[Congressional Record Volume 148, Number 71 (Tuesday, June 4, 2002)]
[House]
[Pages H3079-H3084]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


 MICROENTERPRISE FOR SELF-RELIANCE ACT OF 2000 AND FOREIGN ASSISTANCE 
                       ACT OF 1961 AMENDMENTS ACT

  Mr. SMITH of New Jersey. Mr. Speaker, I move to suspend the rules and 
pass the bill (H.R. 4073) 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, as amended.
  The Clerk read as follows:

                               H.R. 4073

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

     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 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.''.
       (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; 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.''.

     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.''.
       (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) 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
       (B) in subparagraph (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 
     credits, loans, 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 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.
       ``(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.
       ``(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.
       ``(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.''.
       (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; 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.''.

     SEC. 4. REPORT TO CONGRESS.

       Not later than July 1, 2004, the Administrator of the 
     United States Agency for International Development shall 
     submit to Congress a report that contains--
       (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);

[[Page H3080]]

       (2) an analysis of the results of the application of such 
     interim poverty measurement methods to sustainable poverty-
     focused programs under such section; and
       (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).

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from New 
Jersey (Mr. Smith) and the gentleman from Indiana (Mr. Roemer) each 
will control 20 minutes.
  The Chair recognizes the gentleman from New Jersey (Mr. Smith).


                             General Leave

  Mr. SMITH of New Jersey. Mr. Speaker, I ask unanimous consent that 
all Members may have 5 legislative days in which to revise and extend 
their remarks and to include extraneous material on H.R. 4073, the bill 
under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from New Jersey?
  There was no objection.
  Mr. SMITH of New Jersey. Mr. Speaker, I yield myself such time as I 
may consume.
  Mr. Speaker, I rise to present H.R. 4073, the Microenterprise 
Enhancement Act of 2002, to the House. This important anti-poverty 
legislation reforms, enhances, and expands microenterprise programs 
throughout the world and authorizes $375 million over 2 years for this 
incredible initiative.
  I would like to thank the gentleman from Illinois (Mr. Hyde) for his 
very strong and steadfast support of this legislation and commend him 
for the great leadership that he has shown on so many foreign policy 
and humanitarian issues, especially since September 11.
  I would also like to thank my good friend and colleague, the 
gentleman from Indiana (Mr. Roemer), our leading Democratic cosponsor, 
whose tremendous efforts greatly influenced and helped shape this 
important piece of legislation. This has been a great team effort, and 
again I want to thank him for his extraordinary work and leadership.
  The support of both the gentleman from California (Mr. Lantos), our 
committee's ranking member, and the gentleman from New York (Mr. 
Gilman), the chairman emeritus, have also been important. I would also 
like to thank the gentleman from New Jersey (Mr. Payne) and the 
gentleman from New York (Mr. Houghton), and the nearly 80 other 
cosponsors for their support of this endeavor.
  Mr. Speaker, the impact of microenterprise on entrepreneurs and 
borrowers in the developing world cannot be estimated and overstated. 
Over 2 million clients are currently benefitting from AID-assisted 
programs, and since its inception, millions more have been empowered by 
microenterprise services.
  Like many of my colleagues, and like I think Members of the other 
body, I have been at times critical of some of our Nation's foreign aid 
programs, because some of the money never really ends up reaching the 
people that that money is intended to reach. One of the reasons I am so 
enthusiastic about microenterprise programs is because they are 
fundamentally different than traditional foreign aid programs. They are 
based on a bottom-up, grass roots approach rather than a top-down 
model.
  Microenterprise programs have demonstrated very impressive results. 
An estimated 97 percent of the loans are actually repaid. Contrast that 
to some of our own domestic lending programs, and the difference is 
rather stark.
  Studies on the effects of microenterprise programs find they promote 
higher household income and increased family well-being, including 
improved nutrition and education among children.

                              {time}  1415

  In the past 2 fiscal years, we have spent $155 million, which has 
been authorized by Congress for microfinance. I am proud to say that 
this legislation we are considering today will expand that to $175 
million for fiscal year 2003, and $200 million for fiscal year 2004. 
Our legislation will also ensure that more funds go to the poorest of 
the poor, or as we now define it, the very poor, including those living 
on less than $1 a day.
  Although previous legislation has stipulated that 50 percent of the 
funds will go to the poorest of the poor, efforts to target funding to 
the neediest persons has been insufficient because AID essentially uses 
only a single measurement tool to evaluate its poverty outreach 
efforts, and that is to say, average loan size.
  With currency values varying from country to country, and loan size 
dependent on the type of business a person is attempting to start, this 
has not been a sufficient measure, has not been an accurate barometer 
of poverty.
  Mr. Speaker, H.R. 4073, as amended, would require AID to devise new, 
more meaningful poverty-assessment tools and give consideration to low-
cost, easy-to-implement tools already in use by the microfinance 
institutions. Moreover, AID will have a deadline of October 1, 2004, to 
certify and utilize at least two additional poverty-assessment 
techniques that can better evaluate who the poorest actually are and 
ensure that they receive their fair share of the funds provided under 
this act.
  A main reason for the success of the microenterprise programs is that 
the assistance goes directly to those who need our help. It provides 
vital capital for small business owners to strive and achieve their 
dreams. It helps build sound financial institutions on the grassroots 
level that foster self-sufficiency. A loan of several hundred dollars 
or less, which by our standards might be considered quite small, is 
often a substantial portion of a person's yearly earnings in the 
developing world. Such a loan can help an entrepreneur businessman or 
businesswoman increase their profits many-fold, making a better life 
for themselves and their families for many years to come.
  Take the example of Baulia Parra Pruneda of Monterrey, Mexico, one of 
the many successful recipients of a microenterprise loan. When her 
husband lost his job in 1998, she was determined to support her six 
children. Even though she had never worked before and could not read or 
write, she taught herself to sew by following designs that she saw in 
magazines. A $150 loan from a lending institution supported by ACCION, 
one of the leading microfinance institutions in the Americas, provided 
capital for her to purchase the necessary supplies to launch her 
endeavor into self-sufficiency. After building her small business 
through a series of microloans, she now sells over 100 items per week. 
The money she earns and continues to make not only provides food for 
her children, but has also enabled her to install a toilet and a 
shower, as well as a second floor in her home.
  As inspiring as Braulia's story is, it is not unique. When given the 
opportunity and the seed capital to produce, people can turn their 
economic situation around in a dramatic way. The goal now is to build 
on past successes that have reached tens of thousands of people and 
apply lessons learned to devising a better program.
  Mr. Speaker, it is worth noting that approximately 70 percent of 
microenterprise beneficiaries are women, so this initiative is key to 
reversing the feminization of poverty. I would note that later today, 
probably by early tomorrow, the report on trafficking will be issued 
pursuant to the trafficking legislation that we passed last year. I was 
the prime sponsor of that bill. We worked very hard in a bipartisan 
way. The gentleman from California (Mr. Lantos) worked on it, and so 
many others, to ensure that we crack down on this terrible scourge 
called trafficking. But one of the core reasons why women can be preyed 
upon and trafficked into prostitution and other involuntary servitude 
has been poverty. They have been exploited because they are vulnerable.
  This legislation is part of the effort to give women the opportunity 
to take care of themselves, as well as their families.
  Mr. Speaker, let me say finally, the greatest antipoverty program 
will always be a job. This is all about job creation, one village at a 
time, one community at a time, one family at a time. It is a very 
important piece of legislation, it is bipartisan at the outset; and I 
hope all Members will support it.
  Mr. Speaker, I reserve the balance of my time.
  Mr. LANTOS. Mr. Speaker, I yield myself such time as I may consume.

[[Page H3081]]

  Mr. Speaker, I rise in strong support of this legislation, H.R. 4073, 
which amends and reauthorizes the Microenterprise for Self-Reliance Act 
of 2000 and the Foreign Assistance Act of 1961.
  Mr. Speaker, this is a bipartisan compromise bill that truly improves 
upon the original legislation, and I want to thank the gentleman from 
New Jersey (Mr. Smith) and the gentleman from Indiana (Mr. Roemer) for 
their extraordinary efforts in crafting this legislation as well as 
recognizing the support of our colleagues, the gentleman from New 
Jersey (Mr. Payne) and the gentleman from New York (Mr. Houghton). I 
also want to acknowledge the pioneering work on the microenterprise 
that was done by the former chairman and ranking member of the 
Committee on International Relations, the gentleman from New York (Mr. 
Gilman) and Mr. Gejdensen, who introduced the Microenterprise for Self-
Reliance Act of 2000, which was signed into law by President Clinton.
  Microenterprise programs have proven to be an effective means of 
providing poor households with the financial tools needed to generate 
income, create savings, and develop businesses to help alleviate 
poverty. We have seen the transforming impact of these programs in 
every country and on every continent where development work is being 
done.
  Microenterprise is founded on the very basic premise that by 
providing poor households with the tools to manage their finances 
better, be it through the provision of small loans or even the ability 
to open a savings account, we can help to improve their lives and even 
lift them out of poverty. This principle is illustrated so dramatically 
in Bangladesh by the Grameen Bank that has been so successfully 
replicated around the globe and provides an effective tool for poverty 
alleviation and reduction.
  Therefore, I am very pleased that we are not only reauthorizing 
microenterprise legislation, but we are also increasing the amount of 
funding for these programs. Our legislation seeks to improve targeting 
of assistance to the poorest of the poor by requiring the 
administration to develop more precise tools to measure poverty, and it 
creates better means of reaching the very poor in every country where 
this program operates.
  Specifically, our legislation ensures that at least half of all 
microenterprise funding authorized be specifically set aside for 
programs or services in which half of the incoming clients are among 
the very poor. I hope that by passing this legislation we will be 
providing the tools and the resources needed to continue this most 
important work. I urge all of my colleagues to support H.R. 4073.
  Mr. Speaker, I reserve the balance of my time.
  Mr. LANTOS. Mr. Speaker, I yield such time as he may consume to the 
gentleman from Indiana (Mr. Roemer), who has done so much work on this 
issue.
  (Mr. ROEMER asked and was given permission to revise and extend his 
remarks.)
  Mr. ROEMER. Mr. Speaker, I want to say in the beginning of my 
remarks, the U2 rock star Bono sang ``It's a Beautiful Day,'' and there 
is no better day in the House of Representatives when Democrats and 
Republicans can join together to successfully encourage a bipartisan 
bill which promotes free markets, which promotes entrepreneurship, 
which promotes economic aid that gains results, especially for women 
and poor in poor countries like Africa. I am very proud and very 
enthusiastic to stand on the floor today and hopefully see this 
legislation fly through the House of Representatives in a bipartisan 
vote later today.
  Much thanks go to many members on the committees of oversight. I want 
to start there and thank the gentleman from New Jersey (Mr. Smith), who 
has been a pleasure to work with on this issue, who has helped craft 
the legislation and worked towards successful passage of this 
legislation from his perch on the Committee on International Relations 
and built bipartisan support for it. It has been a pleasure to work 
with the gentleman, and I know that we have work to do yet with the 
appropriators to get money appropriated for this act.
  I thank the gentleman from California (Mr. Lantos), who has a 
lifetime of service toward these kinds of programs which benefit the 
truly poor people in the world. I thank the gentleman for his year-
after-year fight for increases in these programs. I thank the gentleman 
from Illinois (Chairman Hyde) and the gentleman from New Jersey (Mr. 
Payne), the gentleman from New York (Mr. Houghton), the gentleman from 
New York (Mr. Gilman), and the gentleman from New Mexico (Mr. Udall). I 
also thank the bipartisan staff members on the Democratic and 
Republican side, and my staff member, Jed D'Ercole for his help and 
support on this bill.
  Last week, for those following this issue from Africa and in our 
press from the New York Times to our local papers, it was a curious mix 
of individuals touring Africa, our Secretary of Treasury, Paul O'Neill, 
with the rock star from U2, Mr. Bono. Everywhere the two of them went, 
Mr. Bono would say, ``We need more resources. We must spend more money 
on the plight of the poor.'' As he saw the plight of the poor, 
especially in Africa, where in the world over a billion people live on 
less than a dollar a day, this moved him to devote 11 days off tour 
making money to try to devote resources to helping the poor. Everywhere 
he went, it was resources, resources, money. Everywhere the Secretary 
of Treasury went it was, ``We have to have results. We must have 
efficiency. We have to see the practice really benefit the people.''
  Well, here we have it: H.R. 4073, where we say for a highly 
successful program for microenterprise loans, loans for the poorest 
people driven primarily by women as the head of households, getting 
loans that they repay at 98 percent rates, that this kind of program 
can elevate people out of poverty and help not only women, not only 
their families but their children, and scores of people that live on 
less than a dollar a day.
  Mr. Speaker, this bill says that when these programs are effective 
and these loans are repaid, we are going to devote more money to this 
successful program, and we ask for an increase from $155 million to 
$175 million in 2003 and up to $200 million in 2004. I would hope that 
the appropriators would not only do that, that supporters like the 
gentleman from Arizona (Mr. Kolbe), the gentlewoman from New York (Mrs. 
Lowey), the gentlewoman from California (Ms. Pelosi), and Senator 
Leahey will devote those resources in the upcoming appropriations cycle 
to what this bill allocates and authorizes.
  Why do results plus new resources equal success? Well, the gentleman 
from New Jersey (Mr. Smith) talked about an example in Mexico. I would 
like to talk about an example straight from Malawi, a woman by the name 
of Flora Matiasi. Flora Matiasi lives in Malawi in a one-room hut with 
six children. She struggled to feed these children, to clothe these 
children, to get her children an education. With the help of a small 
loan through this microenterprise program the United States government 
provides, she has been able to develop and sell oil cakes, doughnut-
like confections that are called mandazis. She sells these on a regular 
basis. She sells them, saves the money, feeds her children; and she has 
been able to save $540 which is 10 times her original loan to save to 
educate her children.

                              {time}  1430

  So for her original loan of maybe $40 or $50, we are not only helping 
her with a small job, an entrepreneurial job to sell these doughnut 
cakes, we are helping her six children, and if it keeps growing, she 
will employ an employee next year. This grows and grows and grows. It 
grows to the extent that we are hopeful that, we now serve through 
microenterprise loans about 32 million people, we want to grow that to 
100 million people. We want to grow to 100 million people in the world 
that we serve through microenterprise loans that we can help and 
benefit and lift out of poverty.
  The Wall Street Journal wrote an editorial that was lukewarm about 
Mr. Bono's and Mr. O'Neill's visit but it said, ``Mr. O'Neill has been 
reminding everyone the only route to economic growth is private 
enterprise, free markets and the rule of law.''
  That is exactly what this is, private enterprise, entrepreneurship, 
loans that guarantee more loans that are repaid and generate more loans 
for children's education and help people buy

[[Page H3082]]

products eventually that we sell overseas in our markets. That is 
exactly what Mr. Bono and Mr. O'Neill are trying to do.
  I am very happy to support this bill. I am very proud to have worked 
with the gentleman from New Jersey (Mr. Smith) and the gentleman from 
Illinois (Mr. Hyde) and the gentleman from California (Mr. Lantos) and 
others. I also want to thank Sam Daley Harris of RESULTS and Chris 
Dunford of Freedom from Hunger. I want to again thank my colleagues for 
their support and their bipartisan accomplishments here. I want to 
encourage successful appropriation for this bill in the future. If we 
are really going to have a beautiful day in the future, if we are 
really going to fight terrorism effectively in the future, it is going 
to take more than satellites and soldiers, it is going to take free 
trade and successful microenterprise loans for the poor.
  Mr. SMITH of New Jersey. Mr. Speaker, I thank my good friend for his 
comments and his contribution to this legislation.
  Mr. Speaker, I yield such time as she may consume to the 
distinguished gentlewoman from Maryland (Mrs. Morella).
  Mrs. MORELLA. Mr. Speaker, first of all I want to thank the gentleman 
for yielding the time to me, and I particularly want to thank him for 
developing this legislation. I certainly rise in support of H.R. 4073, 
the Microenterprise for Self-Reliance Act and the Foreign Assistance 
Act Amendments. I also want to thank the gentleman from Indiana (Mr. 
Roemer) who just made comments on it who has helped with the bill, 
Chairman Hyde, Ranking Member Lantos, and the gentleman from New York 
(Mr. Houghton) for all their support for this legislation.
  Our foreign aid has never been more necessary than it is today in 
improving our relationships with developing countries. From Bangladesh 
to Guatemala, one of the most exciting strategies for fighting poverty 
in developing countries is the development of microenterprise projects. 
For poor women especially, the practice of extending very small loans 
and improving access to financial services has revolutionized the lives 
of so many impoverished people, and the way in which we think about 
poverty-focused development has also been revolutionized. 
Microenterprise is a method of making very small loans available to the 
world's poorest people. These loans are typically in amounts as low as 
$100, but they enable individuals living in impoverished economic 
conditions to experience free enterprise. Microfinance has touched the 
lives of over 20 million people in the poorest regions of the world. 
And this form of foreign aid has a very strong payback rate.
  Mr. Speaker, women account for nearly 74 percent of the 19.3 million 
of the world's poorest people that are now being served by microfinance 
institutions. Most of these women have access to credit to invest in 
businesses that they own and operate themselves. The vast majority of 
them have excellent repayment records in spite of the daily hardships 
that they face. Contrary to conventional wisdom, they have shown that 
it is a very good idea to lend to the poor and to women.
  While women's access to financial services has increased 
substantially in the past 10 years, their ability to invest in, and to 
benefit from, this access is often still limited by the disadvantages 
they experience because of their gender. Increasingly, the average loan 
for women is smaller than those of men, even when they are in the same 
credit program, the same community and the same lending group. As the 
industry becomes more sophisticated in developing targeted products and 
services, I really think it makes sense to look at both targeting women 
and empowering women.
  Many studies have proven that international development investments 
in women and girls bring the greatest gains for economic growth and 
national development. When women increase their incomes, they directly 
invest this additional capital in the education, health and welfare of 
their children, potentially breaking the cycle of poverty.
  Some of my colleagues have mentioned examples. I would like to 
mention one, too, the story of Razia Begum. Razia Begum lives in a 
village in northeast Bangladesh, an area of verdant hills, paddy fields 
and ponds. Most of Razia's district lacks electricity. The literacy 
rate is 16 percent and half of the 46,000 households in her area eke 
out a living from plots of land of a half acre or less. This is typical 
of Bangladesh, among the world's poorest 15 countries. At 35, Razia has 
taken out two loans from the United Nations development program, one, a 
$65 loan to buy her own piece of land, and a second, a $108 loan to buy 
seeds and fertilizer through the Bhaturpura East Female Village 
Organization. For the first time, UNDP reports, Razia can picture a 
secure future for herself, her three school-aged children and her 
husband, a shopkeeper. Razia is happy and says, ``I can look forward to 
a steady income by selling vegetable seedlings from this plot of 
land.'' She is growing spinach, cauliflower, cabbage, eggplant and 
papaya.
  Microenterprise is at work in the United States, right here as well. 
In 2000, the Aspen Institute and the Association for Enterprise 
Opportunity estimated that there were an estimated 2 million 
microentrepreneurs in the United States, of which 78 percent are women. 
My own home State of Maryland is home to several local microenterprise 
programs. For example, the Foundation for International Community 
Assistance (FINCA) USA, lends to 200 clients. Since it began in 1994, 
it has impacted the lives of hundreds of entrepreneurs in the Greater 
Washington, D.C. and Baltimore areas. Michele Green, just one of the 
many who have benefited from FINCA's work, is a single parent who 
supports four children. Michele has taken out two loans from FINCA and 
in just 4 months doubled her income from selling handmade crafts. She 
reports an increase in household income from $2,200 to $2,600.
  The United States must also substantially increase the amount of 
attention and resources it contributes to implement commitments made at 
the United Nations Fourth World Conference on Women in 1995 and at the 
United Nations Special Assembly Session on Women in 2000 in its foreign 
policy, development assistance programs and international economic 
policies.
  The expansion of this microfinance program, which has the potential 
to transform relations and empower the poor, has become a central 
component of our foreign aid program. I support the Microenterprise for 
Self-Reliance Act. I want to again thank those who have put it 
together, the gentleman from New Jersey (Mr. Smith), the gentleman from 
California (Mr. Lantos), and I am proud that we continue to build on 
that microfinance program.
  Mr. LANTOS. Mr. Speaker, before yielding to my good friend from New 
Mexico, I feel compelled to recognize the fact that the distinguished 
member of his family, the late Mo Udall, gave this body so much wit and 
wisdom and judgment and service. His own father served with great 
distinction as our Secretary of the Interior.
  Mr. Speaker, we do not have an aristocracy of birth or an aristocracy 
of wealth in our country, but we do have an aristocracy of public 
service. I am pleased to yield such time as he may consume to my good 
friend, the gentleman from New Mexico (Mr. Udall), a member of that 
aristocracy.
  Mr. UDALL of New Mexico. Mr. Speaker, I thank the gentleman very much 
for those very kind words.
  Let me first say that I very much appreciate the bipartisan 
leadership on this piece of legislation. Ranking Member Lantos and 
Chairman Hyde, I think, have done an excellent job on making sure this 
gets through the House of Representatives. Clearly Chairman Smith and 
the gentleman from Indiana (Mr. Roemer) have worked very hard on this 
piece of legislation and made sure that it is on the floor today.
  It gives me great pleasure to rise today in strong support of H.R. 
4073. This is extremely important legislation that holds great promise 
for improving the lot of many of the world's poorest individuals. 
According to the World Bank, more than 1.3 billion people in the 
developing world, or one-fifth of the world's population, subsist on 
less than $1 a day. Last year, nearly 10.5 million children under the 
age of 5 died from largely preventable malnutrition and disease and 
more than 100 million children of primary school age remain out of 
schools in developing

[[Page H3083]]

countries throughout the world. These children and their families are 
some of the poorest people in the world who lack access to many of the 
most basic necessities that we in the United States often take for 
granted.
  One tool that has proven to be an effective remedy is microcredit 
loans. These very small loans and other financial services, available 
to the poorest people, allow them to start and expand tiny businesses 
without depending on money lenders who demand exorbitant interest 
rates. In addition, the access to these small loans allows the poor to 
reap the benefits of their hard work.
  Mr. Speaker, I have heard firsthand the stories of women from 
Pakistan and India, who as a result of these important loans, which 
often average around the small sum of $150, were able to pull them and 
their families out of poverty. They spoke of the incredible returns to 
their families and communities, stating that almost 90 percent of the 
return they were able to generate from the loan went to paying for 
better living conditions, better food, and better education for their 
children. In addition, communities that have had numerous individuals 
receive these microloans have experienced an increase in more 
responsible family planning.
  The U.S. has been a major provider of funding for international 
microenterprise programs, providing $155 million for fiscal year 2002. 
Through the funding provided by the U.S., many microenterprise 
institutions are now operating independently of foreign aid. Their 
existence would have been impossible without previous grants for start-
up and expansion. I am extremely pleased to see that H.R. 4073 
increases microenterprise authorization to $175 million for fiscal year 
2003 and $200 million for fiscal year 2004.
  Microcredit helps borrowers improve the quality of their lives and 
the futures of their children. I strongly support this legislation and 
urge my colleagues to do so as well. A vote in favor of H.R. 4073 will 
help provide hope and assistance to corners of the world greatly in 
need of both. I want to once again thank the Members on both sides of 
the aisle who have worked so hard on this piece of legislation. They 
have created a good example of how we should work with each other.
  Mr. SMITH of New Jersey. Mr. Speaker, I yield such time as he may 
consume to the gentleman from Michigan (Mr. Smith).

                              {time}  1445

  Mr. SMITH of Michigan. Mr. Speaker, I thank the gentleman for 
yielding me time.
  Mr. Speaker, let me offer an analogy, a Biblical quotation, and I 
paraphrase: Give a man a fish and he will eat for a day; teach that 
person to fish, and he will have food for a lifetime.
  This is the kind of venture that has not only worked well in other 
countries, but has worked well in Michigan, in Illinois and many other 
States. I only wish we would expand this kind of program, that takes an 
individual that has the willingness to venture into enterpraneurship 
and the hard work that is required in any capitalistic movement, and 
give funding to that individual so that they can develop a business 
that is not only going to help them, but going to help their community.
  Again, to the gentleman from New Jersey (Mr. Smith) and the 
colleagues on the other side of the aisle that helped with this 
legislation, this is probably a more efficient way to help more people 
in more countries than a lot of the foreign aid that we have pursued in 
prior years.
  Mr. Speaker, in closing, let me say I urge my colleagues to vote for 
H.R. 4073.
  Mr. LANTOS. Mr. Speaker, I have no further requests for time, and I 
yield back the balance of my time.
  Mr. SMITH of New Jersey. Mr. Speaker, I yield myself such time as I 
may consume.
  Mr. Speaker, before yielding back the balance of my time, there are a 
number of people to thank again. I mentioned the Members earlier on. I 
would like to thank Peter Smith of our distinguished staff; Joseph 
Rees; Andy Napoli and George Phillips, who worked on this legislation; 
Nisha Desai, who also worked very hard on the bill; Jed D'Ercole, from 
the staff of the gentleman from Indiana (Mr. Roemer), for his work as 
well; and also Mr. Dan Freeman, who is our parliamentarian 
extraordinaire, who was also very, very helpful in crafting this 
legislation.
  Mr. GILMAN. Mr. Speaker, I rise in strong support of H.R. 4073 and I 
commend chairman Hyde and Ranking Minority Member Tom Lantos for 
bringing this measure to the Floor for a vote. Microcredit is a key 
anti-poverty tool. With one fifth of the world's population struggling 
to survive on less than $1 a day, it is vital that we expand 
opportunities for the poor to help themselves. This can be done by more 
effectively utilizing our micro-enterprise resources.
  H.R. 4073 would reprioritize USAID efforts in the micro-enterprise 
arena to ensure that resources are spent more effectively and with the 
greatest return rate.
  We know the capabilities of micro-enterprise development assistance 
programs. However we can take better advantage of their potential. 
Specifically, the U.S. Agency for International Development should 
better track poverty-lending money and report whether it has been 
complying with the Congressional priority. We also need to mandate that 
at least half of all micro-enterprise resources be directed to programs 
serving the very poor. Additionally, USAID should be better able to 
ensure that its programs for the poor are reaching a majority of very 
poor clients and better reward programs upfront for reaching the 
poorest more effectively. H.R. 4073 attempts to do accomplish all these 
worthy goals.
  Accordingly, I thank Chairman Hyde and Ranking Member Lantos for 
their leadership, and my colleagues, Chris Smith, Donald Payne, Amo 
Houghton and Tim Roemer for their efforts to craft this legislation. 
Hopefully, as our Senate counterparts take up the micro-enterprise 
issue in the coming days, they will also include the key poverty 
provisions contained in this bill. I urge my colleagues to support H.R. 
4073.
  Mr. KIRK. Mr. Speaker, I rise today in strong support of H.R. 4073, 
the Micro-enterprise for Self-Reliance Act of 2000 and the Foreign 
Assistance Act of 1961 Amendments Act. This legislation is absolutely 
critical in the fight against global poverty, and serves as a reminder 
of the importance of our nation's continued foreign aid.
  As a staffer for the House International Relations Committee under 
Chairman Gilman, I worked to craft the original legislation that helped 
establish micro-enterprise grant assistance. Now, as we consider 
reauthorizing and increasing funding levels for these critical 
programs, I strongly urge my colleagues to join me in support of this 
legislation.
  Despite the overall growth of the international economy over the last 
twenty years, billions of people throughout the world continue to live 
on less than one dollar per day. The world's poorest people do not have 
the appropriate resources to start small businesses despite the fact 
that in many areas, starting a business requires as little as $100. As 
a proven method of foreign aid, micro-enterprise has successfully paved 
the way for nearly 20 million people to achieve economic independence 
and a better way of life. Small business is the lifeblood of our 
thriving American economy. We must make every effort to ensure that our 
friends abroad are given the same opportunities to start and maintain 
their own businesses.
  Micro-financing stimulates growth, generates new employment, and can 
help raise the income of others. Additionally, these programs promote 
higher household income and increased family welfare. While micro-
enterprise has been proven to enhance the lives of the world's poorest 
people, it has also played a specific role in bettering the lives of 
poor women throughout the world. Studies indicate that the majority of 
those who benefit from micro-enterprise are women.
  Please join me in supporting this bill, which would responsibly 
increase funding for micro-enterprise programs to $175 million in FY 
2003 and $200 million in FY 2004. As the world's leader in foreign aid 
contributions and as a beacon of freedom and prosperity, the United 
States must continue to guide the world out of the darkness of poverty, 
and micro-enterprise is one effective avenue to accomplish this goal.
  Ms. McCARTHY of Missouri. Mr. Speaker, I rise today in support of 
H.R. 4073, the Microenterprise For Self Reliance Act of 2000 and the 
Foreign Assistance Act of 1961 Amendments Act. Microenterprise is the 
provision of small loans that average less than $150 dollars at 
competitive interest rates and other financial services to the poorest 
individuals in developing countries, especially women, in order to 
start or expand self employment ventures and pull themselves out of 
poverty. Microenterprise is a solution to the poorest people's 
inability to find satisfactory employment and obtain needed credit. 
While microenterprise has spread to countries in Asia, Africa, and 
Latin America reaching approximately 30 million clients, tens of 
millions of very poor families who could use microenterprise still do 
not have access to this effective

[[Page H3084]]

route out of poverty. This legislation, which increases assistance 
through microenterprise organizations, is a step in the right direction 
to expanding this successful program.
  Microenterprise is an economically sound method of fighting poverty. 
In developing countries, the rate of repayment of well established 
microenterprise programs ranges from 95 to 99 percent. Due to a system 
of peer support used in many microenterprise models, repayment rates 
are high as borrowers are responsible for each other's success to 
ensure that every member of their group is able to pay back their 
loans. With support to grow and become efficient, microenterprise 
programs in developing countries need less grant money, can utilize 
loan and loan guarantees, and eventually get linked into the formal 
financial system. Microenterprise organizations have been able to cover 
100 percent of operational costs with the interest income generated by 
the loans.
  Women greatly benefit from the microenterprise organizations. Most of 
the 1.2 billion people living on less than a dollar a day are women. 
Women are often responsible for the upbringing of the world's children. 
Poverty may result in the physical and social underdevelopment of their 
children. Experience shows that women are good credit risk. Many women 
invest their income toward the well being of their families. 
Simultaneously, women themselves benefit from the higher social status 
they achieve within the home when they are able to provide income. The 
Women's Empowerment Program in Nepal, for example, conducted a study 
that showed an average of 89,000 out of 130,000 or 68 percent of women 
in its program experienced an increase in their decision making roles 
in the areas of family planning, children's marriage, buying and 
selling property, and sending their daughters to school, all areas of 
decision making traditionally dominated by men.
  Mr. Speaker, in may developing countries, the self employed comprise 
more than 50 percent of the labor force. Access to small amounts of 
credit with reasonable interest rates allows poor people to move from 
tiny initial income generating activities to small microenterprises. In 
most cases, microenterprise programs offer a combination of services 
and resources to their clients including savings facilities, training, 
networking, and peer support. In this way, microenterprise allows 
families to work to end their own poverty with dignity.
  I urge my colleagues to support this measure.
  Mr. ROEMER. Mr. Speaker, last week U.S. Treasury Secretary Paul 
O'Neill and Irish rock star Bono on a tour of Africa called attention 
to the need for international development to alleviate world poverty 
and suffering. As their trip demonstrated, impoverished communities in 
the Third World will benefit greatly from an increase in U.S. foreign 
aid funding toward programs that can maintain stable accountability 
measures.
  Now more than ever, Congress must achieve a bipartisan compromise in 
enacting new and innovative foreign aid programs that effectively meet 
the needs of impoverished people throughout the world. Microenterprise, 
the lending of very small loans to the world's poorest people that 
serve to start and expand small business typically in amounts as low as 
$100, is a U.S. foreign aid program that fosters hope and opportunity, 
and counters the fear and desperation that is exploited among the 
masses of unemployed and impoverished people around the world by 
terrorist organizations like al-Qaeda. The war on terrorism will not be 
won by satellites and soldiers alone; our arsenal must include 
humanitarian assistance that promotes freedom and opportunity for the 
world's poorest people. Undeniably, microenterprise programs fullfill 
this role in the developing world.
  Mr. Speaker, today I rise to voice my strong support for H.R. 4073, a 
bipartisan bill that increases funding for microenterprise programs. 
This important legislation ensures that our investment in the world's 
small business owners in well-spent. Specifically, this legislation 
calls for targeting at least half of all microenterprise resources to 
the world's poorest people and provides greater accountability measures 
that ensure effective poverty-targeting.
  Take for example the story of Violet Mutoto of Uganda. Violet, a 
mother of four young children, lives and works out of her small house 
in the tiny hamlet of Mooni, Uganda. Her mud dwelling contains no 
plumbing; yet she pays roughly $18 a month in rent. Out of the front of 
her home, Violet operates a rudimentary store. Since receiving her 
first loan of $43 from the international development organization, 
Freedom from Hunger, Violet has been able to pay her rent and expand 
her stock of supplies in her store. Now she sells cooking oils, cheese, 
salt, sugar, malaria pills, and other items. The diversified stock of 
supplies has increased her business and has afforded her the 
opportunity to end her older children to school. After repaying her 
first loan, Violet was able to assume second and third loans to begin 
accumulating a savings account.
  H.R. 4073 is the product of a bipartisan effort to create effective 
foreign aid. Earlier this year, my colleague and friend, Amo Houghton 
of New York, and I introduced H.R. 4209, the ``Promoting Self-Reliance 
for the Worlds Poorest People Act of 2002.'' This bill called for three 
essential mandates: (1) increasing U.S. investment in microenterprise 
globally; (2) ensuring that at least half of these resources reach the 
poorest people, especially poor women; and (3) creating poverty 
assessment tools ensuring that microcredit loans reach the poorest 
people.
  Working closely with our colleagues of the International Relations 
Committee and particularly with the gentleman from New Jersey, Chris 
Smith, we were able to forge a strong compromise microenterprise bill. 
This legislation, H.R. 4073, thoughtfully addresses key microenterprise 
poverty issues and, accordingly, was passed unanimously by the 
committee in May. The Smith Roemer microenterprise bill, increases 
funding for Microenterprise programs from $155 million to $175 million 
in FY 2003 and to $200 million in FY 2004 in the Foreign Operations 
budget.
  I would like to thank the International Relations Committee Chairman, 
Mr. Hyde, and Ranking Member, Mr. Lantos, and their respective 
committee staff members, Peter Smith and Nisha Desai, for their 
leadership on this bill. I would also like to thank Representatives Amo 
Houghton, Chris Smith, Donald Payne, Ben Gilman, and my other 
colleagues who lent their support and expertise to the formulation of 
the final bill.
  Mr. Speaker, in conclusion, I strongly encourage my colleagues to 
vote for H.R. 4073 this afternoon. Today, Congress has the opportunity 
to support a foreign aid program that equips the world's poorest people 
with the tools to empower themselves. Microenterprise organizations 
such as Freedom from Hunger provide these vital empowerment tools in 
the form of tiny microcredit loans. As the story of Violet Mutoto 
demonstrates, by devoting greater resources to effective humanitarian 
programs, U.S. foreign aid can provide hope and empowerment to the 
world's poorest people and demonstrate that the United States is 
committed to spreading the rewards that can grow in a free-enterprise 
system.
  Mr. BENTSEN. Mr. Speaker, I rise in strong support of H.R. 4073, 
important legislation that increases assistance for the poorest people 
in developing countries under microenterprise assistance programs.
  This legislation focuses on the lending of very small foreign loans 
to start businesses in highly impoverished areas. A recent World Bank 
report indicates that approximately 1.3 billion worldwide live on less 
than $1 a day. When targeted properly and effectively, such foreign 
assistance can help stop poverty, disease, and other serious threats to 
international communities. H.R. 4073 increases current funding to $175 
million in fiscal year 2003, and $200 million in fiscal year 2004 in 
the Foreign Operations budget.
  More importantly, microcredit provides a valuable and much-needed 
resource to many of our allies and their citizens, an important and 
vital goal for the United States. Here today, we have the chance to 
show our support for promising small business efforts worldwide, and 
the positive impact such enterprises have within their nations. 
Microcredit currently reaches 30 million people, 19 million of whom are 
among the very poor and live in extreme poverty. H.R. 4073 builds on 
efforts to prevent these tragic circumstances by ensuring a stronger 
loan support system, along with the funds to help international 
business growth efforts to succeed.
  As this program is already in place and is a proven success, I 
encourage my colleagues to join me in support of this bill. Working 
with the Administration and my colleagues in the House, I look forward 
to enacting thoughtful loan assistance legislation and battling global 
poverty and suffering.
  For all these reasons, Mr. Speaker, I urge my colleagues to join me 
in support for H.R. 4073, to support business development efforts on a 
global scale, and to help build new communities worldwide.
  Mr. SMITH of New Jersey. Mr. Speaker, I have no further requests for 
time, and I yield back the balance of my time.
  The SPEAKER pro tempore (Mr. LaHood). The question is on the motion 
offered by the gentleman from New Jersey (Mr. Smith) that the House 
suspend the rules and pass the bill, H.R. 4073, as amended.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

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