§2152a. Microenterprise development grant assistance

(a) Findings and policy

Congress finds and declares that-

(1) the development of microenterprise is a vital factor in the stable growth of developing countries and in the development of free, open, and equitable international economic systems;

(2) it is therefore in the best interest of the United States to assist the development of microenterprises in developing countries; and

(3) the support of microenterprise can be served by programs providing credit, savings, training, technical assistance, and business development services.

(b) Authorization

(1) In general

In carrying out subchapter I of this chapter, the President is authorized to provide grant assistance for programs to increase the availability of credit and other services to microenterprises lacking full access to capital training, technical assistance, and business development services, through-

(A) grants to microfinance institutions for the purpose of expanding the availability of credit, savings, and other financial services to microentrepreneurs;

(B) grants to microenterprise institutions for the purpose of training, technical assistance, and business development services for microenterprises to enable them to make better use of credit, to better manage their enterprises, and to increase their income and build their assets;

(C) capacity-building for microenterprise institutions in order to enable them to better meet the credit and training needs of microentrepreneurs; and

(D) policy and regulatory programs at the country level that improve the environment for microentrepreneurs and microenterprise institutions that serve the poor and very poor.

(2) Implementation

Assistance authorized under paragraph (1)(A) and (B) shall be provided through organizations that have a capacity to develop and implement microenterprise programs, including particularly-

(A) United States and indigenous private and voluntary organizations;

(B) United States and indigenous credit unions and cooperative organizations; or

(C) other indigenous governmental and nongovernmental organizations.

(3) Targeted assistance

In carrying out sustainable poverty-focused programs under paragraph (1), 50 percent of all microenterprise resources shall be targeted to very poor entrepreneurs, defined as those living in the bottom 50 percent below the poverty line as established by the national government of the country. Specifically, such resources shall be used for-

(A) direct support of programs under this subsection through practitioner institutions that-

(i) provide credit and other financial services to entrepreneurs who are very poor, with loans in 1995 United States dollars of-

(I) $1,000 or less in the Europe and Eurasia region;

(II) $400 or less in the Latin America region; and

(III) $300 or less in the rest of the world; and

(ii) can cover their costs in a reasonable time period; or

(B) demand-driven business development programs that achieve reasonable cost recovery that are provided to clients holding poverty loans (as defined by the regional poverty loan limitations in subparagraph (A)(i)), whether they are provided by microfinance institutions or by specialized business development services providers.

(4) Support for central mechanisms

The President should continue support for central mechanisms and missions, as appropriate, that-

(A) provide technical support for field missions;

(B) strengthen the institutional development of the intermediary organizations described in paragraph (2);

(C) share information relating to the provision of assistance authorized under paragraph (1) between such field missions and intermediary organizations; and

(D) support the development of nonprofit global microfinance networks, including credit union systems, that-

(i) are able to deliver very small loans through a significant grassroots infrastructure based on market principles; and

(ii) act as wholesale intermediaries providing a range of services to microfinance retail institutions, including financing, technical assistance, capacity-building, and safety and soundness accreditation.

(5) Limitation

Assistance provided under this subsection may only be used to support microenterprise programs and may not be used to support programs not directly related to the purposes described in paragraph (1).

(c) Monitoring system

In order to maximize the sustainable development impact of the assistance authorized under subsection (b)(1) of this section, the Administrator of the agency primarily responsible for administering subchapter I of this chapter shall establish a monitoring system that-

(1) establishes performance goals for such assistance and expresses such goals in an objective and quantifiable form, to the extent feasible;

(2) establishes performance indicators to be used in measuring or assessing the achievement of the goals and objectives of such assistance;

(3) provides a basis for recommendations for adjustments to such assistance to enhance the sustainable development impact of such assistance, particularly the impact of such assistance on the very poor, particularly poor women; and

(4) provides a basis for recommendations for adjustments to measures for reaching the poorest of the poor, including proposed legislation containing amendments to enhance the sustainable development impact of such assistance, as described in paragraph (3).

(d) Level of assistance

Of the funds made available under subchapter I of this chapter, the FREEDOM Support Act, and the Support for East European Democracy (SEED) Act of 1989 [22 U.S.C. 5401 et seq.], including local currencies derived from such funds, there are authorized to be available $155,000,000 for each of the fiscal years 2001 and 2002, to carry out this section.

(e) Definitions

In this section:

(1) Business development services

The term "business development services" means support for the growth of microenterprises through training, technical assistance, marketing assistance, improved production technologies, and other services.

(2) Microenterprise institution

The term "microenterprise institution" means an institution that provides services, including microfinance, training, or business development services, for microentrepreneurs.

(3) Microfinance institution

The term "microfinance institution" means an institution that directly provides, or works to expand, the availability of credit, savings, and other financial services to microentrepreneurs.

(4) Practitioner institution

The term "practitioner institution" means any institution that provides services, including microfinance, training, or business development services, for microentrepreneurs, or provides assistance to microenterprise institutions.

(Pub. L. 87–195, pt. I, §131, as added Pub. L. 106–309, title I, §105, Oct. 17, 2000, 114 Stat. 1082 .)

References in Text

The FREEDOM Support Act, referred to in subsec. (d), is Pub. L. 102–511, Oct. 24, 1992, 106 Stat. 3320 , as amended, also known as the Freedom for Russia and Emerging Eurasian Democracies and Open Markets Support Act of 1992. For complete classification of this Act to the Code, see Short Title note set out under section 5801 of this title and Tables.

The Support for East European Democracy (SEED) Act of 1989, referred to in subsec. (d), is Pub. L. 101–179, Nov. 28, 1989, 103 Stat. 1298 , as amended, which is classified principally to chapter 63 (§5401 et seq.) of this title. For complete classification of this Act to the Code, see Short Title note set out under section 5401 of this title and Tables.

References to Subchapter I Deemed To Include Certain Parts of Subchapter II

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 Pub. L. 92–226, set out as a note under section 2346 of this title, and sections 2348c and 2349aa–5 of this title.

Delegation of Functions

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 section 2381 of this title.

Section Referred to in Other Sections

This section is referred to in section 2151f of this title.