USC Subpart VI

USC Subpart VI
in effect

22 U.S.C. § 2211 Findings and policy

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 section 7104(a)(1) of this title and women who are victims of or susceptible to other forms of exploitation and violence. (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.

22 U.S.C. § 2211a Authorization; implementation; targeted assistance

(a) AuthorizationThe 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. (b) Implementation(1) In generalThere 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. (2) Additional provisions(A) Use of implementing partner organizationsAssistance under this section shall emphasize the use of implementing partner organizations that best meet the requirements of subparagraph (C). (B) Use of central funding mechanismsIn 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. (C) Efficiency and cost-effectivenessAssistance 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. (c) Targeted assistanceIn 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.

22 U.S.C. § 2211b Monitoring system

(a) In generalIn order to maximize the sustainable development impact of assistance authorized under section 2211a(a) of this title, the Administrator of the Agency, acting through the Director of the office, shall strengthen its monitoring system to meet the requirements of subsection (b). (b) RequirementsThe 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 section 2211a of this title. (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.

22 U.S.C. § 2211c Poverty measurement methods

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.

22 U.S.C. § 2211d Additional authorities

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 section 2214 of this title, a detailed description of such assistance.

22 U.S.C. § 2212 Development credits for micro, small, and medium-sized enterprises

(a) Findings and policyCongress 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. (b) ProgramTo 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. (c) Eligibility criteriaThe 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. (d) Additional requirementAssistance 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). (e) Procurement provisionAssistance may be provided under this section without regard to section 2354(a) of this title. (f) Availability of funds(1) In generalOf 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. (2) Coverage of subsidy costsAmounts authorized to be available under paragraph (1) shall be made available to cover the subsidy cost, as defined in section 661a(5) of title 2, for activities under this section.

22 U.S.C. § 2213 United States Microfinance Loan Facility

(a) EstablishmentThe 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. (b) Disbursements(1) In generalThe 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. (2) Form of assistanceAssistance 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. (3) Congressional notification proceduresDuring 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 section 2394–1 of this title in accordance with the procedures applicable to reprogramming notifications under that section. (c) General provisions(1) Policy provisionsIn 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. (2) Default and procurement provisions(A) Default provisionThe provisions of section 2370(q) of this title, or any comparable provision of law, shall not be construed to prohibit assistance to a country in the event that a private sector recipient of assistance furnished under this section is in default in its payment to the United States for the period specified in such section. (B) Procurement provisionAssistance may be provided under this section without regard to section 2354(a) of this title. (3) Terms and conditions of credit assistance(A) In generalCredit assistance provided under this section shall be offered on such terms and conditions, including fees charged, as the Administrator may determine. (B) Limitation on principal amount of financingThe 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. (C) ExceptionNo 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. (4) Full faith and creditAll 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. (d) Funding(1) Allocation of fundsOf 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 section 661a(5) of title 2, to carry out this section; and (B) the administrative costs to carry out this section. (2) Relation to other fundingAmounts made available under paragraph (1) are in addition to amounts available under any other provision of law to carry out this section.

22 U.S.C. § 2214 Report

(a) In generalNot 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. (b) ContentsTo the extent practicable, the report submitted under subsection (a) should contain the following:(1) Information about assistance provided under section 2211a of this title, including—(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 section 2211a of this title, disaggregated by income level, including for the very poor, and by gender. (3) The estimated number of individuals that received assistance under section 2211a of this title, disaggregated by income level (or an appropriate proxy for income level, including for the very poor), by gender, and by type of assistance. (4) The results of the monitoring system required under section 2211b of this title. (5) Information about any method in place to assess poverty levels under section 2211c of this title. (c) Availability to publicThe report required by this section shall be made available to the public on the Internet website of the Agency.

22 U.S.C. § 2214a Definitions

In this subpart: (1) AdministratorThe term “Administrator” means the Administrator of the Agency. (2) AgencyThe term “Agency” means the United States Agency for International Development. (3) Appropriate congressional committeesThe term “appropriate congressional committees” means the Committee on Foreign Affairs of the House of Representatives and the Committee on Foreign Relations of the Senate. (4) Business development servicesThe 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. (5) DirectorThe term “Director” means the Director of the office. (6) Implementing partner organizationThe 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. (7) Micro, small, and medium-sized enterprise institutionThe 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. (8) Financial intermediaryThe 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. (9) OfficeThe term “office” means the office established under section 2211a(b)(1) of this title. (10) Practitioner institutionThe 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. (11) Private voluntary organizationThe 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. (12) United States-supported financial intermediaryThe 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. (13) Very poorThe 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’)).

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