[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6957 Introduced in House (IH)]







110th CONGRESS
  2d Session
                                H. R. 6957

  To amend the Foreign Assistance Act of 1961 to provide funding for 
          capacity-building to microfinance service providers.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 18, 2008

  Mr. Boozman (for himself and Mr. Meeks of New York) introduced the 
 following bill; which was referred to the Committee on Foreign Affairs

_______________________________________________________________________

                                 A BILL


 
  To amend the Foreign Assistance Act of 1961 to provide funding for 
          capacity-building to microfinance service providers.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Microfinance Capacity-Building Act 
of 2008''.

SEC. 2. FINDINGS AND DECLARATION OF POLICY.

    Congress finds and declares the following:
            (1) Microfinance is considered one of the great success 
        stories of United States foreign aid because of its ability to 
        reach the poor, especially women, with programs that have a 
        high impact and are highly sustainable.
            (2) Studies conducted in India, Kenya, and the Philippines 
        found average annual returns on microbusiness investments 
        ranging from 177 to 847 percent, demonstrating the enormous 
        capacity the poor have to work and save their way out of 
        poverty.
            (3) An estimated 113 million clients are currently being 
        served with microcredit, and the Microcredit Summit Campaign 
        has set a goal of reaching 175 million of the world's poorest 
        families by 2015.
            (4) The lack of human capital is widely recognized as the 
        single greatest constraint to the growth of leading 
        microfinance networks and other practitioners providing direct 
        financial services to the poor.
            (5) According to some industry estimates, in order to meet 
        the anticipated demand for microfinance, the industry will have 
        to hire 1.6 million new loan officers in Africa, Asia, Latin 
        America, and the Near East, assuming a loan officer to client 
        ratio of 1 to 300.
            (6) Conservative estimates state that $2 billion in private 
        investment capital is currently being leveraged for 
        microfinance. Substantially more could be mobilized and 
        invested in some of the world's poorest countries but remains 
        untapped due to the lack of institutional capacity and 
        qualified leaders.
            (7) The lack of human capacity is particularly severe in 
        sub-Saharan Africa due to the relative immaturity of the 
        microfinance industry, a small pool of trained and certified 
        bankers and finance experts, and the prevalence of HIV/AIDS.

SEC. 3. SENSE OF CONGRESS.

    It is the sense of Congress that the microfinance capacity-building 
activities supported by subsection (d) of section 252 of the Foreign 
Assistance Act of 1961 (22 U.S.C. 2211a), as added by section 4 of this 
Act, is intended to drive innovation and provide comprehensive 
solutions that address the lack of human capital in developing 
countries, particularly in sub-Saharan Africa. Such activities should 
provide a regional and sub-regional approach to maximizing economies of 
scale and should focus predominately on educating and training African 
nationals in order to build capacity in the microfinance industry in 
developing countries, particularly in sub-Saharan African countries.

SEC. 4. CAPACITY-BUILDING FOR MICROFINANCE SERVICE PROVIDERS.

    (a) In General.--Section 252 of the Foreign Assistance Act of 1961 
(22 U.S.C. 2211a) is amended by adding at the end the following:
    ``(d) Capacity Building for Microfinance Service Providers.--
            ``(1) Authorization.--In carrying out the programs 
        authorized under subsection (a), the Administrator shall 
        establish a grant program to provide assistance on a non-
        reimbursable basis to private, non-profit networks of 
        microfinance institutions that provide direct financial 
        services, which may include credit of all types, savings, 
        insurance, remittances and cash transfers, to the poor and very 
        poor in developing countries.
            ``(2) Activities supported.--Assistance provided under 
        paragraph (1) shall, to the maximum extent practicable, be used 
        to carry out traditional and nontraditional education and 
        training for individuals working in the microfinance industry 
        in developing countries, particularly in sub-Saharan African 
        countries. Such education and training may include curriculum 
        development, distance learning, job shadowing, mentoring, 
        training of trainers, scholarships for undergraduate and 
        graduate courses, and purchasing and leasing equipment, 
        including software and other technology, to support 
        activities--
                    ``(A) to improve the effectiveness of institutional 
                governance structures and quality of senior management, 
                including directors, chief executive officers, chief 
                operating officers, chief financial officers, and other 
                senior staff;
                    ``(B) to strengthen the knowledge and ability of 
                senior and middle managers to establish and implement 
                effective financial and nonfinancial services, 
                including the development and implementation of 
                products and services, risk management, human 
                resources, accounting, process analysis and auditing 
                systems;
                    ``(C) to improve the technical knowledge and 
                ability of microfinance employees, which may include 
                branch managers, loan officer supervisors, loan 
                officers, tellers, insurance agents, and other field 
                staff, regarding delivery of financial services to 
                clients;
                    ``(D) to improve the collection and transmission of 
                training, procedures, and best practices among 
                financial institutions and employees; and
                    ``(E) to identify new staff and ensure the 
                recruitment and retention of trained staff members 
                through the development of incentive programs and 
                educational components.
            ``(3) Eligibility.--To be eligible for assistance under 
        paragraph (1), a network of microfinance institutions described 
        in paragraph (1) shall--
                    ``(A) deliver direct financial services to the poor 
                and very poor in at least five developing countries 
                through a network of local microfinance institutions 
                that are owned or formally affiliated and accredited by 
                the network in accordance with its financial and social 
                performance standards;
                    ``(B) operate as a private nonprofit organization; 
                and
                    ``(C) agree to match, in cash contributions from 
                non-federal sources and on a 2 dollar-to-1 dollar 
                basis, the amount of the grant provided to the network 
                under paragraph (1).
            ``(4) Considerations.--In making a determination to provide 
        assistance under paragraph (1), the Administrator shall ensure 
        that participating networks of microfinance institutions 
        include--
                    ``(A) not less than 50 percent women in the 
                activities supported under this subsection; and
                    ``(B) 100 percent individuals from developing 
                countries in the activities supported under this 
                subsection.
            ``(5) Preference.--In making a determination to provide 
        assistance under paragraph (1), the Administrator shall give 
        preference to networks of microfinance institutions that 
        promote the inclusion of women in senior management positions.
            ``(6) Reporting and evaluation.--(A) The Administrator, 
        acting through the Director, shall establish a reporting and 
        evaluation system to assess the effectiveness of recipient 
        microfinance institutions in carrying out activities under 
        paragraph (2).
            ``(B) A recipient microfinance institution shall report on 
        the number of (i) individuals educated and trained, (ii) 
        certificates awarded, (iii) university credit units awarded, 
        (iv) degrees awarded, and (v) education and training curriculum 
        units created.
            ``(C) Data reported by recipient microfinance institutions 
        under clauses (i) through (iv) of subparagraph (B) shall be 
        disaggregated by sex, country of origin, country of employment, 
        and job title or position held.
            ``(7) Authorization of appropriations.--
                    ``(A) In general.--To carry out this subsection, 
                there are authorized to be appropriated--
                            ``(i) $6,000,000 for fiscal year 2009;
                            ``(ii) $12,000,000 for fiscal year 2010;
                            ``(iii) $15,000,000 for fiscal year 2011;
                            ``(iv) $12,000,000 for fiscal year 2012; 
                        and
                            ``(v) $5,000,000 for fiscal year 2013.
                    ``(B) Minimum allocation.--Not less than 60 percent 
                of the funds appropriated pursuant to the authorization 
                of appropriations under subparagraph (A) for a fiscal 
                year shall be used to support capacity-building 
                activities in sub-Saharan Africa.''.
    (b) Conforming Amendment.--Such section is further amended in the 
heading by adding at the end before the period the following: ``; 
capacity building for microfinance service providers in sub-saharan 
africa''.
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