[Congressional Record Volume 148, Number 127 (Wednesday, October 2, 2002)]
[Senate]
[Pages S9850-S9852]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SARBANES (for himself, Mr. DeWine, Mrs. Clinton, Mr. Dodd, 
        and Mr. Kerry):
  S. 3032. A bill 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; to the 
Committee on Foreign Relations.
  Mr. SARBANES. Mr. President, I rise to introduce legislation to amend 
the Microenterprise for Self-Reliance Act of 2000 and the Foreign 
Assistance Act of 1961 to increase assistance for poor people in 
developing countries under microenterprise assistance programs. I am 
joined in this effort by my colleagues, Senator DeWine of Ohio, Senator 
Clinton of New York, Senator Dodd of Connecticut, and Senator Kerry of 
Massachusetts.
  Microenterprises play a critical role in helping poor people the 
world over raise their incomes, build assets, start new businesses, and 
improve their lives. Access to microenterprise loans and services with 
the attendant obligations allows poor people to establish good credit, 
engage in commerce, and begin to lift themselves out of poverty. The 
U.S. Government has been the leading donor for microenterprise 
development over the past two decades. In collaboration with diverse 
partner institutions like PVOs, private voluntary organizations, U.S. 
support, primarily through USAID, for microenterprise activities 
enables over 2 million people throughout the developing world to have 
access to microfinance services.
  The legislation I am introducing today authorizes $175 million in 
fiscal year 03 and $200 million in fiscal year 04 for microenterprise 
assistance, an increase over the $155 million authorization level in 
fiscal year 02.
  The other provisions of this legislation include a reaffirmation of 
the provision in the Microenterprise for Self-Reliance Act of 2000 
stipulating that 50 percent of all microenterprise assistance shall be 
targeted to the very poor. The term ``very poor'' has been defined in 
the new legislation as those living in the bottom 50 percent below the 
poverty line established by their respective national governments, or 
on less

[[Page S9851]]

than $1 a day. The legislation also provides that the microenterprise 
programs should target both rural and urban poor.
  Ensuring that 50 percent of all microenterprise assistance is 
targeted to the very poor has been problematic. This legislation calls 
for the adoption of a monitoring system using proven effective poverty 
assessment tools to identify more precisely the very poor and ensure 
that they receive microenterprise loans, savings, and assistance 
authorized under this act. The legislation also stipulates that the 
USAID Administrator, in consultation with microenterprise institutions 
and other appropriate organizations, shall develop no fewer than two 
low-cost methods for partner institutions to use to assess the poverty 
levels of their current or prospective clients. By October 1, 2004, 
USAID shall certify that no fewer than two of such methods are being 
used for measuring poverty levels of current or prospective clients. 
Additionally, the legislation says that USAID, beginning no later than 
October 1, 2005, shall require all microenterprise organizations 
applying for U.S. assistance to use one of these methods.
  Finally, the legislation requires the USAID Administrator to submit a 
report to Congress, no later than September 30, 2005, on the 
development and application of the poverty assessment procedures and, 
beginning with fiscal year 2006, an annual report documenting the 
percentage of its resources allocated to the very poor, based on the 
certified methods and the absolute number of the very poor that was 
reached.
  The legislation, which builds on somewhat similar legislation that 
passed the House earlier this year (H.R. 4073), was the result of many 
weeks of hard work and negotiations between USAID and the 
Microenterprise Coalition, a group that represents the microenterprise 
institutions. Both USAID and the Microenterprise Coalition strongly 
support this legislation. I commend them for their efforts and I urge 
the Senate to pass this important legislation.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 3032

       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 ensure that in the implementation of this title at 
     least 50 percent of all microenterprise assistance under this 
     title, and the amendments made under this title, shall be 
     targeted to the very poor.''.
       (b) Definitions.--Section 104 of such Act is amended--
       (1) in paragraph (2), by striking ``for 
     microentrepreneurs'' and inserting ``to microentrepreneurs 
     and their households''; and
       (2) by adding at the end the following:
       ``(5) Very poor.--The term `very poor' means individuals--
       ``(A) living in the bottom 50 percent below the poverty 
     line established by the national government of the country in 
     which those individuals live; or
       ``(B) living on the equivalent of less than $1 per day.''.

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

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

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

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

       (a) Findings and Policy.--Section 131(a) of the Foreign 
     Assistance Act of 1961 (22 U.S.C. 2152a(a)) is amended to 
     read as follows:
       ``(a) Findings and Policy.--Congress finds and declares 
     that--
       ``(1) access to financial services and the development of 
     microenterprise are vital factors in the stable growth of 
     developing countries and in the development of free, open, 
     and equitable international economic systems;
       ``(2) it is therefore in the best interest of the United 
     States to facilitate access to financial services and assist 
     the development of microenterprise in developing countries;
       ``(3) access to financial services and the development of 
     microenterprises can be supported by programs providing 
     credit, savings, training, technical assistance, business 
     development services, and other financial and non-financial 
     services; and
       ``(4) given the relatively high percentage of populations 
     living in rural areas of developing countries, and the 
     combined high incidence of poverty in rural areas and growing 
     income inequality between rural and urban markets, 
     microenterprise programs should target both rural and urban 
     poor.''.
       (b) Authorization.--Section 131(b) of such Act (22 U.S.C. 
     2152a(b)) is amended--
       (1) in paragraph (3)(A)(i), by striking ``entrepreneurs'' 
     and inserting ``clients''; and
       (2) in paragraph (4)(D)--
       (A) in clause (i), by striking ``very small loans'' and 
     inserting ``financial services to poor entrepreneurs''; and
       (B) in clause (ii), by striking ``microfinance'' and 
     inserting ``microenterprise''.
       (c) Monitoring System.--Section 131(c) of such Act (22 
     U.S.C. 2152a(c)) is amended by striking paragraph (4) and 
     inserting the following:
       ``(4) adopts the widespread use of proven and effective 
     poverty assessment tools to successfully identify the very 
     poor and ensure that they receive needed microenterprise 
     loans, savings, and assistance.''
       (d) Development and Application of Poverty Measurement 
     Methods.--Section 131 of such Act (22 U.S.C. 2152a) is 
     amended--
       (1) by redesignating subsections (d) and (e) as subsections 
     (e) and (f), respectively; and
       (2) by inserting after subsection (c) the following:
       ``(d) Development and Certification of Poverty Measurement 
     Methods; Application of Methods.--
       ``(1) Development and certification.--(A) The Administrator 
     of the United States Agency for International Development, in 
     consultation with microenterprise institutions and other 
     appropriate organizations, shall develop no fewer than two 
     low-cost methods for partner institutions to use to assess 
     the poverty levels of their current or prospective clients. 
     The United States Agency for International Development shall 
     develop poverty indicators that correlate with the 
     circumstances of the very poor.
       ``(B) The Administrator shall field-test the methods 
     developed under subparagraph (A). As part of the testing, 
     institutions and programs may use the methods on a voluntary 
     basis to demonstrate their ability to reach the very poor.
       ``(C) Not later than October 1, 2004, the Administrator 
     shall, from among the low-cost poverty measurement methods 
     developed under subparagraph (A), certify no fewer than two 
     such methods as approved methods for measuring the poverty 
     levels of current

[[Page S9852]]

     or prospective clients of microenterprise institutions for 
     purposes of assistance under this section.
       ``(2) Application.--The Administrator shall require that, 
     with reasonable exceptions, all organizations applying for 
     microenterprise assistance under this Act use one of the 
     certified methods, beginning no later than October 1, 2005, 
     to determine and report the poverty levels of current or 
     prospective clients.''.
       (e) Level of Assistance.--Section 131(e) of such Act, as 
     redesignated by subsection (d), is amended by inserting ``and 
     $175,000,000 for fiscal year 2003 and $200,000,000 for fiscal 
     year 2004'' after ``fiscal years 2001 and 2002''.
       (f) Definitions.--Section 131(f) of such Act, as 
     redesignated by subsection (d), is amended by adding at the 
     end the following:
       ``(5) Very poor.--The term `very poor' means those 
     individuals--
       ``(A) living in the bottom 50 percent below the poverty 
     line established by the national government of the country in 
     which those individuals live; or
       ``(B) living on less than the equivalent of $1 per day.''.

     SEC. 4. REPORT TO CONGRESS.

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