[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4073 Reported in Senate (RS)]

                                                       Calendar No. 689
107th CONGRESS
  2d Session
                                H. R. 4073


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              June 5, 2002

Received; read twice and referred to the Committee on Foreign Relations

                            October 8, 2002

                Reported by Mr. Biden, with an amendment
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

_______________________________________________________________________

                                 AN ACT


 
  To amend the Microenterprise for Self-Reliance Act of 2000 and the 
 Foreign Assistance Act of 1961 to increase assistance for the poorest 
    people in developing countries under microenterprise assistance 
           programs under those Acts, and for other purposes.

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

<DELETED>SECTION 1. AMENDMENTS TO THE MICROENTERPRISE FOR SELF-RELIANCE 
              ACT OF 2000.</DELETED>

<DELETED>    (a) Purposes.--Section 103 of the Microenterprise for 
Self-Reliance Act of 2000 (Public Law 106-309) is amended--</DELETED>
        <DELETED>    (1) in paragraph (3), by striking 
        ``microentrepreneurs'' and inserting ``microenterprise 
        households'';</DELETED>
        <DELETED>    (2) in paragraph (4), by striking ``and'' at the 
        end;</DELETED>
        <DELETED>    (3) in paragraph (5)--</DELETED>
                <DELETED>    (A) by striking ``microfinance policy'' 
                and inserting ``microenterprise policy'';</DELETED>
                <DELETED>    (B) by striking ``the poorest of the 
                poor'' and inserting ``the very poor''; and</DELETED>
                <DELETED>    (C) by striking the period at the end and 
                inserting ``; and''; and</DELETED>
        <DELETED>    (4) by adding at the end the following:</DELETED>
        <DELETED>    ``(6) to encourage the United States Agency for 
        International Development to develop, assess, and implement 
        effective outreach methods and tools to ensure that all 
        microenterprise assistance authorized under this title, and the 
        amendments made by this title, is used to assist the greatest 
        absolute number of economically viable clients among the very 
        poor, and that at least 50 percent of all microenterprise 
        assistance authorized under this title, and the amendments made 
        under this title, is used in support of programs or lines of 
        service that target the very poor.''.</DELETED>
<DELETED>    (b) Definitions.--Section 104 of such Act is amended--
</DELETED>
        <DELETED>    (1) in paragraph (2), by striking ``for 
        microentrepreneurs'' and inserting ``to microentrepreneurs and 
        their households''; and</DELETED>
        <DELETED>    (2) by adding at the end the following:</DELETED>
        <DELETED>    ``(5) Very poor; poorest people in developing 
        countries.--The terms `very poor' and `poorest people in 
        developing countries' mean those persons living either in the 
        bottom 50 percent below the poverty line as established by the 
        national government of the country or on less than the 
        equivalent of $1 per day.''.</DELETED>

<DELETED>SEC. 2. AMENDMENTS TO THE MICRO- AND SMALL ENTERPRISE 
              DEVELOPMENT CREDITS PROGRAM UNDER THE FOREIGN ASSISTANCE 
              ACT OF 1961.</DELETED>

<DELETED>    (a) Findings and Policy.--Section 108(a)(2) of the Foreign 
Assistance Act of 1961 (22 U.S.C. 2151f(a)(2)) is amended by striking 
``the development of the enterprises of the poor'' and inserting ``the 
access to financial services and the development of 
microenterprises''.</DELETED>
<DELETED>    (b) Program.--Section 108(b) of such Act (22 U.S.C. 
2151f(b)) is amended to read as follows:</DELETED>
<DELETED>    ``(b) Program.--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 microenterprise 
households lacking full access to credit, including through--</DELETED>
        <DELETED>    ``(1) loans and guarantees to microfinance 
        institutions for the purpose of expanding the availability of 
        savings and credit to poor and low-income households;</DELETED>
        <DELETED>    ``(2) training programs for microfinance 
        institutions in order to enable them to better meet the 
        financial services needs of their clients; and</DELETED>
        <DELETED>    ``(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.''.</DELETED>
<DELETED>    (c) Eligibility Criteria.--Section 108(c) of such Act (22 
U.S.C. 2151f(c)) is amended--</DELETED>
        <DELETED>    (1) in the first sentence of the matter preceding 
        paragraph (1)--</DELETED>
                <DELETED>    (A) by striking ``credit institutions'' 
                and inserting ``microfinance institutions''; 
                and</DELETED>
                <DELETED>    (B) by striking ``micro- and small 
                enterprises'' and inserting ``microenterprise 
                households''; and</DELETED>
        <DELETED>    (2) in paragraphs (1) and (2), by striking 
        ``credit'' each place it appears and inserting ``financial 
        services''.</DELETED>
<DELETED>    (d) Additional Requirement.--Section 108(d) of such Act 
(22 U.S.C. 2151f(d)) is amended by striking ``micro- and small 
enterprise programs'' and inserting ``programs for microenterprise 
households''.</DELETED>
<DELETED>    (e) Availability of Funds.--Section 108(f)(1) of such Act 
(22 U.S.C. 2151f(f)(1)) is amended by striking ``for each of fiscal 
years 2001 and 2002'' and inserting ``for each of fiscal years 2001 
through 2004''.</DELETED>
<DELETED>    (f) Conforming Amendment.--Section 108 of such Act (22 
U.S.C. 2151f) is amended in the heading to read as follows:</DELETED>

<DELETED>``SEC. 108. MICROENTERPRISE DEVELOPMENT CREDITS.''.</DELETED>

<DELETED>SEC. 3. AMENDMENTS TO THE MICROENTERPRISE DEVELOPMENT GRANT 
              ASSISTANCE PROGRAM UNDER THE FOREIGN ASSISTANCE ACT OF 
              1961.</DELETED>

<DELETED>    (a) Findings and Policy.--Section 131(a) of the Foreign 
Assistance Act of 1961 (22 U.S.C. 2152a(a)) is amended to read as 
follows:</DELETED>
<DELETED>    ``(a) Findings and Policy.--Congress finds and declares 
that--</DELETED>
        <DELETED>    ``(1) access to financial services and the 
        development of microenterprise are vital factors in the stable 
        growth of developing countries and in the development of free, 
        open, and equitable international economic systems;</DELETED>
        <DELETED>    ``(2) it is therefore in the best interest of the 
        United States to facilitate access to financial services and 
        assist the development of microenterprise in developing 
        countries;</DELETED>
        <DELETED>    ``(3) access to financial services and the 
        development of microenterprises can be supported by programs 
        providing credit, savings, training, technical assistance, 
        business development services, and other financial and non-
        financial services; and</DELETED>
        <DELETED>    ``(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, 
        microenterprise programs should target both rural and urban 
        poor.''.</DELETED>
<DELETED>    (b) Authorization.--Section 131(b) of such Act (22 U.S.C. 
2152a(b)) is amended--</DELETED>
        <DELETED>    (1) in paragraph (3)--</DELETED>
                <DELETED>    (A) in the first sentence of the matter 
                preceding subparagraph (A), by striking ``targeted to 
                very poor entrepreneurs'' and all that follows and 
                inserting ``used in support of programs or lines of 
                service under which 50 percent or more of the incoming 
                or prospective clients are initially very poor.''; 
                and</DELETED>
                <DELETED>    (B) in subparagraph (A)(i) , by striking 
                ``entrepreneurs'' and inserting ``clients''; 
                and</DELETED>
        <DELETED>    (2) in paragraph (4)(D)--</DELETED>
                <DELETED>    (A) in clause (i), by striking ``very 
                small loans'' and inserting ``financial services to 
                poor entrepreneurs''; and</DELETED>
                <DELETED>    (B) in clause (ii), by striking 
                ``microfinance'' and inserting 
                ``microenterprise''.</DELETED>
<DELETED>    (c) Monitoring System.--Section 131(c) of such Act (22 
U.S.C. 2152a(c)) is amended by striking paragraph (4) and inserting the 
following:</DELETED>
        <DELETED>    ``(4) adopts the widespread use of proven and 
        effective poverty assessment tools to successfully identify the 
        very poor and ensure that they receive needed microenterprise 
        credits, loans, and assistance.''</DELETED>
<DELETED>    (d) Development and Application of Poverty Measurement 
Methods.--Section 131 of such Act (22 U.S.C. 2152a) is amended--
</DELETED>
        <DELETED>    (1) by redesignating subsections (d) and (e) as 
        subsections (e) and (f), respectively; and</DELETED>
        <DELETED>    (2) by inserting after subsection (c) the 
        following:</DELETED>
<DELETED>    ``(d) Development and Certification of Poverty Measurement 
Methods; Application of Methods.--</DELETED>
        <DELETED>    ``(1) Development and certification.--(A) The 
        Administrator of the United States Agency for International 
        Development, in consultation with appropriate microfinance 
        institutions, microenterprise institutions, and other 
        appropriate entities shall develop no fewer than two low-cost 
        methods for measuring the poverty levels of the current or 
        prospective clients of microenterprise organizations for 
        purposes of assistance under this section. In developing such 
        methods, the Administrator shall give consideration to methods 
        already in use by practitioner institutions.</DELETED>
        <DELETED>    ``(B) The Administrator shall field-test the 
        methods developed under this paragraph, and as part of the 
        testing, institutions and programs may use these methods on a 
        voluntary basis to demonstrate their ability to reach the very 
        poor.</DELETED>
        <DELETED>    ``(C) Not later than October 1, 2004, the 
        Administrator shall, from among the low-cost poverty 
        measurement methods developed under this paragraph, certify no 
        fewer than two of such methods as approved methods for 
        measuring the poverty levels of the current or prospective 
        clients of microenterprise organizations for purposes of 
        assistance under this section.</DELETED>
        <DELETED>    ``(2) Application.--Beginning on and after October 
        1, 2004, assistance furnished under this section to a program 
        or to a line of service within an institution shall qualify, in 
        whole or in part, as targeted assistance to the very poor if 
        one or more of the measurement methods approved under paragraph 
        (1), or one or more of the measurement methods approved in 
        accordance with paragraph (1) after October 1, 2004, verifies 
        that at least 50 percent of the incoming or prospective clients 
        of the program or line of service are initially among the very 
        poor.''.</DELETED>
<DELETED>    (e) Level of Assistance.--Section 131(e) of such Act, as 
redesignated by subsection (d), is amended by inserting ``and 
$175,000,000 for fiscal year 2003 and $200,000,000 for fiscal year 
2004'' after ``fiscal years 2001 and 2002''.</DELETED>
<DELETED>    (f) Definitions.--Section 131(f) of such Act, as 
redesignated by subsection (d), is amended by adding at the end the 
following:</DELETED>
        <DELETED>    ``(5) Very poor; poorest people in developing 
        countries.--The terms `very poor' and `poorest people in 
        developing countries' mean those persons living either in the 
        bottom 50 percent below the poverty line as established by the 
        national government of the country or on less than the 
        equivalent of $1 per day.''.</DELETED>

<DELETED>SEC. 4. REPORT TO CONGRESS.</DELETED>

<DELETED>    Not later than July 1, 2004, the Administrator of the 
United States Agency for International Development shall submit to 
Congress a report that contains--</DELETED>
        <DELETED>    (1) a description of the interim poverty 
        measurement methods developed and implemented pursuant to 
        section 131(d)(1) of the Foreign Assistance Act of 1961, as 
        added by section 3(d);</DELETED>
        <DELETED>    (2) an analysis of the results of the application 
        of such interim poverty measurement methods to sustainable 
        poverty-focused programs under such section; and</DELETED>
        <DELETED>    (3) a description of the proposed final poverty 
        measurement methods to be implemented beginning on October 1, 
        2004, in accordance with section 131(d)(2) of such Act, as 
        added by section 3(d).</DELETED>

SECTION 1. AMENDMENTS TO THE MICROENTERPRISE FOR SELF-RELIANCE ACT OF 
              2000.

    (a) Purposes.--Section 103 of the Microenterprise for Self-Reliance 
Act of 2000 (Public Law 106-309) is amended--
            (1) in paragraph (3), by striking ``microentrepreneurs'' 
        and inserting ``microenterprise households'';
            (2) in paragraph (4), by striking ``and'' at the end;
            (3) in paragraph (5)--
                    (A) by striking ``microfinance policy'' and 
                inserting ``microenterprise policy'';
                    (B) by striking ``the poorest of the poor'' and 
                inserting ``the very poor''; and
                    (C) by striking the period at the end and inserting 
                ``; and''; and
            (4) by adding at the end the following:
            ``(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.''.
    (b) Definitions.--Section 104 of such Act is amended--
            (1) in paragraph (2), by striking ``for 
        microentrepreneurs'' and inserting ``to microentrepreneurs and 
        their households''; and
            (2) by adding at the end the following:
            ``(5) Very poor.--The term `very poor' means 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 on the equivalent of less than $1 per 
                day.''.

SEC. 2. AMENDMENTS TO THE MICRO- AND SMALL ENTERPRISE DEVELOPMENT 
              CREDITS PROGRAM UNDER THE FOREIGN ASSISTANCE ACT OF 1961.

    (a) Findings and Policy.--Section 108(a)(2) of the Foreign 
Assistance Act of 1961 (22 U.S.C. 2151f(a)(2)) is amended by striking 
``the development of the enterprises of the poor'' and inserting ``the 
access to financial services and the development of microenterprises''.
    (b) Program.--Section 108(b) of such Act (22 U.S.C. 2151f(b)) is 
amended to read as follows:
    ``(b) Program.--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 microenterprise households 
lacking full access to credit, including through--
            ``(1) loans and guarantees to microfinance institutions for 
        the purpose of expanding the availability of savings and credit 
        to poor and low-income households;
            ``(2) training programs for microfinance institutions 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 Criteria.--Section 108(c) of such Act (22 U.S.C. 
2151f(c)) is amended--
            (1) in the first sentence of the matter preceding paragraph 
        (1)--
                    (A) by striking ``credit institutions'' and 
                inserting ``microfinance institutions''; and
                    (B) by striking ``micro- and small enterprises'' 
                and inserting ``microenterprise households''; and
            (2) in paragraphs (1) and (2), by striking ``credit'' each 
        place it appears and inserting ``financial services''.
    (d) Additional Requirement.--Section 108(d) of such Act (22 U.S.C. 
2151f(d)) is amended by striking ``micro- and small enterprise 
programs'' and inserting ``programs for microenterprise households''.
    (e) Availability of Funds.--Section 108(f)(1) of such Act (22 
U.S.C. 2151f(f)(1)) is amended by striking ``for each of fiscal years 
2001 and 2002'' and inserting ``for each of fiscal years 2001 through 
2004''.
    (f) Conforming Amendment.--Section 108 of such Act (22 U.S.C. 
2151f) is amended in the heading to read as follows:

``SEC. 108. MICROENTERPRISE DEVELOPMENT CREDITS.''.

SEC. 3. AMENDMENTS TO THE MICROENTERPRISE DEVELOPMENT GRANT ASSISTANCE 
              PROGRAM UNDER THE FOREIGN ASSISTANCE ACT OF 1961.

    (a) Findings and Policy.--Section 131(a) of the Foreign Assistance 
Act of 1961 (22 U.S.C. 2152a(a)) is amended to read as follows:
    ``(a) Findings and Policy.--Congress finds and declares that--
            ``(1) access to financial services and the development of 
        microenterprise are vital factors 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 facilitate access to financial services and assist 
        the development of microenterprise in developing countries;
            ``(3) access to financial services and the development of 
        microenterprises can be supported by programs providing credit, 
        savings, training, technical assistance, business development 
        services, and other financial and non-financial services; and
            ``(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, microenterprise 
        programs should target both rural and urban poor.''.
    (b) Authorization.--Section 131(b) of such Act (22 U.S.C. 2152a(b)) 
is amended--
            (1) in paragraph (3)(A)(i), by striking ``entrepreneurs'' 
        and inserting ``clients''; and
            (2) in paragraph (4)(D)--
                    (A) in clause (i), by striking ``very small loans'' 
                and inserting ``financial services to poor 
                entrepreneurs''; and
                    (B) in clause (ii), by striking ``microfinance'' 
                and inserting ``microenterprise''.
    (c) Monitoring System.--Section 131(c) of such Act (22 U.S.C. 
2152a(c)) is amended by striking paragraph (4) and inserting the 
following:
            ``(4) adopts the widespread use of proven and effective 
        poverty assessment tools to successfully identify the very poor 
        and ensure that they receive needed microenterprise loans, 
        savings, and assistance.''.
    (d) Development and Application of Poverty Measurement Methods.--
Section 131 of such Act (22 U.S.C. 2152a) is amended--
            (1) by redesignating subsections (d) and (e) as subsections 
        (e) and (f), respectively; and
            (2) by inserting after subsection (c) the following:
    ``(d) Development and Certification of Poverty Measurement Methods; 
Application of Methods.--
            ``(1) Development and certification.--(A) The Administrator 
        of the United States Agency for International Development, in 
        consultation with microenterprise institutions and other 
        appropriate organizations, shall develop no fewer than two low-
        cost methods for partner institutions to use to assess the 
        poverty levels of their current or prospective clients. The 
        United States Agency for International Development shall 
        develop poverty indicators that correlate with the 
        circumstances of the very poor.
            ``(B) The Administrator shall field-test the methods 
        developed under subparagraph (A). As part of the testing, 
        institutions and programs may use the methods on a voluntary 
        basis to demonstrate their ability to reach the very poor.
            ``(C) Not later than October 1, 2004, the Administrator 
        shall, from among the low-cost poverty measurement methods 
        developed under subparagraph (A), certify no fewer than two 
        such methods as approved methods for measuring the poverty 
        levels of current or prospective clients of microenterprise 
        institutions for purposes of assistance under this section.
            ``(2) Application.--The Administrator shall require that, 
        with reasonable exceptions, all organizations applying for 
        microenterprise assistance under this Act use one of the 
        certified methods, beginning no later than October 1, 2005, to 
        determine and report the poverty levels of current or 
        prospective clients.''.
    (e) Level of Assistance.--Section 131(e) of such Act, as 
redesignated by subsection (d), is amended by inserting ``and 
$175,000,000 for fiscal year 2003 and $200,000,000 for fiscal year 
2004'' after ``fiscal years 2001 and 2002''.
    (f) Definitions.--Section 131(f) of such Act, as redesignated by 
subsection (d), is amended by adding at the end the following:
            ``(5) Very poor.--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 on less than the equivalent of $1 per 
                day.''.

SEC. 4. REPORT TO CONGRESS.

    (a) In General.--Not later than September 30, 2005, the 
Administrator of the United States Agency for International Development 
shall submit to Congress a report that documents the process of 
developing and applying poverty assessment procedures with its 
partners.
    (b) Reports for Fiscal Year 2006 and Beyond.--Beginning with fiscal 
year 2006, the Administrator of the United States Agency for 
International Development shall annually submit to Congress on a timely 
basis a report that addresses the United States Agency for 
International Development's compliance with the Microenterprise for 
Self-Reliance Act of 2000 by documenting--
            (1) the percentage of its resources that were allocated to 
        the very poor (as defined in paragraph (5) of section 131(f) of 
        the Foreign Assistance Act of 1961 (22 U.S.C. 2152a(f)(5))) 
        based on the data collected from its partners using the 
        certified methods; and
            (2) the absolute number of the very poor reached.




                                                       Calendar No. 689

107th CONGRESS

  2d Session

                               H. R. 4073

_______________________________________________________________________

                                 AN ACT

  To amend the Microenterprise for Self-Reliance Act of 2000 and the 
 Foreign Assistance Act of 1961 to increase assistance for the poorest 
    people in developing countries under microenterprise assistance 
           programs under those Acts, and for other purposes.

_______________________________________________________________________

                            October 8, 2002

                       Reported with an amendment