A prior subpart VI, consisting of sections 2211 to 2213, related to Alliance for Progress, prior to repeal by
Congress finds and declares the following:
(1) Access to financial services and the development of micro, small, and medium-sized enterprises are vital factors in the stable growth of developing countries, in the development of free, open, and equitable international economic systems, and in the economic empowerment of the poor, especially women.
(2) It is therefore in the best interest of the United States to facilitate access to financial services and assist the development of micro, small, and medium-sized enterprises in developing countries, particularly enterprises owned, managed, and controlled by women.
(3) Access to financial services and the development of micro, small, and medium-sized enterprises can be supported by programs providing credit, savings, training, technical assistance, business development services, and other financial services.
(4) Given the relatively high percentage of populations living in rural areas of developing countries, and the combined high incidence of poverty in rural areas and growing income inequality between rural and urban markets, micro, small, and medium-sized enterprise programs should target both rural and urban poor.
(5) Microenterprise programs have been successful and should continue and be expanded to empower vulnerable women in the developing world. The Agency should work to ensure that recipients of development assistance for micro, small, and medium-sized enterprises under this subpart communicate and work with nongovernmental organizations and government organizations to identify and assist victims of trafficking as provided for in
(6) Given that microenterprise programs have had some success in empowering disenfranchised groups such as women, development assistance for micro, small, and medium-sized enterprises should also target populations disenfranchised due to race or ethnicity in countries where a strong relationship between poverty and race or ethnicity has been demonstrated.
(
A prior section 2211,
2019—Par. (1).
Par. (2).
Par. (3).
Par. (4).
Par. (5).
Par. (6).
"(1) Congress has demonstrated its support for microenterprise development assistance programs through the enactment of two comprehensive microenterprise laws:
"(A) The Microenterprise for Self-Reliance Act of 2000 (title I of
"(B)
"(2) The report on the effectiveness of the United States Agency for International Development's microfinance program, prepared by the Consultative Group to Assist the Poor, rated the Agency in the top tier of the 17 donors in this field.
"(3) The Comptroller General, in a report dated November 2003, found that the United States Agency for International Development has met some, but not all, of the key objectives of such microenterprise development assistance programs.
"(4) The Comptroller General's report found, among other things, the following:
"(A) Microenterprise development assistance generally can help alleviate some impacts of poverty, improve income levels and quality of life for borrowers and provide poor individuals, workers, and their families with an important coping mechanism.
"(B) Microenterprise development assistance programs of the United States Agency for International Development have encouraged women's participation in microfinance projects and, according to data of the Agency, women have comprised two-thirds or more of the micro-loan clients in Agency-funded microenterprise projects since 1997.
"(5)(A) The Comptroller General's report recommends that the Administrator of the United States Agency for International Development review the Agency's 'microenterprise results reporting' system with the goal of ensuring that its annual reporting is complete and accurate.
"(B) Specifically, the Administrator should review and reconsider the methodologies used for the collection, analysis, and reporting of data on annual spending targets, outreach to the very poor, sustainability of microfinance institutions, and the contribution of Agency's funding to the institutions it supports."
"(1) where applicable, should ensure that microenterprise development assistance provided under such title is matched by recipients with an equal amount of assistance from non-United States Government sources, including private donations, multilateral funding, commercial and concessional borrowing, savings, and program income;
"(2) should include in the report required by section 258 of the Foreign Assistance Act of 1961 [
"(3) should ensure that recipients of microenterprise development assistance under such title do not expend an unreasonably large percentage of such assistance on administrative costs;
"(4) should not use recipients of microenterprise development assistance under such title to carry out critical management functions of the Agency, including functions such as strategy development or overall management of programs in a country; and
"(5) should consult with the appropriate congressional committees with respect to the implementation of title VI of
The President is authorized to provide assistance on a non-reimbursable basis for programs in developing countries to increase the availability of credit, including the use of innovative credit scoring models, savings, financial technology, financial literacy, education, insurance, property rights, and other services to micro, small, and medium-sized enterprise clients lacking full access to capital, training, technical assistance, and business development services, through—
(1) assistance for the purpose of expanding the availability of credit, savings, and other financial and non-financial services to micro, small, and medium-sized enterprise clients, particularly clients owned, managed, and controlled by women;
(2) assistance for the purpose of training, technical assistance, and business development services for micro, small, and medium-sized enterprises to enable them to make better use of credit, to better manage their enterprises, to conduct market analysis and product development for expanding domestic and international sales, particularly to United States markets, and to increase their income and build their assets;
(3) capacity-building for financial intermediaries in order to enable them to better meet the credit, savings, and training needs of micro, small, and medium-sized enterprises;
(4) policy, regulatory programs, and research at the country level that improve the environment for micro, small, and medium-sized enterprises, financial intermediaries, and capital markets and institutions that serve the poor and very poor, especially women;
(5) assistance for the purpose of promoting the economic empowerment of women, including through increased access to financial resources and improving property rights, inheritance rights, and other legal protections; and
(6) assistance for the purpose of scaling up evidence-based graduation approaches, which include targeting the very poor and households in ultra-poverty, consumption support, promotion of savings, financial literacy, skills training, and asset transfers.
There is authorized to be established within the Agency an office to support the Agency's efforts to broaden and deepen local financial markets, expand access to appropriate financial products and services, and support the development of micro, small and medium-sized enterprises. The Office shall be headed by a Director who shall possess technical expertise and ability to offer leadership in the field of financial sector development.
Assistance under this section shall emphasize the use of implementing partner organizations that best meet the requirements of subparagraph (C).
In order to ensure that assistance under this subpart is distributed effectively and efficiently, the office shall provide coordination and support for field-implemented programs, including through targeted core support for micro, small, and medium-sized enterprises and local financial markets.
Assistance under this section shall meet high standards of efficiency, cost-effectiveness, and sustainability, particularly by protecting the use and funding of local organizations in countries in which the Agency invests, and shall especially provide the greatest possible resources to the poor and very poor, especially women. When administering assistance under this section, the Administrator shall—
(i) take into consideration the percentage of funds a provider of assistance intends to expend on administrative costs;
(ii) take all appropriate steps to ensure that the provider of assistance keeps administrative costs as low as practicable to ensure the maximum amount of funds are used for directly assisting microfinance and microenterprise clients, for establishing sustainable microfinance and microenterprise institutions, or for advancing the microenterprise development field; and
(iii) give preference to proposals from providers of assistance that are the most technically competitive and have a reasonable allocation to overhead and administrative costs.
In carrying out sustainable poverty-focused programs under subsection (a)—
(1) 50 percent of all micro, small, and medium-sized enterprise resources shall be targeted to activities that reach the very poor; and
(2) 50 percent of all small and medium-sized enterprise resources shall be targeted to activities that reach enterprises owned, managed, and controlled by women.
(
A prior section 252 of
2019—Subsec. (a).
Subsec. (a)(1).
Subsec. (a)(2).
Subsec. (a)(3).
Subsec. (a)(4).
Subsec. (a)(5), (6).
Subsec. (b)(1).
Subsec. (b)(2)(B).
"(i)
"(ii)
Subsec. (b)(2)(C).
Subsec. (b)(3).
Subsec. (c).
In order to maximize the sustainable development impact of assistance authorized under
The requirements referred to in subsection (a) are the following:
(1) The monitoring system shall include performance goals, including goals on a gender disaggregated basis, such as improvements in employment, access to financial services, education, enterprise development, earnings and control over income, and property and land rights, for the assistance and expresses such goals in an objective and quantifiable form, to the extent feasible.
(2) The monitoring system shall incorporate Agency planning and reporting processes and indicators to measure or assess the achievement of the performance goals described in paragraph (1) and the objectives of the assistance authorized under
(3) The monitoring system provides a basis for recommendations for adjustments to the assistance to enhance the sustainability and the impact of the assistance, particularly the impact of such assistance on the very poor, particularly poor women.
(
A prior section 253 of
2019—Subsec. (b)(1).
Subsec. (b)(2).
Subsec. (b)(4).
The Administrator of the Agency, in consultation with financial intermediaries and other appropriate organizations, should have in place at least 1 method for implementing partners to use to assess poverty levels of their current incoming or prospective clients.
(
2019—
Notwithstanding any other provision of law, amounts made available for development assistance for micro, small, and medium-sized enterprises under any provision of law other than this subpart may be provided to further the purposes of this subpart. To the extent assistance described in the preceding sentence is provided in accordance with such sentence, the Administrator of the Agency shall include, as part of the report required under
(
2019—
Congress finds and declares that—
(1) the development of micro, small, and medium-sized enterprises is a vital factor in the stable growth of developing countries and in the development and stability of a free, open, and equitable international economic system; and
(2) it is, therefore, in the best interests of the United States to assist the access to financial services and the development of micro, small, and medium-sized enterprises in developing countries and to engage the United States private sector in that process.
To carry out the policy set forth in subsection (a), the President is authorized to provide assistance to increase the availability of financial services to micro, small, and medium-sized enterprises and households lacking full access to credit and other financial services, including through—
(1) loans and guarantees to financial intermediaries for the purpose of expanding the availability of savings and credit to poor and low-income households;
(2) training programs for financial intermediaries in order to enable them to better meet the financial services needs of their clients; and
(3) training programs for clients in order to enable them to make better use of credit, increase their financial literacy, and to better manage their enterprises to improve their quality of life.
The Administrator of the Agency shall establish criteria for determining which financial intermediaries described in subsection (b)(1) are eligible to carry out activities, with respect to micro, small, and medium-sized enterprises and households, assisted under this section. Such criteria may include the following:
(1) The extent to which the recipients of financial services from the entity do not have access to the local formal financial sector.
(2) The extent to which the recipients of financial services from the entity are among the poorest people in the country.
(3) The extent to which the entity is oriented toward working directly with poor women.
(4) The extent to which the entity recovers its cost of lending.
(5) The extent to which the entity implements a plan to become financially sustainable.
Assistance provided under this section may only be used to support programs for micro, small, and medium-sized enterprises and households and may not be used to support programs not directly related to the purposes described in subsection (b).
Assistance may be provided under this section without regard to
Of the amounts authorized to be available to carry out subchapter I of this chapter, there are authorized to be available such sums as may be necessary for each of the fiscal years 2005 through 2009 to carry out this section.
Amounts authorized to be available under paragraph (1) shall be made available to cover the subsidy cost, as defined in
(
Section was formerly classified to
Section 256, formerly 108, of
A prior section 2212,
2019—
Subsec. (a)(1).
Subsec. (a)(2).
Subsec. (b).
Subsec. (b)(1), (2).
Subsec. (c).
Subsec. (d).
2004—Subsec. (c).
Subsec. (f)(1).
2003—
Subsec. (a)(2).
Subsec. (b).
"(1) loans and guarantees to credit institutions for the purpose of expanding the availability of credit to micro- and small enterprises;
"(2) training programs for lenders in order to enable them to better meet the credit needs of microentrepreneurs; and
"(3) training programs for microentrepreneurs in order to enable them to make better use of credit and to better manage their enterprises."
Subsec. (c).
Subsec. (c)(1), (2).
Subsec. (d).
Subsec. (f)(1).
2000—
1988—Subsec. (i).
1985—Subsec. (b).
References to subchapter I of this chapter are deemed to include parts IV (§2346 et seq.), VI (§2348 et seq.), and VIII (§2349aa et seq.) of subchapter II of this chapter, and references to subchapter II are deemed to exclude such parts. See section 202(b) of
Amendment by
"(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 economic opportunities than their male counterparts.
"(B) Directly aiding the poorest of the poor, especially women, in the developing world has a positive 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, particularly 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 reasonable 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 lenders.
"(5)(A) The poor are able to expand their incomes 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 Microcredit Summit was held in Washington, District of Columbia, to launch a plan to expand access to credit for self-employment and other financial and business services to 100,000,000 of the world's poorest families, especially the women of those families, by 2005. While this scale of outreach may not be achievable in this short time-period, the realization of this goal could dramatically alter the face of global poverty.
"(B) With an average family size of five, achieving this goal will mean that the benefits of microfinance 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 Assistance (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 reduce poverty, but also reduce the dependency on foreign assistance.
"(B) Interest income on the credit portfolio is used to pay recurring institutional costs, assuring the long-term sustainability of development assistance.
"(9) Microfinance institutions leverage foreign assistance resources because loans are recycled, generating new benefits to program participants.
"(10)(A) The development of sustainable microfinance institutions that provide credit and training, and mobilize domestic savings, is a critical component 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 architecture, 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 powerful tool for building a more inclusive financial sector 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. Additionally, the Department of the Treasury and the Department of State have used their authority to promote microenterprise in the development programs of international financial institutions and the United Nations.
"(11)(A) In 1994, the United States Agency for International Development launched the 'Microenterprise Initiative' in partnership with the Congress.
"(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, one-half of all microenterprise resources would support programs and institutions that provide credit to the poorest, with loans under $300.
"(C) In order to achieve the goal of the microcredit summit, increased investment in microfinance 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 microcredit programs, with an increased focus on institutions 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 microfinance institutions.
"(B) These institutions need assistance in developing their institutional capacity to expand their services and tap commercial sources of capital.
"(14) Nongovernmental organizations have demonstrated competence in developing networks of local microfinance institutions and other assistance delivery 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 effective partnerships with nongovernmental organizations, and that the Agency will have fewer missions overseas to carry out its work, the Agency should place priority 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 microfinance institutions, it should be possible to create a global infrastructure to provide financial services to the world's poorest families.
"(17)(A) The United States can provide leadership 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 investment of the United States with that of other donor nations.
"(18) Through increased support for microenterprise, especially credit for the poorest, the United States can continue to play a leadership role in the global effort to expand financial services and opportunity to 100,000,000 of the poorest families on the planet."
"(1) to make microenterprise development an important element of United States foreign economic policy and assistance;
"(2) to provide for the continuation and expansion of the commitment of the United States Agency for International Development to the development of microenterprise institutions as outlined in its 1994 Microenterprise Initiative;
"(3) to support and develop the capacity of United States and indigenous nongovernmental organization intermediaries to provide credit, savings, training, technical assistance, and business development services to microenterprise households;
"(4) to emphasize financial services and substantially increase the amount of assistance devoted to both financial services and complementary business development services designed to reach the poorest people in developing countries, particularly women;
"(5) to encourage the United States Agency for International Development to coordinate microenterprise policy, in consultation with the Department of the Treasury and the Department of State, and to provide global leadership among bilateral and multilateral donors in promoting microenterprise for the very poor; and
"(6) to ensure that in the implementation of this title at least 50 percent of all microenterprise assistance under this title, and the amendments made under this title, shall be targeted to the very poor."
"(1)
"(2)
"(3)
"(4)
"(5)
"(A) living in the bottom 50 percent below the poverty line established by the national government of the country in which those individuals live; or
"(B) living on the equivalent of less than $1 per day."
For delegation of functions of President under this section, see Ex. Ord. No. 12163, Sept. 29, 1979, 44 F.R. 56673, as amended, set out as a note under
The President is authorized to establish a United States Microfinance Loan Facility (in this section referred to as the "Facility") to pool and manage the risk from natural disasters, war or civil conflict, national financial crisis, or short-term financial movements that threaten the long-term development of United States-supported financial intermediaries.
The Administrator shall make disbursements from the Facility to United States-supported financial intermediaries to prevent the bankruptcy of such institutions caused by—
(A) natural disasters;
(B) national wars or civil conflict; or
(C) national financial crisis or other short-term financial movements that threaten the long-term development of United States-supported financial intermediaries.
Assistance under this section shall be in the form of loans or loan guarantees for financial intermediaries that demonstrate the capacity to resume self-sustained operations within a reasonable time period.
During each of the fiscal years 2005 through 2009, funds may not be made available from the Facility until 15 days after notification of the proposed availability of the funds has been provided to the congressional committees specified in
In providing the credit assistance authorized by this section, the Administrator should apply, as appropriate, the policy provisions in subchapter I of this chapter that are applicable to development assistance activities.
The provisions of
Assistance may be provided under this section without regard to
Credit assistance provided under this section shall be offered on such terms and conditions, including fees charged, as the Administrator may determine.
The principal amount of loans made or guaranteed under this section in any fiscal year, with respect to any single event, may not exceed $30,000,000.
No payment may be made under any guarantee issued under this section for any loss arising out of fraud or misrepresentation for which the party seeking payment is responsible.
All guarantees issued under this section shall constitute obligations, in accordance with the terms of such guarantees, of the United States of America, and the full faith and credit of the United States of America is hereby pledged for the full payment and performance of such obligations to the extent of the guarantee.
Of the amounts made available to carry out subchapter I of this chapter for each of the fiscal years 2005 through 2009, such sums as may be necessary may be made available for—
(A) the subsidy cost, as defined in
(B) the administrative costs to carry out this section.
Amounts made available under paragraph (1) are in addition to amounts available under any other provision of law to carry out this section.
(
Section was formerly classified to
A prior section 2213,
2019—Subsec. (a).
Subsec. (b)(1).
Subsec. (b)(2).
2004—Subsec. (b)(3). Pub. L. 108—484, §5(c)(2)(A), substituted "2005 through 2009" for "2001 and 2002".
Subsec.(d)(1). Pub. L. 108—484, §5(c)(2)(B), substituted "for each of the fiscal years 2005 through 2009, such sums as may be necessary" for "for the fiscal year 2001, up to $5,000,000".
Subsec. (e).
References to subchapter I of this chapter are deemed to include parts IV (§2346 et seq.), VI (§2348 et seq.), and VIII (§2349aa et seq.) of subchapter II of this chapter, and references to subchapter II are deemed to exclude such parts. See section 202(b) of
Not later than June 30, 2006, and each June 30 thereafter, the Administrator of the Agency, acting through the Director of the office, shall submit to the appropriate congressional committees a report that contains a detailed description of the implementation of this subpart for the previous fiscal year.
To the extent practicable, the report submitted under subsection (a) should contain the following:
(1) Information about assistance provided under
(A) the amount of each grant or other form of assistance;
(B) the name and type of each intermediary and implementing partner organization receiving assistance;
(C) the name of each country receiving assistance; and
(D) the methodology used to ensure compliance with the targeted assistance requirements under subsection (c) of such section.
(2) The percentage of assistance provided under
(3) The estimated number of individuals that received assistance under
(4) The results of the monitoring system required under
(5) Information about any method in place to assess poverty levels under
The report required by this section shall be made available to the public on the Internet website of the Agency.
(
2019—Subsec. (b).
In this subpart:
The term "Administrator" means the Administrator of the Agency.
The term "Agency" means the United States Agency for International Development.
The term "appropriate congressional committees" means the Committee on Foreign Affairs of the House of Representatives and the Committee on Foreign Relations of the Senate.
The term "business development services" means support for the growth of micro, small, and medium-sized enterprises through training, technical assistance, marketing assistance, improved production technologies, and other related services.
The term "Director" means the Director of the office.
The term "implementing partner organization" means an entity eligible to receive assistance under this subpart which is—
(A) a United States or an indigenous private voluntary organization;
(B) a United States or an indigenous credit union;
(C) a United States or an indigenous cooperative organization;
(D) an indigenous governmental or nongovernmental organization;
(E) a micro, small, or medium-sized enterprise institution;
(F) a financial intermediary; or
(G) a practitioner institution.
The term "micro, small, and medium-sized enterprise institution" means an entity that provides services, including finance, training, or business development services, for micro, small, and medium-sized enterprises in foreign countries.
The term "financial intermediary" means the entity that acts as the intermediary between parties in a financial transaction, such as a bank, credit union, investment fund, a village savings and loan group, or an institution that provides financial services to a micro, small, or medium-sized enterprise.
The term "office" means the office established under
The term "practitioner institution" means a not-for-profit entity, a financial intermediary, an information and communications technology firm with a mobile money platform, a village and savings loan group, or any other entity that provides financial or business development services authorized under section 252 that benefits micro, small, and medium-sized enterprise clients.
The term "private voluntary organization" means a not-for-profit entity that—
(A) engages in and supports activities of an economic or social development or humanitarian nature for citizens in foreign countries; and
(B) is incorporated as such under the laws of the United States, including any of its states, territories or the District of Columbia, or of a foreign country.
The term "United States-supported financial intermediary" means a financial intermediary that has received funds made available under subchapter I of this chapter for fiscal year 1980 or any subsequent fiscal year.
The term "very poor" means those individuals—
(A) living in the bottom 50 percent below the poverty line established by the national government of the country in which those individuals live; or
(B) living below the international poverty line (as defined by the International Bank for Reconstruction and Development and the International Development Association (collectively referred to as the 'World Bank')).
(
2019—Par. (3).
Par. (4).
Par. (6)(E).
Par. (6)(F).
Pars. (7), (8).
Par. (9).
Par. (10).
Par. (11).
Par. (12).
Pars. (13), (14).
References to subchapter I of this chapter are deemed to include parts IV (§2346 et seq.), VI (§2348 et seq.), and VIII (§2349aa et seq.) of subchapter II of this chapter, and references to subchapter II are deemed to exclude such parts. See section 202(b) of
Committee on International Relations of House of Representatives changed to Committee on Foreign Affairs of House of Representatives by House Resolution No. 6, One Hundred Tenth Congress, Jan. 5, 2007.