world, par-
22
ticularly women, generally lack stable employment
23
and social safety nets.
24
(B) Many turn to self-employment to generate
25
a substantial portion of their livelihood. In Africa,
HR 1143 RFS
3
1
over 80 percent of employment is generated in the
2
informal sector of the self-employed poor.
3
(C) These poor entrepreneurs are often trapped
4
in poverty because they cannot obtain credit at rea-
5
sonable rates to build their asset base or expand
6
their otherwise viable self-employment activities.
7
(D) Many of the poor are forced to pay interest
8
rates as high as 10 percent per day to money lend-
9
ers.
10
(5) (A) The poor are able to expand their in-
11
comes and their businesses dramatically when they
12
can access loans at reasonable interest rates.
13
(B) Through the development of self-sustaining
14
microfinance programs, poor people themselves can
15
lead the fight against hunger and poverty.
16
(6) (A) On February 2-4, 1997, a global Micro-
17
credit Summit was held in Washington, District of
18
Columbia, to launch a plan to expand access to cred-
19
it for self-employment and other financial and busi-
20
ness services to 100,000,000 of the world's poorest
21
families, especially the women of those families, by
22
2005.
23
(B) With an average family size of five, achiev-
24
ing this goal will mean that the benefits of micro-
HR 1143 RFS
4
1
finance will thereby reach nearly half of the world's
2
more than 1,000,000,000 absolute poor people.
3
(7)(A) Nongovernmental organizations, such as
4
those that comprise the Microenterprise Coalition
5
(such as the Grameen Bank (Bangladesh,) K-REP
6
(Kenya), and networks such as Accion International,
7
the Foundation for International Community Assist-
8
ance (FINCA), and the credit union movement) are
9
successful in lending directly to the very poor.
10
(B) Microfinance institutions such as BRAC
11
(Bangladesh), BancoSol (Bolivia), SEWA Bank
12
(India), and ACEP (Senegal) are regulated financial
13
institutions that can raise funds directly from the
14
local and international capital markets.
15
(8) (A) Microenterprise institutions not only re-
16
duce poverty, but also reduce the dependency on for-
17
eign assistance.
18
(B) Interest income on the credit portfolio is
19
used to pay recurring institutional costs, assuring
20
the long-term sustainability of development assist-
21
ance.
22
(9) Microfinance institutions leverage foreign
23
assistance resources because loans are recycled, gen-
24
erating new benefits to program participants.
HR 1143 RFS
5
1
(10) (A) The development of sustainable micro-
2
finance institutions that provide credit and training,
3
and mobilize domestic savings, are critical compo-
4
nents to a global strategy of poverty reduction and
5
broad-based economic development.
6
(B) In the efforts of the United States to lead
7
the development of a new global financial architec-
8
ture, microenterprise should play a vital role. The
9
recent shocks to international financial markets
10
demonstrate how the financial sector can shape the
11
destiny of nations. Microfinance can serve as a pow-
12
erful tool for building a more inclusive financial sec-
13
tor which serves the broad majority of the world's
14
population including the very poor and women and
15
thus generate more social stability and prosperity.
16
(C) Over the last two decades, the United
17
States has been a global leader in promoting the
18
global microenterprise sector, primarily through its
19
development assistance programs at the United
20
States Agency for International Development. Addi-
21
tionally, the United States Department of the Treas-
22
ury and the Department of State have used their au-
23
thority to promote microenterprise in the develop-
24
ment programs of international financial institutions
25
and the United Nations.
HR 1143 RFS
6
1
(11) (A) In 1994, the United States Agency for
2
International Development launched the "Micro-
3
enterprise Initiative" in partnership with the Con-
4
gress.
5
(B) The initiative committed to expanding
6
funding for the microenterprise programs of the
7
Agency, and set a goal that, by the end of fiscal year
8
1996, half of all microenterprise resources would
9
support programs and institutions that provide cred-
10
it to the poorest, with loans under $300.
11
(C) In order to achieve the goal of the micro-
12
credit summit, increased investment in microcredit
13
institutions serving the poorest will be critical.
14
(12) Providing the United States share of the
15
global investment needed to achieve the goal of the
16
microcredit summit will require only a small increase
17
in United States funding for international micro-
18
credit programs, with an increased focus on institu-
19
tions serving the poorest.
20
(13) (A) In order to reach tens of millions of the
21
poorest with microcredit, it is crucial to expand and
22
replicate successful microcredit institutions.
23
(B) These institutions need assistance in devel-
24
oping their institutional capacity to expand their
25
services and tap commercial sources of capital.
HR 1143 RFS
7
1
(14) Nongovernmental organizations have dem-
2
onstrated competence in developing networks of local
3
microfinance institutions and other assistance deliv-
4
ery mechanisms SO that they reach large numbers of
5
the very poor, and achieve financial sustainability.
6
(15) Recognizing that the United States Agency
7
for International Development has developed very ef-
8
fective partnerships with nongovernmental organiza-
9
tions, and that the Agency will have fewer missions
10
to carry out its work, the Agency should place pri-
11
ority on investing in those nongovernmental network
12
institutions that meet performance criteria through
13
the central funding mechanisms of the Agency.
14
(16) By expanding and replicating successful
15
microcredit institutions, it should be possible to cre-
16
ate a global infrastructure to provide financial serv-
17
ices to the world's poorest families.
18
(17) (A) The United States can provide leader-
19
ship to other bilateral and multilateral development
20
agencies as such agencies expand their support to
21
the microenterprise sector.
22
(B) The United States should seek to improve
23
coordination among G-7 countries in the support of
24
the microenterprise sector in order to leverage the
HR 1143 RFS
8
1
investment of the United States with that of other
2
donor nations.
3
(18) Through increased support for microenter-
4
prise, especially credit for the poorest, the United
5
States can continue to play a leadership role in the
6
global effort to expand financial services and oppor-
7
tunity to 100,000,000 of the poorest families on the
8
planet.
9
SEC. 3. PURPOSES.
10
The purposes of this Act are-
11
(1) to make microenterprise development an im-
12
portant element of United States foreign economic
13
policy and assistance;
14
(2) to provide for the continuation and expan-
15
sion of the commitment of the United States Agency
16
for International Development to the development of
17
microenterprise institutions as outlined in its 1994
18
Microenterprise Initiative;
19
(3) to support and develop the capacity of
20
United States and indigenous nongovernmental or-
21
ganization intermediaries to provide credit, savings,
22
training and technical services to microentre-
23
preneurs;
24
(4) to increase the amount of assistance de-
25
voted to credit activities designed to reach the poor-
HR 1143 RFS
9
1
est sector in developing countries, and to improve
2
the access of the poorest, particularly women, to
3
microenterprise credit in developing countries; and
4
(5) to encourage the United States Agency for
5
International Development to coordinate micro-
6
finance policy, in consultation with the Department
7
of the Treasury and the Department of State, and
8
to provide global leadership in promoting micro-
9
enterprise for the poorest among bilateral and multi-
10
lateral donors.
11
SEC. 4. MICROENTERPRISE DEVELOPMENT GRANT ASSIST-
12
ANCE.
13
Chapter 1 of part I of the Foreign Assistance Act
14 of 1961 (22 U.S.C. 2151 et seq.) is amended-
15
(1) by redesignating the second section 129 (as
16
added by section 4 of the Torture Victims Relief Act
17
of 1998 (Public Law 105-320)) as section 130; and
18
(2) by adding at the end the following new sec-
19
tion:
20 "SEC. 131. MICROENTERPRISE DEVELOPMENT GRANT AS-
21
SISTANCE.
22
"(a) FINDINGS AND POLICY.-The Congress finds
23 and declares that-
24
"(1) the development of microenterprise is a
25
vital factor in the stable growth of developing coun-
HR 1143 RFS
10
1
tries and in the development of free, open, and equi-
2
table international economic systems;
3
"(2) it is therefore in the best interest of the
4
United States to assist the development of micro-
5
enterprises in developing countries; and
6
"(3) the support of microenterprise can be
7
served by programs providing credit, savings, train-
8
ing, and technical assistance.
9
"(b) AUTHORIZATION.-(1) In carrying out this part,
10 the President is authorized to provide grant assistance for
11 programs to increase the availability of credit and other
12 services to microenterprises lacking full access to capital
13 and training through-
14
"(A) grants to microfinance institutions for the
15
purpose of expanding the availability of credit, sav-
16
ings, and other financial services to microentre-
17
preneurs;
18
"(B) training, technical assistance, and other
19
support for microenterprises to enable them to make
20
better use of credit, to better manage their enter-
21
prises, and to increase their income and build their
22
assets;
23
"(C) capacity building for microfinance institu-
24
tions in order to enable them to better meet the
25
credit and training needs of microentrepreneurs; and
HR 1143 RFS
11
1
"(D) policy and regulatory programs at the
2
country level that improve the environment for
3
microfinance institutions that serve the poor and
4
very poor.
5
"(2) Assistance authorized under paragraph (1) shall
6 be provided through organizations that have a capacity to
7 develop and implement microenterprise programs, includ-
8 ing particularly-
9
"(A) United States and indigenous private and
10
voluntary organizations;
11
"(B) United States and indigenous credit
12
unions and cooperative organizations;
13
"(C) other indigenous governmental and non-
14
governmental organizations; or
15
"(D) business development services, including
16
indigenous craft programs.
17
"(3) In carrying out sustainable poverty-focused pro-
18 grams under paragraph (1), 50 percent of all microenter-
19 prise resources shall be used for direct support of pro-
20 grams under this subsection through practitioner institu-
21 tions that provide credit and other financial services to
22 the poorest with loans of $300 or less in 1995 United
23 States dollars and can cover their costs of credit programs
24 with revenue from lending activities or that demonstrate
25 the capacity to do SO in a reasonable time period.
HR 1143 RFS
12
1
"(4) The President should continue support for cen-
2 tral mechanisms and missions that-
3
"(A) provide technical support for field mis-
4
sions;
5
"(B) strengthen the institutional development
6
of the intermediary organizations described in para-
7
graph (2);
8
"(C) share information relating to the provision
9
of assistance authorized under paragraph (1) be-
10
tween such field missions and intermediary organiza-
11
tions; and
12
"(D) support the development of nonprofit glob-
13
al microfinance networks, including credit union sys-
14
tems, that-
15
"(i) are able to deliver very small loans
16
through a vast grassroots infrastructure based
17
on market principles; and
18
"(ii) act as wholesale intermediaries pro-
19
viding a range of services to microfinance retail
20
institutions, including financing, technical as-
21
sistance, capacity building and safety and
22
soundness accreditation.
23
"(5) Assistance provided under this subsection may
24 only be used to support microenterprise programs and
HR 1143 RFS
13
1 may not be used to support programs not directly related
2 to the purposes described in paragraph (1).
3
"(c) MONITORING SYSTEM.-In order to maximize
4 the sustainable development impact of the assistance au-
5 thorized under subsection (a)(1), the Administrator of the
6 United States Agency for International Development shall
7 establish a monitoring system that-
8
"(1) establishes performance goals for such as-
9
sistance and expresses such goals in an objective and
10
quantifiable form, to the extent feasible;
11
"(2) establishes performance indicators to be
12
used in measuring or assessing the achievement of
13
the goals and objectives of such assistance;
14
"(3) provides a basis for recommendations for
15
adjustments to such assistance to enhance the sus-
16
tainable development impact of such assistance, par-
17
ticularly the impact of such assistance on the very
18
poor, particularly poor women; and
19
"(4) provides a basis for recommendations for
20
adjustments to measures for reaching the poorest of
21
the poor, including proposed legislation containing
22
amendments to improve paragraph (3).
23
"(d) AUTHORIZATION OF APPROPRIATIONS.-
24
"(1) IN GENERAL.-(A) There are authorized
25
to be appropriated $152,000,000 for fiscal year
HR 1143 RFS
14
1
2000 and $167,000,000 for fiscal year 2001 to carry
2
out this section.
3
"(B) Amounts appropriated pursuant to the au-
4
thorization of appropriations under subparagraph
5
(A) are authorized to remain available until ex-
6
pended.
7
"(2) RULE OF CONSTRUCTION.-Amounts au-
8
thorized to be appropriated under paragraph (1) are
9
in addition to amounts otherwise available to carry
10
out this section.".
11
SEC. 5. MICRO- AND SMALL ENTERPRISE DEVELOPMENT
12
CREDITS.
13
Section 108 of the Foreign Assistance Act of 1961
14 (22 U.S.C. 2151f) is amended to read as follows:
15 "SEC. 108. MICRO- AND SMALL ENTERPRISE DEVELOPMENT
16
CREDITS.
17
"(a) FINDINGS AND POLICY.-The Congress finds
18 and declares that-
19
"(1) the development of micro- and small enter-
20
prises are a vital factor in the stable growth of de-
21
veloping countries and in the development and sta-
22
bility of a free, open, and equitable international
23
economic system; and
24
"(2) it is, therefore, in the best interests of the
25
United States to assist the development of the enter-
HR 1143 RFS
15
1
prises of the poor in developing countries and to en-
2
gage the United States private sector in that proc-
3
ess.
4
"(b) PROGRAM.-To carry out the policy set forth in
5 subsection (a), the President is authorized to provide as-
6 sistance to increase the availability of credit to micro- and
7 small enterprises lacking full access to credit, including
8 through-
9
"(1) loans and guarantees to credit institutions
10
for the purpose of expanding the availability of cred-
11
it to micro- and small enterprises;
12
"(2) training programs for lenders in order to
13
enable them to better meet the credit needs of
14
microentrepreneurs; and
15
"(3) training programs for microentrepreneurs
16
in order to enable them to make better use of credit
17
and to better manage their enterprises.
18
"(c) ELIGIBILITY CRITERIA.-The Administrator of
19 the United States Agency for International Development
20 shall establish criteria for determining which entities de-
21 scribed in subsection (b) are eligible to carry out activities,
22 with respect to micro- and small enterprises, assisted
23 under this section. Such criteria may include the following:
HR 1143 RFS
16
1
"(1) The extent to which the recipients of credit
2
from the entity do not have access to the local for-
3
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 to the poor.
11
"(5) The extent to which the entity implements
12
a plan to become financially sustainable.
13
"(d) ADDITIONAL REQUIREMENT.-Assistance pro-
14 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) AUTHORIZATION OF APPROPRIATIONS.-
19
"(1) IN GENERAL.-(A) There are authorized
20
to be appropriated $1,500,000 for each of the fiscal
21
years 2000 and 2001 to carry out this section.
22
"(B) Amounts authorized to be appropriated
23
under subparagraph (A) shall be made available for
24
the subsidy cost, as defined in section 502(5) of the
HR 1143 RFS
17
1
Federal Credit Reform Act of 1990, for activities
2
under this section.
3
"(2) ADMINISTRATIVE EXPENSES.-There are
4
authorized to be appropriated $500,000 for each of
5
the fiscal years 2000 and 2001 for the cost of
6
administrative expenses in carrying out this section.
7
"(3) RULE OF CONSTRUCTION.-Amounts au-
8
thorized to be appropriated under this subsection are
9
in addition to amounts otherwise available to carry
10
out this section.".
11 SEC. 6. MICROFINANCE LOAN FACILITY.
12
Chapter 1 of part I of the Foreign Assistance Act
13 of 1961 (22 U.S.C. 2151 et seq.), as amended by this Act,
14 is further amended by adding the following new section:
15 "SEC. 132. UNITED STATES MICROFINANCE LOAN FACILITY.
16
"(a) ESTABLISHMENT-The Administrator of the
17 United States Agency for International Development is
18 authorized to establish a United States Microfinance Loan
19 Facility (hereinafter in this section referred to as the Fa-
20 cility') to pool and manage the risk from natural disasters,
21 war or civil conflict, national financial crisis, or short-term
22 financial movements that threaten the long-term develop-
23 ment of United States-supported microfinance institu-
24 tions.
HR 1143 RFS
18
1
"(b) SUPERVISORY BOARD OF THE FACILITY.-(1)
2 The Facility shall be supervised by a board composed of
3 the following representatives appointed by the President
4 not later than 180 days after the date of the enactment
5 of Microenterprise for Self-Reliance Act of 1999:
6
"(A) one representative from the Department of
7
the Treasury.
8
"(B) one representative from the Department
9
of State.
10
"(C) one representative from the United States
11
Agency for International Development.
12
"(D)(i) two United States citizens from United
13
States nongovernmental organizations that operate
14
United States-sponsored microfinance activities.
15
"(ii) Individuals described in clause (i) shall be
16
appointed for a term of 2 years.
17
"(2) The Administrator of the United States Agency
18 for International Development or his designee shall serve
19 as Chairman and an additional voting member of the
20 board.
21
"(c) DISBURSEMENTS.-(1) The board shall make
22 disbursements from the Facility to United States-spon-
23 sored microfinance institutions to prevent the bankruptcy
24 of such institutions caused by: (A) natural disasters, (B)
25 national wars or civil conflict, or (C) national financial cri-
HR 1143 RFS
19
1 sis or other short term financial movements that threaten
2 the long-term development of United States-supported
3 microfinance institutions. Such disbursements shall be
4 made as concessional loans that are repaid maintaining
5 the real value of the loan to microfinance institutions that
6 demonstrate the capacity to resume self-sustained oper-
7 ations within a reasonable time period. The Facility shall
8 provide for loan losses with each loan disbursed.
9
"(2) During each of the fiscal years 2001 and 2002,
10 funds may not be made available from the Facility until
11 15 days after notification of the availability has been pro-
12 vided to the congressional committees specified in section
13 634A of this Act in accordance with the procedures appli-
14 cable to reprogramming notifications under that section.
15
"(d) GENERAL PROVISIONS.-
16
"(1) POLICY PROVISIONS.-In providing the
17
credit assistance authorized by this section, the
18
board should apply, as appropriate, the policy provi-
19
sions in this part applicable to development assist-
20
ance activities.
21
"(2) DEFAULT AND PROCUREMENT PROVI-
22
SIONS.-
23
"(A) DEFAULT PROVISION.-The provi-
24
sions of section 620(q) of this Act, or any com-
25
parable provisions of law, shall not be construed
HR 1143 RFS
20
1
to prohibit assistance to a country in the event
2
that a private sector recipient of assistance fur-
3
nished under this section is in default in its
4
payment to the United States for the period
5
specified in such section.
6
"(B) PROCUREMENT PROVISION.-Assist-
7
ance may be provided under this section with-
8
out regard to section 604(a) of this Act.
9
"(3) TERMS AND CONDITIONS OF CREDIT AS-
10
SISTANCE.-(A) Credit assistance provided under
11
this section shall be offered on such terms and con-
12
ditions, including fees charged, as the board may de-
13
termine.
14
"(B) The principal amount of loans made or
15
guaranteed under this section in any fiscal year,
16
with respect to any single borrower, may not exceed
17
$30,000,000.
18
"(C) No payment may be made under any
19
guarantee issued under this section for any loss aris-
20
ing out of fraud or misrepresentation for which the
21
party seeking payment is responsible.
22
"(4) FULL FAITH AND CREDIT.-All guarantees
23
issued under this section shall constitute obligations,
24
in accordance with the terms of such guarantees, of
25
the United States of America and the full faith and
HR 1143 RFS
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1
credit of the United States of America is hereby
2
pledged for the full payment and performance of
3
such obligations to the extent of the guarantee.
4
"(e) REPORT.-Not later than 60 days after the date
5 on which the last representative to the board is appointed
6 pursuant to subsection (b), the chairman of the board
7 shall prepare and submit to the appropriate congressional
8 committees a report on the policies, rules, and regulations
9 of the Facility.
10
"(f) FUNDING.-(1)(A) Of the amounts made avail-
11 able to carry out this part for each of the fiscal years 2000
12 and 2001, up to $5,000,000 may be made available for-
13
"(i) the subsidy cost, as defined in section
14
502(5) of the Federal Credit Reform Act of 1990,
15
to carry out this section; and
16
"(ii) subject to subparagraph (B), the cost of
17
administrative expenses to carry out this section.
18
"(B) Of the amount made available under subpara-
19 graph (A) to carry out this section for a fiscal year, not
20 more than $500,000 may be made available for adminis-
21 trative expenses under subparagraph (A)(ii).
22
"(2) Amounts made available under paragraph (1)
23 are in addition to amounts available under any other pro-
24 vision of law to carry out this section.
25
"(g) DEFINITIONS.-In this section:
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1
"(1) APPROPRIATE CONGRESSIONAL COMMIT-
2
TEES.-The term 'appropriate congressional com-
3
mittees' means the Committee on International Re-
4
lations of the House of Representatives and the
5
Committee on Foreign Relations of the Senate.
6
"(2) UNITED STATES-SUPPORTED MICRO-
7
FINANCE INSTITUTION.-The term 'United States-
8
supported microfinance institution' means a finan-
9
cial intermediary that has received funds made avail-
10
able under this Act for fiscal year 1980 or any sub-
11
sequent fiscal year.".
12 SEC. 7. REPORT RELATING TO FUTURE DEVELOPMENT OF
13
MICROFINANCE INSTITUTIONS.
14
(a) REPORT.-Not later than 180 days after the date
15 of the enactment of this Act, the President, in consultation
16 with the Administrator of the United States Agency for
17 International Development, the Secretary of State, and
18 the Secretary of the Treasury, shall prepare and transmit
19 to the appropriate congressional committees a report on
20 the most cost-effective methods for increasing the access
21 of poor people to credit, other financial services, and re-
22 lated training.
23
(b) CONTENTS.-The report described in subsection
24 (a)-
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1
(1) should include how the President, in con-
2
sultation with the Administrator of the United
3
States Agency for International Development, the
4
Secretary of State, and the Secretary of the Treas-
5
ury, will jointly develop a comprehensive strategy for
6
advancing the global microenterprise sector in a way
7
that maintains market principles while assuring that
8
the very poor, particularly women, obtain access to
9
financial services; and
10
(2) shall provide guidelines and recommenda-
11
tions for-
12
(A) instruments to assist microenterprise
13
networks to develop multi-country and regional
14
microlending programs;
15
(B) technical assistance to foreign govern-
16
ments, foreign central banks and regulatory en-
17
tities to improve the policy environment for
18
microfinance institutions, and to strengthen the
19
capacity of supervisory bodies to supervise
20
microcredit institutions;
21
(C) the potential for federal chartering of
22
United States-based international microfinance
23
network institutions, including proposed legisla-
24
tion;
HR 1143 RFS
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1
(D) instruments to increase investor con-
2
fidence in microcredit institutions which would
3
strengthen the long-term financial position of
4
the microcredit institutions and attract capital
5
from private sector entities and individuals,
6
such as a rating system for microcredit institu-
7
tions and local credit bureaus;
8
(E) an agenda for integrating microfinance
9
into United States foreign policy initiatives
10
seeking to develop and strengthen the global fi-
11
nance sector; and
12
(F) innovative instruments to attract funds
13
from the capital markets, such as instruments
14
for leveraging funds from the local commercial
15
banking sector, and the securitization of
16
microloan portfolios.
17
(c) APPROPRIATE CONGRESSIONAL COMMITTEES DE-
18 FINED.-In this section, the term "appropriate congres-
19 sional committees" means the Committee on International
20 Relations of the House of Representatives and the Com-
21 mittee on Foreign Relations of the Senate.
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1
SEC. 8. UNITED STATES AGENCY FOR INTERNATIONAL DE-
2
VELOPMENT AS GLOBAL LEADER AND COOR-
3
DINATOR OF BILATERAL AND MULTILATERAL
4
MICROENTERPRISE ASSISTANCE ACTIVITIES.
5
(a) FINDINGS AND POLICY.-The Congress finds and
6 declares 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 micro-
10
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 THE CONGRESS.-It is the sense of
17 the Congress that-
18
(1) the Administrator of the United States
19
Agency for International Development and the Sec-
20
retary of State should seek to support and strength-
21
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 in-
2
struct each United States Executive Director of the
3
Multilateral Development Banks (MDBs) to advo-
4
cate the development of a coherent and coordinated
5
strategy to support the microenterprise sector and
6
an increase of multilateral resource flows for the
7
purposes of building microenterprise retail and
8
wholesale intermediaries.
Passed the House of Representatives April 13, 1999.
Attest:
JEFF TRANDAHL,
Clerk.
HR 1143 RFS
FINCA INTERNATIONAL
FOUNDATION FOR INTERNATIONAL COMMUNITY ASSISTANCE
1101 14th Street, NW
11th Floor
Washington, DC 20005
202/682-1510 fax: 202/682-1535 e-mail: [email protected]
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ATION