[Congressional Record Volume 149, Number 72 (Wednesday, May 14, 2003)]
[House]
[Pages H4032-H4035]
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

  Mr. SMITH of New Jersey. Mr. Speaker, I move to suspend the rules and 
pass the bill (H.R. 192) 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.
  The Clerk read as follows:

                                H.R. 192

       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,

[[Page H4033]]

     and equitable international economic systems;
       ``(2) it is therefore in the best interest of the United 
     States to facilitate access to financial services and assist 
     the development of microenterprise in developing countries;
       ``(3) access to financial services and the development of 
     microenterprises can be supported by programs providing 
     credit, savings, training, technical assistance, business 
     development services, and other financial and non-financial 
     services; and
       ``(4) given the relatively high percentage of populations 
     living in rural areas of developing countries, and the 
     combined high incidence of poverty in rural areas and growing 
     income inequality between rural and urban markets, 
     microenterprise programs should target both rural and urban 
     poor.''.
       (b) Authorization.--Section 131(b) of such Act (22 U.S.C. 
     2152a(b)) is amended--
       (1) in paragraph (3)(A)(i), by striking ``entrepreneurs'' 
     and inserting ``clients''; and
       (2) in paragraph (4)(D)--
       (A) in clause (i), by striking ``very small loans'' and 
     inserting ``financial services to poor entrepreneurs''; and
       (B) in clause (ii), by striking ``microfinance'' and 
     inserting ``microenterprise''.
       (c) Monitoring System.--Section 131(c) of such Act (22 
     U.S.C. 2152a(c)) is amended by striking paragraph (4) and 
     inserting the following:
       ``(4) adopts the widespread use of proven and effective 
     poverty assessment tools to successfully identify the very 
     poor and ensure that they receive needed microenterprise 
     loans, savings, and assistance.''.
       (d) Development and Application of Poverty Measurement 
     Methods.--Section 131 of such Act (22 U.S.C. 2152a) is 
     amended--
       (1) by redesignating subsections (d) and (e) as subsections 
     (e) and (f), respectively; and
       (2) by inserting after subsection (c) the following:
       ``(d) Development and Certification of Poverty Measurement 
     Methods; Application of Methods.--
       ``(1) Development and certification.--(A) The Administrator 
     of the United States Agency for International Development, in 
     consultation with microenterprise institutions and other 
     appropriate organizations, shall develop no fewer than two 
     low-cost methods for partner institutions to use to assess 
     the poverty levels of their current or prospective clients. 
     The United States Agency for International Development shall 
     develop poverty indicators that correlate with the 
     circumstances of the very poor.
       ``(B) The Administrator shall field-test the methods 
     developed under subparagraph (A). As part of the testing, 
     institutions and programs may use the methods on a voluntary 
     basis to demonstrate their ability to reach the very poor.
       ``(C) Not later than October 1, 2004, the Administrator 
     shall, from among the low-cost poverty measurement methods 
     developed under subparagraph (A), certify no fewer than two 
     such methods as approved methods for measuring the poverty 
     levels of current or prospective clients of microenterprise 
     institutions for purposes of assistance under this section.
       ``(2) Application.--The Administrator shall require that, 
     with reasonable exceptions, all organizations applying for 
     microenterprise assistance under this Act use one of the 
     certified methods, beginning no later than October 1, 2005, 
     to determine and report the poverty levels of current or 
     prospective clients.''.
       (e) Level of Assistance.--Section 131(e) of such Act, as 
     redesignated by subsection (d), is amended by inserting ``and 
     $175,000,000 for fiscal year 2003 and $200,000,000 for fiscal 
     year 2004'' after ``fiscal years 2001 and 2002''.
       (f) Definitions.--Section 131(f) of such Act, as 
     redesignated by subsection (d), is amended by adding at the 
     end the following:
       ``(5) Very poor.--The term `very poor' means those 
     individuals--
       ``(A) living in the bottom 50 percent below the poverty 
     line established by the national government of the country in 
     which those individuals live; or
       ``(B) living on less than the equivalent of $1 per day.''.

     SEC. 4. REPORT TO CONGRESS.

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

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

                              {time}  1145


                             general leave

  Mr. SMITH of New Jersey. Mr. Speaker, I ask unanimous consent that 
all Members may have 5 legislative days within which to revise and 
extend their remarks and include extraneous material on the bill 
currently under consideration.
  The SPEAKER pro tempore (Mr. Bass). 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 in very strong support of H.R. 192, the 
Microenterprise for Self-Reliance Act. I introduced this bill at the 
beginning of the 108th Congress, along with 66 cosponsors. And this, 
frankly, Mr. Speaker, is the final product representing a culmination 
of months of hard work and discussions by Republicans and Democrats 
alike in both the House and the Senate, members of the microenterprise 
community, and USAID. We are trying, with this legislation, to build 
upon one of the most progressive and successful foreign aid programs 
that this country offers.
  I would like to thank the gentleman from Texas (Mr. DeLay) and our 
leadership for scheduling this bill. We know that the House has been 
considering numerous important pieces of foreign affairs legislation in 
recent weeks and months, from the global AIDS bill to legislation 
relating to the war on terrorism, and I am grateful that this bill has 
been posted for today's consideration.
  I would also like to thank the gentleman from Illinois (Chairman 
Hyde) who has very strong support for this bill, and seeing it through 
every step of the way. We moved it at the very first markup of our 
committee. I would also like to thank the gentleman from California 
(Mr. Lantos), who has been a great friend and supporter of 
microenterprise initiatives, as well as many other very important 
foreign policy and human rights initiatives that are considered by this 
House. I also thank the gentleman from New York (Mr. Houghton), the 
gentleman from New Jersey (Mr. Payne), and the gentlewoman from Florida 
(Ms. Ros-Lehtinen) who is a cosponsor.
  I would also like to thank my friend and colleague, Tim Roemer, 
former colleague, who worked very hard with us last year in developing 
this legislation. We had a very good broad coalition of Members trying 
to make this legislation a reality.
  Mr. Speaker, H.R. 192 will expand our existing microenterprise 
program so that more people can share in the hope of microlending that 
has already proved so fruitful to so many. H.R. 192 puts a priority on 
microenterprise funding, which is currently authorized at $155 million, 
by authorizing $175 million in fiscal year 2003, and $200 million in 
fiscal year 2004.
  H.R. 192 establishes a new framework to ensure that more funds go to 
the poorest of the poor through the development and implementation of 
easy-to-use and cost-effective poverty assessment programs and 
techniques. Identifying and targeting the poorest potential clients who 
would stand to benefit the most from microenterprise loans has proven 
to be more difficult than originally anticipated. I am hopeful that 
once developed, these poverty assessment techniques may prove more 
useful not only for microenterprise, but also in other areas of foreign 
aid as well.
  Let me just say, Mr. Speaker, that this legislation builds upon and 
complements the principles that President Bush has outlined for a more 
effective foreign aid through the Millennium Challenge Account. 
Business owners assisted by microlending are not only able to increase 
their own incomes, but through their efforts, they create jobs and help 
economies to go, and person by person, job by job, they help to 
eliminate poverty.
  It is important to note that over 2 million clients are currently 
benefiting from USAID-assisted programs that provide the necessary 
capital through these small loans, sometimes through $200, $300, maybe 
$400, but these loans are the lifeblood to these individuals to make it 
and to begin to develop their own businesses, build their own homes, 
and to care for themselves.

[[Page H4034]]

  It is estimated that 97 percent of microenterprise loans are 
successfully repaid. I repeat that: 97 percent of the loans are repaid. 
That is astonishing. About 70 percent of those loans go to women who 
are very often the most vulnerable in these societies, sometimes 
subjected to abuse and the need of economic opportunities in the 
developing world. This is a women's empowerment bill, to ensure that 
more women get out of poverty so they are not prey for the traffickers 
and the others who would exploit them.
  Finally, just let me say again, Mr. Speaker, a great deal of hard 
work went into this. This is a bipartisan piece of legislation, and I 
hope it will have the full support of the body.
  Mr. Speaker, I reserve the balance of my time.
  Mr. LANTOS. Mr. Speaker, I yield myself such time as I may consume.
  I rise in strong support of H.R. 192. At the outset, I want to 
congratulate my good friend, the gentleman from New Jersey (Mr. Smith), 
for the leadership he has shown on this most important piece of 
legislation. I also want to pay tribute to the gentleman from New 
Jersey (Mr. Payne), the gentleman from New York (Mr. Houghton), and 
three of our former colleagues, Mr. Gilman, Mr. Gejdenson, and Tim 
Roemer, for their contributions in an earlier Congress to this 
important issue.
  Mr. Speaker, microenterprise programs have proven to be effective in 
providing poor households with the financial tools needed to generate 
income, create savings, and develop businesses, however small, to 
alleviate poverty. Therefore, I am very pleased that our bill not only 
reauthorizes this program, but also increases the amount of funding for 
the programs.
  In the 3 years since the original legislation was enacted, we have 
gained new insights on how these programs function. One such insight is 
that due to a lack of precise tools to measure poverty and the 
difficulty in identifying and reaching the very poorest households, 
there is growing concern that these programs are not focusing on the 
poorest and most needy individuals. Our legislation seeks to improve 
the targeting of assistance to the very poor by amending the definition 
and requiring USAID to develop more precise tools to measure poverty.
  Finally, I want to reiterate my strong support for USAID and a 
variety of nonprofit organizations: Freedom For Hunger, Save the 
Children, Results, FINCA, and countless others which are working in 
poor communities across the globe to help the most needy families get 
the financial tools they need to provide for their families. I hope 
that by passing this bipartisan legislation, we will be giving them the 
resources they need to lift themselves from grinding poverty.
  Mr. Speaker, I encourage all of my colleagues to support the 
legislation, and, again, I want to pay public tribute to my good 
friend, the gentleman from New Jersey (Mr. Smith).
  Mr. Speaker, I reserve the balance of my time.
  Mr. SMITH of New Jersey. Mr. Speaker, I yield 3 minutes to the 
distinguished gentleman from Illinois (Mr. Kirk), a former staff member 
of the committee and now a member of the Committee on International 
Relations, who has worked on these issues for a long time.
  Mr. KIRK. Mr. Speaker, I want to thank the gentleman from New Jersey 
(Chairman Smith), the gentleman from California (Mr. Lantos), and the 
gentleman from Illinois (Chairman Hyde). As a staff member of the 
committee, I wrote an earlier version of this legislation, and it 
reflects a growing movement started by Dr. Muhammed Yunnus at the 
Grameen Bank in Bangladesh, which has now become the largest financial 
institution in terms of customers in that country, serving the poorest 
of the poor.
  This movement has spread worldwide, founding institutions such as 
Banco Sol in Bolivia, also now the largest financial institution in 
that country. As a member of the Committee on Appropriations' 
Subcommittee on Foreign Operations, Export Financing and Related 
Programs, we will be working hard to make sure that the appropriation 
backs up the authorization to ensure that we fund this critical 
program.
  I particularly applaud the chairman for identifying the poorest of 
the poor. I want to thank the groups behind this legislation such as 
Results, Sam Daley Harris; FINCA, with Lawrence Janovich; and Accion 
International, and others like Opportunity International that provide 
loans to the poorest of the poor overseas.
  In recent years, micro has become macro, and this cause has been 
adopted by Her Majesty, Queen Rania of Jordan, as her key program to 
spread throughout the world, especially in the former Soviet Union. 
This movement has also spread to the United States. I want to 
particularly thank the Duman Foundation in Deerfield, Illinois, that is 
using the lessons of the Grameen Bank and microenterprise loans to work 
with the poorest of the poor in my home State, in North Chicago, 
Illinois.
  So I want to commend the chairman, and I urge adoption of this 
legislation. I urge this House to back up the authorization with 
appropriations for this critical program.
  Mr. LANTOS. Mr. Speaker, we have no further requests for time, and I 
yield back the balance of my time.
  Mr. SMITH of New Jersey. Mr. Speaker, we have no further requests for 
time. In conclusion, I would like to thank Walker Roberts on our staff, 
and the other unsung heroes of this legislation and other bills that 
come before this body. The staff who painstakingly work on the details. 
I thank Peter Smith, who worked very hard on this bill, and George 
Phillips on my personal staff who has been a real honcho, pushing this 
bill through to final passage.
  Thank you to all of our staff and the staff of the gentleman from 
California (Mr. Lantos) as well who have worked very hard. It has been 
a great product of cooperation, and the poorest of the poor will 
benefit when this is enacted in the law.
  Mr. CASTLE. Mr. Speaker, I rise today in strong support of H.R. 192. 
This legislation is vital to the future of so many impoverished people 
throughout the world. Microenterprise programs have been remarkably 
successful in providing opportunity to those most in need both abroad 
and domestically.
  Microenterprise programs provide poor people, who have the initiative 
to start or expand small business endeavors, access to small loans with 
low interests rates. These small loans have substantial value to the 
recipients and effectively foster self-sufficiency and fiscal 
responsibility. In fact, almost all loans are repaid. This is strong 
evidence of the effectiveness of these programs.
  Microenterprise programs exemplify the qualities of good, sound 
policy by improving the lives of individuals while positively impacting 
a broad population and doing so with little waste. Unlike other forms 
of assistance, microenterprise gives the aid directly to the intended 
recipients in need. This direct approach eliminates government waste, 
spreads economic opportunity, and plants the seeds for growth of the 
small business sector in developing nations. The creation of a solid 
small business infrastructure in developing nations provides a stimulus 
for their economics.
  Not only will the success of our microenterprise programs be 
continued under H.R. 192, they will also be strengthened by provisions 
for increased funding and improving poverty-measuring tools. This 
legislation calls for increasing the amount of funds authorized for 
microenterprise to $175 million in FY 2003 and $200 million in FY 2004. 
It also requires that the U.S. Agency for International Development 
develop, test, and certify two methods for measuring poverty levels of 
microenterprise assistance recipients. By targeting those most in need 
and increasing aid, we make a good program better.
  Helping in the fight against global poverty also increase the 
security of the American people and our friends throughout the world. 
As President Bush states, ``Persistent poverty and oppression can lead 
to hopelessness and despair. And when governments fail to meet the most 
basic needs of their people, these failed states can become havens for 
terror.'' Microenterprise helps the impoverished and serves as one tool 
we can use to erode that hopelessness and that despair.
  This bipartisan legislation will give new hope and opportunity to the 
poor around the world and provides the potential to improve our 
relations with many nations. Mr. Speaker, I want to thank the gentleman 
from New Jersey (Mr. Smith) and the gentleman from California (Mr. 
Lantos) for their work on putting this legislation together and their 
commitment to fighting global poverty. I urge all of my colleagues to 
support H.R. 192.
  Mr. MORAN of Virginia. Mr. Speaker, I rise today to support this 
important bill which amends the Microenterprise for Self-Reliance Act 
of 2000 and the Foreign Assistance Act of 1961. This bill would 
increase assistance for

[[Page H4035]]

the poorest people in developing countries by authorizing $375 million 
in microenterprise loans.
  Microenterprise loan assist people in overcoming poverty through 
participation in the private sector and are a successful means to 
combating the debilitating level of poverty in the developing world.
  It has been estimated that the number of microenterprises range from 
one-third to one-half of the world's businesses.
  However, there are major challenges for microenterpreuenurs who face 
several impediments to improving their productivity and standard of 
living such as a lack of skills and market access, legal barriers, and 
especially, an absence of capital.
  This bill will open unlimited doors of opportunity for the world's 
poorest people. Many microenterprise loans are less than a $100. What 
may seem to Americans as a relatively small amount of money, can change 
the lives of families and communities.
  Take for instance a woman in Ghana who tries to make a living selling 
donuts in her village, but is limited to how many she can make in a day 
with her own hands. With a small amount of money, this same woman is 
able to purchase equipment that can make more than one donut at a time 
and increase sales and profit. This in turn elevates the standard of 
living for herself and her family.
  A relatively small amount of capital can help empower the world's 
poorest people and help them graduate from the lowest levels of 
poverty.
  Microenterprise loans are an important part of our country's foreign 
assistance program. I commend this body for taking up this important 
measure.
  Mr. Speaker, I am pleased to be a co-sponsor of this bill and I urge 
its passage.
  Mr. SULLIVAN. Mr. Speaker, today I rise in support of H.R. 192 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.
  Microenterprise programs give poor borrowers the capacity to improve 
the quality of their lives and the futures of their children. It helps 
very poor people start or expand self-employment ventures and pull 
themselves out of poverty.
  If we are looking for ways to achieve the Millennium Development goal 
of cutting the severe poverty of over 1 billion people in half by 2015, 
there is no more direct way than expanding access to Microenterprise. 
These programs are reaching over 25 million very poor borrowers--with 
an average family of five--that's over 125 million people touched by 
Microenterprise. It can have a crucial role to play in families and 
communities by providing additional income and the money used to obtain 
better food, housing and education.
  Microenterprise is a powerful anti-poverty tool, and it is most 
powerful in the hands of the poorest people. Mr. Speaker, I encourage 
passage of H.R. 192 and I yield back the balance of my time.
  Mr. SMITH of New Jersey. Mr. Speaker, I yield back the balance of my 
time.
  The SPEAKER pro tempore. 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. 192.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the bill was passed.
  A motion to reconsider was laid on the table.

                          ____________________