[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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