{
  "id": "RL30932",
  "type": "CRS Report",
  "typeId": "REPORTS",
  "number": "RL30932",
  "active": false,
  "source": "EveryCRSReport.com",
  "versions": [
    {
      "source": "EveryCRSReport.com",
      "id": 100363,
      "date": "2001-04-12",
      "retrieved": "2016-05-24T20:25:04.828941",
      "title": "Microenterprise and U.S. Foreign Assistance",
      "summary": "Microenterprises - businesses operated by the poorest of entrepreneurs - have been targets of\nU.S.\nForeign assistance for many years. Microentrepreneurs face a number of obstacles to improving their\nproductivity and standard of living, including a lack of accounting and managerial skills and an\ninability to obtain financial services - savings and credit. While more research is needed, existing\nstudies have found positive impacts on business and household income, education, and employment,\nespecially among women, when assistance is provided to give better access to savings and credit. \nIn FY1999, roughly $154 million was used by the Agency for International Development (USAID)\nto assist microentrepreneurs in U.S. aid recipient countries.\n Foreign aid has played a major role in the development of microfinance institutions that have\nemerged in large numbers since the late 1970s. Many of these institutions seek to operate on\nbusiness principles, charging a rate of interest that might cover costs. Because the poor cannot\nprovide collateral, these institutions often require entrepreneurs to form solidarity groups to take on\neach other's obligations. Their repayment rate is often above 97%.\n Although many other bilateral and multilateral donors have contributed to the development of\nmicrofinance institutions, USAID has been the leader in financing and developing programs\nsupporting microenterprise. Congress has strongly endorsed this effort in appropriation bills, by\ndirecting a specific level of funding in the FY1988-1992 period and recommending support in report\nlanguage thereafter. Some Members collaborated with USAID in the development of a\nMicroenterprise Initiative announced in 1994. In October 2000, the 106th Congress approved the\nMicroenterprise for Self-Reliance Act of 2000, authorizing microenterprise support programs ( P.L.\n106-309 ).\n In FY1999 more than two thirds of USAID funding for microenterprise went toward technical\nassistance and capital for microfinance institutions. Fifty-eight percent of such funds supported poor\npeople who received poverty loans - mostly loans in amounts of $300 or less, and 69% of clients\nwere women. \n Congress has authorized a $155 million funding level for FY2001 and 2002, but achieving that\ngoal depends in part on the overall foreign aid account as well as amounts made available for\neconomic growth objectives versus other priorities sharing the same pot of funds. Some argue that\nfunds should be dedicated to \"poverty lending,\" i.e., aimed at the very poorest of the poor\nmicroentrepreneurs by keeping loan levels low. Others argue that the most positive benefits from\nmicrofinance accrue to those near the poverty line, not well below it. A number of challenges face\nmicroenterprise implementors, including making programs sustainable while broadening their\noutreach to the poorest, commercialization of microfinance, use of new technologies, and the impact\nof crises and HIV/AIDS.",
      "type": "CRS Report",
      "typeId": "REPORTS",
      "active": false,
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          "url": "http://www.crs.gov/Reports/pdf/RL30932",
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      "topics": []
    }
  ],
  "topics": [
    "Foreign Affairs"
  ]
}