[Congressional Record (Bound Edition), Volume 150 (2004), Part 19]
[House]
[Pages 25166-25172]
[From the U.S. Government Publishing Office, www.gpo.gov]




         MICROENTERPRISE RESULTS AND ACCOUNTABILITY ACT OF 2004

  Mr. SMITH of New Jersey. Mr. Speaker, I ask unanimous consent to take 
from the Speaker's table the bill (H.R. 3818) to amend the Foreign 
Assistance Act of 1961 to improve the results and accountability of 
microenterprise development assistance programs, and for other 
purposes, and ask for its immediate consideration in the House.
  The Clerk read the title of the bill.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from New Jersey?
  Mr. RANGEL. Mr. Speaker, reserving the right to object, I will not 
object, but I just want to point out that the people in Haiti are 
suffering. We have this small trade bill that we wanted so badly to 
send some hope to these people. The House would not consider it because 
the Senate did not agree that they would accept it. The Senate said 
they could not accept what they have not seen, and here we leave today 
telling the people in Haiti that this small bill that certainly could 
not have hurt anybody in the textile industries here, could not offend 
the labors even though there was objection, but we were too busy to do 
this in the House.
  Mr. Speaker, I will be fighting next year for the people in Haiti.
  Mr. Speaker, I withdraw my reservation of objection.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from New Jersey?
  There was no objection.
  The Clerk read the bill, as follows:

                               H.R. 3818

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Microenterprise Results and 
     Accountability Act of 2004''.

     SEC. 2. FINDINGS AND POLICY.

       Congress finds and declares the following:
       (1) Congress has demonstrated its support for 
     microenterprise development assistance programs through the 
     enactment of two comprehensive microenterprise laws:
       (A) The Microenterprise for Self-Reliance Act of 2000 
     (title I of Public Law 106-309; 114 Stat. 1082).
       (B) Public Law 108-31 (an Act entitled ``An Act to amend 
     the Microenterprise for Self-Reliance Act of 2000 and the 
     Foreign Assistance Act of 1961 to increase assistance for the 
     poorest people in developing countries under microenterprise 
     assistance program under those Acts,

[[Page 25167]]

     and for other purposes'', approved June 17, 2003).
       (2) The United States Agency for International Development, 
     the agency responsible for implementing microenterprise 
     development assistance programs authorized under sections 108 
     and 131 of the Foreign Assistance Act of 1961 (22 U.S.C. 
     2151f and 2152a), is not presently organized to adequately 
     coordinate, implement, and monitor such programs, as 
     evidenced by the late submission by the Agency of the report 
     required by section 108 of the Microenterprise for Self-
     Reliance Act of 2000.
       (3) The Comptroller General, in a report dated November 
     2003, found that the United States Agency for International 
     Development has met some, but not all, of the key objectives 
     of such microenterprise development assistance programs.
       (4) The Comptroller General's report found, among other 
     things, the following:
       (A) Microenterprise development assistance generally can 
     help alleviate some impacts of poverty, improve income levels 
     and quality of life for borrowers and provide poor 
     individuals, workers, and their families with an important 
     coping mechanism.
       (B) Although studies and academic analyses funded by the 
     United States Agency for International Development have found 
     that microenterprise activities generally serve the poor 
     clustered around the poverty line, few loans appear to be 
     reaching the very poor.
       (C) Microenterprise development assistance programs of the 
     United States Agency for International Development have 
     encouraged women's participation in microfinance projects 
     and, according to data of the Agency, women have comprised 
     two-thirds or more of the micro-loan clients in Agency-funded 
     microenterprise projects since 1997.
       (5)(A) The Comptroller General's report recommends that the 
     Administrator of the United States Agency for International 
     Development review the Agency's ``microenterprise results 
     reporting'' system with the goal of ensuring that its annual 
     reporting is complete and accurate.
       (B) Specifically, the Administrator should review and 
     reconsider the methodologies used for the collection, 
     analysis, and reporting of data on annual spending targets, 
     outreach to the very poor, sustainability of microfinance 
     institutions, and the contribution of Agency's funding to the 
     institutions it supports.

     SEC. 3. MICROENTERPRISE DEVELOPMENT ASSISTANCE.

        Chapter 2 of part I of the Foreign Assistance Act of 1961 
     (22 U.S.C. 2166 et seq.) is amended by inserting after title 
     V the following new title:

           ``TITLE VI--MICROENTERPRISE DEVELOPMENT ASSISTANCE

     ``SEC. 251. FINDINGS AND POLICY.

       ``Congress finds and declares the following:
       ``(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 services.
       ``(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.
       ``(5) Microenteprise programs have been successful and 
     should continue to empower vulnerable women in the developing 
     world. Such programs should take into account the risks faced 
     by women who are potential victims of severe forms of 
     trafficking and the need for assistance for women who become 
     victims of severe forms of trafficking, as provided for in 
     section 106(a)(1) of the Trafficking Victims Protection Act 
     of 2000 (22 U.S.C. 7104(a)(1); Public Law 106-386).
       ``(6) Given that microenterprise programs have been 
     successful in empowering disenfranchised groups such as 
     women, microenterprise programs should also target 
     populations disenfranchised due to race or ethnicity in 
     countries where a strong relationship between poverty and 
     race or ethnicity has been demonstrated, such as countries in 
     Latin America.

     ``SEC. 252. AUTHORIZATION; IMPLEMENTATION; TARGETED 
                   ASSISTANCE.

       ``(a) Authorization.--The President is authorized to 
     provide assistance on a grant basis for programs in 
     developing countries to increase the availability of credit, 
     savings, and other services to microenterprises lacking full 
     access to capital, training, technical assistance, and 
     business development services, through--
       ``(1) grants to microfinance institutions for the purpose 
     of expanding the availability of credit, savings, and other 
     financial services to microentreprise clients;
       ``(2) grants to microenterprise institutions for the 
     purpose of training, technical assistance, and business 
     development services for microenterprises to enable them to 
     make better use of credit, to better manage their 
     enterprises, to conduct market analysis and product 
     development for expanding domestic and international sales, 
     particularly to United States markets, and to increase their 
     income and build their assets;
       ``(3) capacity-building for microenterprise institutions in 
     order to enable them to better meet the credit, savings, and 
     training needs of microentreprise clients; and
       ``(4) policy and regulatory programs at the country level 
     that improve the environment for microentreprise clients and 
     microenterprise institutions that serve the poor and very 
     poor.
       ``(b) Implementation.--
       ``(1) Office of microenterprise development.--
       ``(A) Establishment.--There is established within the 
     Agency an Office of Microenterprise Development, which shall 
     be headed by a Director who shall be appointed by the 
     Administrator and who should possess technical expertise and 
     ability to offer leadership in the field of microenterprise 
     development.
       ``(B) Duties.--The Office shall coordinate and be 
     responsible for the provision of assistance under this title.
       ``(2) Assistance through grants to eligible 
     organizations.--Assistance under subsection (a) shall be 
     provided through grants executed, approved, or reviewed by 
     the Office to eligible implementing partner organizations 
     that have a capacity to develop and implement microenterprise 
     programs.
       ``(3) Review and approval.--With respect to assistance 
     under subsection (a) that is furnished through field missions 
     of the Agency, the Office shall be responsible for--
       ``(A) reviewing or approving each grant agreement prior to 
     obligation of funds under the agreement in order to ensure 
     that activities to be carried out using such funds are 
     efficacious, technically sound, and suitable for the economic 
     and security climate of the country or region where the 
     activities will be conducted; and
       ``(B) approving microenterprise development components of 
     strategic plans of missions, bureaus, and offices of the 
     Agency.
       ``(c) Targeted Assistance.--In carrying out sustainable 
     poverty-focused programs under subsection (a), 50 percent of 
     all microenterprise resources shall be targeted to very poor 
     clients, defined as those individuals living in the bottom 50 
     percent below the poverty line as established by the national 
     government of the country. Specifically, such resources shall 
     be used for--
       ``(1) support of programs under this section through 
     practitioner institutions that--
       ``(A) provide credit and other financial services to 
     clients who are very poor, with loans in 1995 United States 
     dollars of--
       ``(i) $1,000 or less in the Europe and Eurasia region;
       ``(ii) $400 or less in the Latin America region; and
       ``(iii) $300 or less in the rest of the world; and
       ``(B) can cover their costs in a reasonable time period; or
       ``(2) demand-driven business development programs that 
     achieve reasonable cost recovery that are provided to clients 
     holding poverty loans (as defined by the regional poverty 
     loan limitations in paragraph (1)(A)), whether they are 
     provided by microfinance institutions or by specialized 
     business development services providers.
       ``(d) Support for Central Mechanisms.--The Administrator 
     should increase the use of central mechanisms through 
     microenterprise, microfinance, and practitioner institutions 
     in the implementation of this title.

     ``SEC. 253. MONITORING SYSTEM.

       ``(a) Establishment.--In order to maximize the sustainable 
     development impact of assistance authorized under section 
     252(a), the Administrator of the Agency, acting through the 
     Director of the Office, shall establish a monitoring system 
     that meets the requirements of subsection (b).
       ``(b) Requirements.--The requirements referred to in 
     subsection (a) are the following:
       ``(1) The monitoring system establishes performance goals 
     for the assistance and expresses such goals in an objective 
     and quantifiable form, to the extent feasible.
       ``(2) The monitoring system establishes performance 
     indicators to be used in measuring or assessing the 
     achievement of the performance goals described in paragraph 
     (1) and the objectives of the assistance authorized under 
     section 252.
       ``(3) The monitoring system provides a basis for 
     recommendations for adjustments to the assistance to enhance 
     the sustainability and the impact of the assistance, 
     particularly the impact of such assistance on the very poor, 
     particularly poor women.
       ``(4) The monitoring system adopts the widespread use of 
     proven and effective poverty assessment tools to successfully 
     identify the very poor and ensure that they receive adequate 
     access to microenterprise loans, savings, and assistance.

     ``SEC. 254. DEVELOPMENT AND CERTIFICATION OF POVERTY 
                   MEASUREMENT METHODS; APPLICATION OF METHODS.

       ``(a) Development and Certification.--
       ``(1) In general.--The Administrator of the Agency, in 
     consultation with microenterprise institutions and other 
     appropriate organizations, shall develop no fewer than two 
     low-cost methods for eligible implementing partner 
     organizations to use to assess the poverty levels of their 
     current or prospective clients. The Administrator shall 
     develop poverty indicators that correlate with the 
     circumstances of the very poor.
       ``(2) Field testing.--The Administrator shall field-test 
     the methods developed under paragraph (1). 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.
       ``(3) Certification.--Not later than October 1, 2004, the 
     Administrator shall, from among the low-cost poverty 
     measurement methods developed under paragraph (1), certify no 
     fewer than

[[Page 25168]]

     two such methods as approved methods for measuring the 
     poverty levels of current or prospective clients of 
     microenterprise institutions for purposes of assistance under 
     section 252.
       ``(b) Application.--The Administrator shall require that, 
     with reasonable exceptions, all eligible implementing partner 
     organizations applying for microenterprise assistance under 
     this title use one of the certified methods, beginning not 
     later than October 1, 2005, to determine and report the 
     poverty levels of current or prospective clients.

     ``SEC. 255. AUTHORIZATION OF APPROPRIATIONS; ADDITIONAL 
                   AUTHORITIES.

       ``(a) Authorization of Appropriations.--There are 
     authorized to be appropriated to the President to carry out 
     this subtitle $200,000,000 for fiscal year 2005 and such sums 
     as may be necessary for fiscal year 2006.
       ``(b) Additional Authorities.--(1) Amounts appropriated 
     pursuant to the authorization of appropriations under 
     subsection (a)--
       ``(A) may be referred to as the `Microenterprise 
     Development Assistance Account';
       ``(B) shall be allocated to the Office, and upon approval 
     by the Director of the Office, may be reallocated to field 
     missions of the Agency in furtherance of the purposes of this 
     title;
       ``(C) are authorized to remain available until expended; 
     and
       ``(D) are in addition to amounts otherwise available for 
     such purposes.
       ``(2) Notwithstanding any other provision of law, amounts 
     made available for assistance for microenterprise development 
     assistance under any provision of law other than this title 
     may be provided to further the purposes of this title. To the 
     extent assistance described in the preceding sentence is 
     provided in accordance with such sentence, the Administrator 
     of the Agency shall include, as part of the report required 
     under section 258, a detailed description of such assistance 
     and, to the extent applicable, the information required by 
     paragraphs (1) through (10) of subsection (b) of such section 
     with respect to such assistance.''.

     SEC. 4. MICROENTERPRISE DEVELOPMENT CREDITS.

       (a) Transfer.--Section 108 of the Foreign Assistance Act of 
     1961 (22 U.S.C. 2151f) is hereby--
       (1) transferred from chapter 1 of part I of the Foreign 
     Assistance Act of 1961 to title VI of chapter 2 of part I of 
     such Act (as added by section 3 of this Act); and
       (2) inserted after section 255 of the Foreign Assistance 
     Act of 1961.
       (b) Redesignation.--Title VI of chapter 2 of part I of the 
     Foreign Assistance Act of 1961 is amended by redesignating 
     section 108 (as added by subsection (a)) as section 256.
       (c) Conforming Amendments.--Title VI of chapter 2 of part I 
     of the Foreign Assistance Act of 1961 is amended--
       (1) by inserting after the title heading the following:

                   ``Subtitle A--Grant Assistance'';

       (2) by inserting after section 255 the following:

                 ``Subtitle B--Credit Assistance''; and

       (3) in section 256 (as redesignated by subsection (b))--
       (A) in the matter preceding paragraph (1) of subsection 
     (c), by striking ``Administrator of the agency primarily 
     responsible for administering this part'' and inserting 
     ``Administrator of the Agency''; and
       (B) in subsection (f)(1)--
       (i) by striking ``section 131'' and inserting ``this 
     part''; and
       (ii) by striking ``2001 through 2004'' and inserting ``2005 
     and 2006''.

     SEC. 5. UNITED STATES MICROFINANCE LOAN FACILITY.

       (a) Transfer.--Section 132 of the Foreign Assistance Act of 
     1961 (22 U.S.C. 2152b) is hereby--
       (1) transferred from chapter 1 of part I of the Foreign 
     Assistance Act of 1961 to title VI of chapter 2 of part I of 
     such Act (as added by section 3 of this Act); and
       (2) inserted after section 256 of the Foreign Assistance 
     Act of 1961 (as added by section 4 of this Act).
       (b) Redesignation.--Title VI of chapter 2 of part I of the 
     Foreign Assistance Act of 1961 is amended by redesignating 
     section 132 (as added by subsection (a)) as section 257.
       (c) Conforming Amendments.--Title VI of chapter 2 of part I 
     of the Foreign Assistance Act of 1961 is amended--
       (1) by inserting after section 256 the following:

     ``Subtitle C--United States Microfinance Loan Facility''; and

       (2) in section 257 (as redesignated by subsection (b))--
       (A) in subsection (b)(3), by striking ``2001 and 2002'' and 
     inserting ``2005 and 2006'';
       (B) in the matter preceding subparagraph (A) of subsection 
     (d)(1), by striking ``the fiscal year 2001'' and inserting 
     ``each of the fiscal years 2005 and 2006''; and
       (C) by striking subsection (e).

     SEC. 6. MISCELLANEOUS PROVISIONS.

       Title VI of chapter 2 of part I of the Foreign Assistance 
     Act of 1961 (as added by section 3 of this Act and amended by 
     sections 4 and 5 of this Act) is further amended by adding at 
     the end the following new subtitle:

                 ``Subtitle D--Miscellaneous Provisions

     ``SEC. 258. REPORT.

       ``(a) In General.--Not later than December 31, 2005, and 
     each December 31 thereafter, the Administrator of the Agency 
     shall submit to the appropriate congressional committees a 
     report that contains a detailed description of the 
     implementation of this title for the previous fiscal year.
       ``(b) Contents.--The report shall contain the following:
       ``(1) The number of grants provided under section 252, with 
     a listing of--
       ``(A) the amount of each grant;
       ``(B) the name of each implementing partner organization; 
     and
       ``(C) a listing of the number of countries receiving 
     assistance authorized by sections 252.
       ``(2) The results of the monitoring system required under 
     section 253.
       ``(3) The process of developing and applying poverty 
     assessment procedures required under section 254.
       ``(4) The percentage of assistance furnished under section 
     252 that was allocated to the very poor based on the data 
     collected using the certified methods required by section 
     254.
       ``(5) The absolute number of the very poor reached with 
     assistance furnished under section 252.
       ``(6) The amount of assistance provided under section 252 
     through central mechanisms.
       ``(7) The name of each country that receives assistance 
     under section 256 and the amount of such assistance.
       ``(8) An estimate of the percentage of beneficiaries of 
     assistance under this title who are women, including, to the 
     extent practicable, the percentage of these women who have 
     been victims of sex trafficking, as well as information on 
     efforts to provide assistance under this title to women who 
     have been victims of severe forms of trafficking or who were 
     previously involved in prostitution.
       ``(9) Any additional information relating to the provision 
     of assistance authorized by this title, including the use of 
     the poverty measurement tools required by section 254, or 
     additional information on assistance provided by the United 
     States to support microenterprise development under this 
     title or any other provision of law.
       ``(10) An estimate of the percentage of beneficiaries of 
     assistance under this title in countries where a strong 
     relationship between poverty and race or ethnicity has been 
     demonstrated.
       ``(c) Limitation.--The content of the report required by 
     this section shall be produced by the Office established 
     under section 252(b)(1), and shall be made available for free 
     electronic distribution through such Office.

     ``SEC. 259. DEFINITIONS.

       `` In this title:
       ``(1) Administrator.--The term `Administrator' means the 
     Administrator of the Agency.
       ``(2) Agency.--The term `Agency' means the United States 
     Agency for International Development.
       ``(3) Appropriate congressional committees.--The term 
     `appropriate congressional committees' means the Committee on 
     International Relations of the House of Representatives and 
     the Committee on Foreign Relations of the Senate.
       ``(4) Business development services.--The term `business 
     development services' means support for the growth of 
     microenterprises through training, technical assistance, 
     marketing assistance, improved production technologies, and 
     other related services.
       ``(5) Director.--The term `Director' means the Director of 
     the Office.
       ``(6) Eligible implementing partner organization.--The term 
     `eligible implementing partner organization' means an entity 
     eligible to receive assistance under this title which is--
       ``(A) a United States or an indigenous private voluntary 
     organization;
       ``(B) a United States or an indigenous credit union;
       ``(C) a United States or an indigenous cooperative 
     organization;
       ``(D) an indigenous governmental or nongovernmental 
     organization;
       ``(E) a microenterprise institution;
       ``(F) a microfinance institution; or
       ``(G) a practitioner institution.
       ``(7) Microenterprise institution.--The term 
     `microenterprise institution' means a not-for-profit entity 
     that provides services, including microfinance, training, or 
     business development services, for microentreprise clients in 
     foreign countries.
       ``(8) Microfinance institution.--The term `microfinance 
     institution' means a not-for-profit entity or a regulated 
     financial intermediary that directly provides, or works to 
     expand, the availability of credit, savings, and other 
     financial services to microentreprise clients in foreign 
     countries.
       ``(9) Microfinance network.--The term `microfinance 
     network' means an affiliated group of practitioner 
     institutions that provides services to its members, including 
     financing, technical assistance, and accreditation, for the 
     purpose of promoting the financial sustainability and 
     societal impact of microenterprise assistance.
       ``(10) Office.--The term `Office' means the Office of 
     Microenterprise Development established under section 
     252(b)(1).
       ``(11) Practitioner institution.--The term `practitioner 
     institution' means a not-for-profit entity or a regulated 
     financial intermediary, including a microfinance network, 
     that provides services, including microfinance, training, or 
     business development services, for microentreprise clients, 
     or provides assistance to microenterprise institutions in 
     foreign countries.
       ``(12) Private voluntary organization.--The term `private 
     voluntary organization' means a not-for-profit entity that--
       ``(A) engages in and supports activities of an economic or 
     social development or humanitarian nature for citizens in 
     foreign countries; and

[[Page 25169]]

       ``(B) is incorporated as such under the laws of the United 
     States, including any of its states, territories or the 
     District of Columbia, or of a foreign country.
       ``(13) United states-supported microfinance institution.--
     The term `United States- supported microfinance institution' 
     means a financial intermediary that has received funds made 
     available under this part for fiscal year 1980 or any 
     subsequent fiscal year.
       ``(14) 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. 7. REPEALS.

       (a) Foreign Assistance Act of 1961.--Section 131 of the 
     Foreign Assistance Act of 1961 (22 U.S.C. 2152a) is hereby 
     repealed.
       (b) Public Law 108-31.--
       (1) In general.--Section 4 of Public Law 108-31 (22 U.S.C. 
     2151f note) is amended by striking subsection (b).
       (2) Conforming amendment.--Section 4 of Public Law 108-31 
     is amended by striking ``(a)'' and all that follows through 
     ``Not later'' and inserting ``Not later''.

     SEC. 8. REFERENCES.

       Any reference in a law, regulation, agreement, or other 
     document of the United States to section 108, 131, or 132 of 
     the Foreign Assistance Act of 1961 shall be deemed to be a 
     reference to subtitle B of title VI of chapter 2 of part I of 
     the Foreign Assistance Act of 1961, subtitle A of title VI of 
     chapter 2 of part I of such Act, or subtitle C of title VI of 
     chapter 2 of part I of such Act, respectively.

  Amendment In The Nature of a Substitute Offered By Mr. Smith Of New 
                                 Jersey

  Mr. SMITH of New Jersey. Mr. Speaker, I offer an amendment in the 
nature of a substitute in lieu of the amendment reported by the 
Committee on International Relations.
  The SPEAKER pro tempore. The Clerk will report the amendment in lieu 
of the committee amendment.
  The Clerk read as follows:

       Amendment in the nature of a substitute offered by Mr. 
     Smith of New Jersey:
       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Microenterprise Results and 
     Accountability Act of 2004''.

     SEC. 2. FINDINGS AND POLICY.

       Congress finds and declares the following:
       (1) Congress has demonstrated its support for 
     microenterprise development assistance programs through the 
     enactment of two comprehensive microenterprise laws:
       (A) The Microenterprise for Self-Reliance Act of 2000 
     (title I of Public Law 106-309; 114 Stat. 1082).
       (B) Public Law 108-31 (an Act entitled ``An Act to amend 
     the Microenterprise for Self-Reliance Act of 2000 and the 
     Foreign Assistance Act of 1961 to increase assistance for the 
     poorest people in developing countries under microenterprise 
     assistance program under those Acts, and for other 
     purposes'', approved June 17, 2003).
       (2) The report on the effectiveness of the United States 
     Agency for International Development's microfinance program, 
     prepared by the Consultative Group to Assist the Poor, rated 
     the Agency in the top tier of the 17 donors in this field.
       (3) The Comptroller General, in a report dated November 
     2003, found that the United States Agency for International 
     Development has met some, but not all, of the key objectives 
     of such microenterprise development assistance programs.
       (4) The Comptroller General's report found, among other 
     things, the following:
       (A) Microenterprise development assistance generally can 
     help alleviate some impacts of poverty, improve income levels 
     and quality of life for borrowers and provide poor 
     individuals, workers, and their families with an important 
     coping mechanism.
       (B) Microenterprise development assistance programs of the 
     United States Agency for International Development have 
     encouraged women's participation in microfinance projects 
     and, according to data of the Agency, women have comprised 
     two-thirds or more of the micro-loan clients in Agency-funded 
     microenterprise projects since 1997.
       (5)(A) The Comptroller General's report recommends that the 
     Administrator of the United States Agency for International 
     Development review the Agency's ``microenterprise results 
     reporting'' system with the goal of ensuring that its annual 
     reporting is complete and accurate.
       (B) Specifically, the Administrator should review and 
     reconsider the methodologies used for the collection, 
     analysis, and reporting of data on annual spending targets, 
     outreach to the very poor, sustainability of microfinance 
     institutions, and the contribution of Agency's funding to the 
     institutions it supports.

     SEC. 3. MICROENTERPRISE DEVELOPMENT ASSISTANCE.

        Chapter 2 of part I of the Foreign Assistance Act of 1961 
     (22 U.S.C. 2166 et seq.) is amended by inserting after title 
     V the following new title:

           ``TITLE VI--MICROENTERPRISE DEVELOPMENT ASSISTANCE

     ``SEC. 251. FINDINGS AND POLICY.

       ``Congress finds and declares the following:
       ``(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 services.
       ``(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.
       ``(5) Microenterprise programs have been successful and 
     should continue to empower vulnerable women in the developing 
     world. The Agency should work to ensure that recipients of 
     microenterprise and microfinance development assistance under 
     this title communicate and work with nongovernmental 
     organizations and government organizations to identify and 
     assist victims of trafficking as provided for in section 
     106(a)(1) of the Trafficking Victims Protection Act of 2000 
     (22 U.S.C. 7104(a)(1); Public Law 106-386) and women who are 
     victims of or susceptible to other forms of exploitation and 
     violence.
       ``(6) Given that microenterprise programs have been 
     successful in empowering disenfranchised groups such as 
     women, microenterprise programs should also target 
     populations disenfranchised due to race or ethnicity in 
     countries where a strong relationship between poverty and 
     race or ethnicity has been demonstrated, such as countries in 
     Latin America.

     ``SEC. 252. AUTHORIZATION; IMPLEMENTATION; TARGETED 
                   ASSISTANCE.

       ``(a) Authorization.--The President is authorized to 
     provide assistance on a non-reimbursable basis for programs 
     in developing countries to increase the availability of 
     credit, savings, and other services to microfinance and 
     microenterprise clients lacking full access to capital, 
     training, technical assistance, and business development 
     services, through--
       ``(1) assistance for the purpose of expanding the 
     availability of credit, savings, and other financial and non-
     financial services to microfinance and microenterprise 
     clients;
       ``(2) assistance for the purpose of training, technical 
     assistance, and business development services for 
     microenterprises to enable them to make better use of credit, 
     to better manage their enterprises, to conduct market 
     analysis and product development for expanding domestic and 
     international sales, particularly to United States markets, 
     and to increase their income and build their assets;
       ``(3) capacity-building for microfinance and 
     microenterprise institutions in order to enable them to 
     better meet the credit, savings, and training needs of 
     microfinance and microenterprise clients; and
       ``(4) policy, regulatory programs, and research at the 
     country level that improve the environment for microfinance 
     and microenterprise clients and institutions that serve the 
     poor and very poor.
       ``(b) Implementation.--
       ``(1) Office of microenterprise development.--There is 
     established within the Agency an office of microenterprise 
     development, which shall be headed by a Director who shall be 
     appointed by the Administrator and who should possess 
     technical expertise and ability to offer leadership in the 
     field of microenterprise development.
       ``(2) Additional provisions.--
       ``(A) Use of implementing partner organizations.--
     Assistance under this section shall emphasize the use of 
     implementing partner organizations that best meet the 
     requirements of subparagraph (C).
       ``(B) Use of central funding mechanisms.--
       ``(i) Program.--In order to ensure that assistance under 
     this title is distributed effectively and efficiently, the 
     office shall also seek to implement a program of central 
     funding under which assistance is administered directly by 
     the office, including through targeted core support for 
     microfinance and microenterprise networks and other 
     practitioners.
       ``(ii) Funding.--Of the amount made available to carry out 
     this subtitle for a fiscal year, not less than $25,000,000 
     should be made available to carry out clause (i).
       ``(C) Efficiency and cost-effectiveness.--Assistance under 
     this section shall meet high standards of efficiency, cost-
     effectiveness, and sustainability and shall especially 
     provide the greatest possible resources to the poor and very 
     poor. When administering assistance under this section, the 
     Administrator shall--
       ``(i) take into consideration the percentage of funds a 
     provider of assistance intends to expend on administrative 
     costs;

[[Page 25170]]

       ``(ii) take all appropriate steps to ensure that the 
     provider of assistance keeps administrative costs as low as 
     practicable to ensure the maximum amount of funds are used 
     for directly assisting microfinance and microenterprise 
     clients, for establishing sustainable microfinance and 
     microenterprise institutions, or for advancing the 
     microenterprise development field; and
       ``(iii) give preference to proposals from providers of 
     assistance that are the most technically competitive and have 
     a reasonable allocation to overhead and administrative costs.
       ``(3) Approval of strategic plans.--With respect to 
     assistance provided under this section, the office shall be 
     responsible for concurring in the microenterprise development 
     components of strategic plans of missions, bureaus, and other 
     offices of the Agency and providing technical support to 
     field missions to help the missions prepare such components.
       ``(c) Targeted Assistance.--In carrying out sustainable 
     poverty-focused programs under subsection (a), 50 percent of 
     all microenterprise resources shall be targeted to clients 
     who are very poor. Specifically, until September 30, 2006, 
     such resources shall be used for--
       ``(1) support of programs under this section through 
     practitioner institutions that--
       ``(A) provide credit and other financial services to 
     clients who are very poor, with loans in 1995 United States 
     dollars of--
       ``(i) $1,000 or less in the Europe and Eurasia region;
       ``(ii) $400 or less in the Latin America region; and
       ``(iii) $300 or less in the rest of the world; and
       ``(B) can cover their costs in a reasonable time period; or
       ``(2) demand-driven business development programs that 
     achieve reasonable cost recovery that are provided to clients 
     holding poverty loans (as defined by the regional poverty 
     loan limitations in paragraph (1)(A)), whether they are 
     provided by microfinance institutions or by specialized 
     business development services providers.

     ``SEC. 253. MONITORING SYSTEM.

       ``(a) In General.--In order to maximize the sustainable 
     development impact of assistance authorized under section 
     252(a), the Administrator of the Agency, acting through the 
     Director of the office, shall strengthen its monitoring 
     system to meet the requirements of subsection (b).
       ``(b) Requirements.--The requirements referred to in 
     subsection (a) are the following:
       ``(1) The monitoring system shall include performance goals 
     for the assistance and expresses such goals in an objective 
     and quantifiable form, to the extent feasible.
       ``(2) The monitoring system shall include performance 
     indicators to be used in measuring or assessing the 
     achievement of the performance goals described in paragraph 
     (1) and the objectives of the assistance authorized under 
     section 252.
       ``(3) The monitoring system provides a basis for 
     recommendations for adjustments to the assistance to enhance 
     the sustainability and the impact of the assistance, 
     particularly the impact of such assistance on the very poor, 
     particularly poor women.
       ``(4) The monitoring system adopts the widespread use of 
     proven and effective poverty assessment tools to successfully 
     identify the very poor and ensure that they receive adequate 
     access to microenterprise loans, savings, and assistance.

     ``SEC. 254. DEVELOPMENT AND CERTIFICATION OF POVERTY 
                   MEASUREMENT METHODS; APPLICATION OF METHODS.

       ``(a) Development and Certification.--
       ``(1) In general.--The Administrator of the Agency, in 
     consultation with microenterprise institutions and other 
     appropriate organizations, shall develop no fewer than two 
     low-cost methods for implementing partner organizations to 
     use to assess the poverty levels of their current incoming or 
     prospective clients. The Administrator shall develop poverty 
     indicators that correlate with the circumstances of the very 
     poor.
       ``(2) Field testing.--The Administrator shall field-test 
     the methods developed under paragraph (1). 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.
       ``(3) Certification.--Not later than April 1, 2005, the 
     Administrator shall, from among the low-cost poverty 
     measurement methods developed under paragraph (1), certify no 
     fewer than two such methods as approved methods for measuring 
     the poverty levels of current, incoming, or prospective 
     clients of microenterprise institutions for purposes of 
     assistance under section 252.
       ``(b) Application.--The Administrator shall require that, 
     with reasonable exceptions, all implementing partner 
     organizations applying for microenterprise assistance under 
     this title use one of the certified methods, beginning not 
     later than October 1, 2006, to determine and report the 
     poverty levels of current, incoming, or prospective clients.

     ``SEC. 255. ADDITIONAL AUTHORITIES.

       ``Notwithstanding any other provision of law, amounts made 
     available for assistance for microenterprise development 
     assistance under any provision of law other than this title 
     may be provided to further the purposes of this title. To the 
     extent assistance described in the preceding sentence is 
     provided in accordance with such sentence, the Administrator 
     of the Agency shall include, as part of the report required 
     under section 258, a detailed description of such assistance 
     and, to the extent applicable, the information required by 
     paragraphs (1) through (11) of subsection (b) of such section 
     with respect to such assistance.''.

     SEC. 4. MICROENTERPRISE DEVELOPMENT CREDITS.

       (a) Transfer.--Section 108 of the Foreign Assistance Act of 
     1961 (22 U.S.C. 2151f) is hereby--
       (1) transferred from chapter 1 of part I of the Foreign 
     Assistance Act of 1961 to title VI of chapter 2 of part I of 
     such Act (as added by section 3 of this Act); and
       (2) inserted after section 255 of the Foreign Assistance 
     Act of 1961.
       (b) Redesignation.--Title VI of chapter 2 of part I of the 
     Foreign Assistance Act of 1961 is amended by redesignating 
     section 108 (as added by subsection (a)) as section 256.
       (c) Conforming Amendments.--Title VI of chapter 2 of part I 
     of the Foreign Assistance Act of 1961 is amended--
       (1) by inserting after the title heading the following:

                   ``Subtitle A--Grant Assistance'';

       (2) by inserting after section 255 the following:

                 ``Subtitle B--Credit Assistance''; and

       (3) in section 256 (as redesignated by subsection (b))--
       (A) in the matter preceding paragraph (1) of subsection 
     (c), by striking ``Administrator of the agency primarily 
     responsible for administering this part'' and inserting 
     ``Administrator of the Agency''; and
       (B) in subsection (f)(1)--
       (i) by striking ``section 131'' and inserting ``this 
     part''; and
       (ii) by striking ``$1,500,000 for each of fiscal years 2001 
     through 2004'' and inserting ``such sums as may be necessary 
     for each of the fiscal years 2005 through 2009''.

     SEC. 5. UNITED STATES MICROFINANCE LOAN FACILITY.

       (a) Transfer.--Section 132 of the Foreign Assistance Act of 
     1961 (22 U.S.C. 2152b) is hereby--
       (1) transferred from chapter 1 of part I of the Foreign 
     Assistance Act of 1961 to title VI of chapter 2 of part I of 
     such Act (as added by section 3 of this Act); and
       (2) inserted after section 256 of the Foreign Assistance 
     Act of 1961 (as added by section 4 of this Act).
       (b) Redesignation.--Title VI of chapter 2 of part I of the 
     Foreign Assistance Act of 1961 is amended by redesignating 
     section 132 (as added by subsection (a)) as section 257.
       (c) Conforming Amendments.--Title VI of chapter 2 of part I 
     of the Foreign Assistance Act of 1961 is amended--
       (1) by inserting after section 256 the following:

     ``Subtitle C--United States Microfinance Loan Facility''; and

       (2) in section 257 (as redesignated by subsection (b))--
       (A) in subsection (b)(3), by striking ``2001 and 2002'' and 
     inserting ``2005 through 2009'';
       (B) in the matter preceding subparagraph (A) of subsection 
     (d)(1), by striking ``this part for the fiscal year 2001, up 
     to $5,000,000'' and inserting ``this part for each of the 
     fiscal years 2005 through 2009, such sums as may be 
     necessary''; and
       (C) by striking subsection (e).

     SEC. 6. MISCELLANEOUS PROVISIONS.

       Title VI of chapter 2 of part I of the Foreign Assistance 
     Act of 1961 (as added by section 3 of this Act and amended by 
     sections 4 and 5 of this Act) is further amended by adding at 
     the end the following new subtitle:

                 ``Subtitle D--Miscellaneous Provisions

     ``SEC. 258. REPORT.

       ``(a) In General.--Not later than June 30, 2006, and each 
     June 30 thereafter, the Administrator of the Agency, acting 
     through the Director of the office, shall submit to the 
     appropriate congressional committees a report that contains a 
     detailed description of the implementation of this title for 
     the previous fiscal year.
       ``(b) Contents.--The report shall contain the following:
       ``(1) The number of grants, cooperative agreements, 
     contracts, contributions, or other form of assistance 
     provided under section 252, with a listing of--
       ``(A) the amount of each grant, cooperative agreement, 
     contract, contribution, or other form of assistance;
       ``(B) the name of each recipient and each developing 
     country with respect to which projects or activities under 
     the grant, cooperative agreement, contract, contribution, or 
     other form of assistance were carried out; and
       ``(C) a listing of the number of countries receiving 
     assistance authorized by section 252.
       ``(2) The results of the monitoring system required under 
     section 253.
       ``(3) The process of developing and applying poverty 
     assessment procedures required under section 254.
       ``(4) The percentage of assistance furnished under section 
     252 that was allocated to the very poor based on the data 
     collected using the certified methods required by section 
     254.

[[Page 25171]]

       ``(5) The estimated number of the very poor reached with 
     assistance provided under section 252.
       ``(6) The amount of assistance provided under section 252 
     through central mechanisms.
       ``(7) The name of each country that receives assistance 
     under section 256 and the amount of such assistance.
       ``(8) Information on the efforts of the Agency to ensure 
     that recipients of United States microenterprise and 
     microfinance development assistance work closely with 
     nongovernmental organizations and foreign governments to 
     identify and assist victims or potential victims of severe 
     forms of trafficking in persons and women who are victims of 
     or susceptible to other forms of exploitation and violence.
       ``(9) Any additional information relating to the provision 
     of assistance authorized by this title, including the use of 
     the poverty measurement tools required by section 254, or 
     additional information on assistance provided by the United 
     States to support microenterprise development under this 
     title or any other provision of law.
       ``(10) An estimate of the percentage of beneficiaries of 
     assistance under this title in countries where a strong 
     relationship between poverty and race or ethnicity has been 
     demonstrated.
       ``(11) The level of funding provided through contracts, the 
     level of funding provided through grants, contracts, and 
     cooperative agreements that is estimated to be subgranted or 
     subcontracted, as the case may be, to direct service 
     providers, and an analysis of the comparative cost-
     effectiveness and sustainability of projects carried out 
     under these mechanisms.
       ``(c) Availability to Public.--The report required by this 
     section shall be made available to the public on the Internet 
     website of the Agency.

     ``SEC. 259. DEFINITIONS.

       `` In this title:
       ``(1) Administrator.--The term `Administrator' means the 
     Administrator of the Agency.
       ``(2) Agency.--The term `Agency' means the United States 
     Agency for International Development.
       ``(3) Appropriate congressional committees.--The term 
     `appropriate congressional committees' means the Committee on 
     International Relations of the House of Representatives and 
     the Committee on Foreign Relations of the Senate.
       ``(4) Business development services.--The term `business 
     development services' means support for the growth of 
     microenterprises through training, technical assistance, 
     marketing assistance, improved production technologies, and 
     other related services.
       ``(5) Director.--The term `Director' means the Director of 
     the office.
       ``(6) Implementing partner organization.--The term 
     `implementing partner organization' means an entity eligible 
     to receive assistance under this title which is--
       ``(A) a United States or an indigenous private voluntary 
     organization;
       ``(B) a United States or an indigenous credit union;
       ``(C) a United States or an indigenous cooperative 
     organization;
       ``(D) an indigenous governmental or nongovernmental 
     organization;
       ``(E) a microenterprise institution;
       ``(F) a microfinance institution; or
       ``(G) a practitioner institution.
       ``(7) Microenterprise institution.--The term 
     `microenterprise institution' means a not-for-profit entity 
     that provides services, including microfinance, training, or 
     business development services, for microenterprise clients in 
     foreign countries.
       ``(8) Microfinance institution.--The term `microfinance 
     institution' means a not-for-profit entity or a regulated 
     financial intermediary that directly provides, or works to 
     expand, the availability of credit, savings, and other 
     financial services to microfinance and microenterprise 
     clients in foreign countries.
       ``(9) Microfinance network.--The term `microfinance 
     network' means an affiliated group of practitioner 
     institutions that provides services to its members, including 
     financing, technical assistance, and accreditation, for the 
     purpose of promoting the financial sustainability and 
     societal impact of microenterprise assistance.
       ``(10) Office.--The term `office' means the office of 
     microenterprise development established under section 
     252(b)(1).
       ``(11) Practitioner institution.--The term `practitioner 
     institution' means a not-for-profit entity or a regulated 
     financial intermediary, including a microfinance network, 
     that provides services, including microfinance, training, or 
     business development services, for microfinance and 
     microenterprise clients, or provides assistance to 
     microenterprise institutions in foreign countries.
       ``(12) Private voluntary organization.--The term `private 
     voluntary organization' means a not-for-profit entity that--
       ``(A) engages in and supports activities of an economic or 
     social development or humanitarian nature for citizens in 
     foreign countries; and
       ``(B) is incorporated as such under the laws of the United 
     States, including any of its states, territories or the 
     District of Columbia, or of a foreign country.
       ``(13) United states-supported microfinance institution.--
     The term `United States-supported microfinance institution' 
     means a financial intermediary that has received funds made 
     available under this part for fiscal year 1980 or any 
     subsequent fiscal year.
       ``(14) 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 (as 
     calculated using the purchasing power parity (PPP) exchange 
     rate method).''.

     SEC. 7. SENSE OF CONGRESS.

       It is the sense of Congress that, in carrying out title VI 
     of chapter 2 of part I of the Foreign Assistance Act of 1961 
     (as added by section 3 of this Act and amended by sections 4 
     through 6 of this Act), the Administrator of the United 
     States Agency for International Development--
       (1) where applicable, should ensure that microenterprise 
     development assistance provided under such title is matched 
     by recipients with an equal amount of assistance from non-
     United States Government sources, including private 
     donations, multilateral funding, commercial and concessional 
     borrowing, savings, and program income;
       (2) should include in the report required by section 258 of 
     the Foreign Assistance Act of 1961 (as added by section 6 of 
     this Act) a description of all matching assistance (as 
     described in paragraph (1)) provided for the prior year by 
     recipients of microenterprise development assistance under 
     such title;
       (3) should ensure that recipients of microenterprise 
     development assistance under such title do not expend an 
     unreasonably large percentage of such assistance on 
     administrative costs;
       (4) should not use recipients of microenterprise 
     development assistance under such title to carry out critical 
     management functions of the Agency, including functions such 
     as strategy development or overall management of programs in 
     a country; and
       (5) should consult with the appropriate congressional 
     committees with respect to the implementation of title VI of 
     chapter 2 of part I of the Foreign Assistance Act of 1961 not 
     later than 90 days after the date of the enactment of this 
     Act.

     SEC. 8. REPEALS.

       (a) Foreign Assistance Act of 1961.--Section 131 of the 
     Foreign Assistance Act of 1961 (22 U.S.C. 2152a) is hereby 
     repealed.
       (b) Public Law 108-31.--
       (1) In general.--Section 4 of Public Law 108-31 (22 U.S.C. 
     2151f note) is amended by striking subsection (b).
       (2) Conforming amendment.--Section 4 of Public Law 108-31 
     is amended by striking ``(a)'' and all that follows through 
     ``Not later'' and inserting ``Not later''.

     SEC. 9. REFERENCES.

       Any reference in a law, regulation, agreement, or other 
     document of the United States to section 108, 131, or 132 of 
     the Foreign Assistance Act of 1961 shall be deemed to be a 
     reference to subtitle B of title VI of chapter 2 of part I of 
     the Foreign Assistance Act of 1961, subtitle A of title VI of 
     chapter 2 of part I of such Act, or subtitle C of title VI of 
     chapter 2 of part I of such Act, respectively.

  Mr. SMITH of New Jersey (during the reading). Mr. Speaker, I ask 
unanimous consent that the amendment be considered as read and printed 
in the Record.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from New Jersey?
  There was no objection.
  The amendment in the nature of a substitute was agreed to.
  Mr. SMITH of New Jersey. Mr. Speaker, I yield myself such time as I 
may consume. Mr. Speaker, I rise in support of H.R. 3818, ``The 
Microenterprise Results and Accountability Act of 2004.'' I introduced 
this bill at the beginning of the 108th Congress, and this final 
product represents the culmination of months of hard work and 
discussion by Republicans and Democrats in both the House and Senate, 
members of the microenterprise community, and USAID, to build upon one 
of our most progressive and successful foreign aid programs.
  I would like to thank 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 months--from 
the Foreign Aid appropriations bill to legislation reorganizing our 
intelligence community and better securing our borders to fight the War 
on Terrorism--and I am grateful that our leadership took time to 
schedule this important measure.
  I would like to thank Chairman Hyde, who has shown strong support for 
this bill every step of the way and moved it promptly at the beginning 
of this year. I would also like to thank Mr. Lantos, Mr. Weldon, and 81 
other Members of Congress who cosponsored this legislation.
  Mr. Speaker, this legislation is primarily about ensuring better 
results, not authorizing

[[Page 25172]]

additional money. A comprehensive GAO report completed in November 2003 
revealed that oversight and accountability of microenterprise programs 
administered by AID is weak, and that programs are not having the 
desired effect of reaching the very poor--those earning less than the 
equivalent of $1/day--to the greatest extent possible.
  In response to those concerns, H.R. 3818 builds-in accountability 
through a focus on cost-effectiveness and efficiency. H.R. 3818 
establishes a dedicated Microenterprise Office within USAID which will 
approve strategic plans of field missions, establish a monitoring 
system in order to maximize the impact of programs and measure results, 
and coordinate preparation of a yearly report to Congress. The 
legislation also ensures that more funds go to the ``poorest of the 
poor'' through the development and implementation of easy-to-use, cost-
effective poverty assessment techniques. Identifying and targeting the 
poorest potential clients who would stand to benefit 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 useful not only for microenterprise but also in 
other areas of our foreign aid.
  This bill also stipulates that USAID should emphasize the use of 
global microfinance networks and other non-profit voluntary 
organizations in the implementation of microenterprise and microfinance 
programs. In the last two years, I am concerned that USAID has been 
shifting its focus away from non-profit organizations and networks to 
contractors in the implementation of the Agency's microenterprise 
program. While for-profit entities such as consulting firms are making 
excellent contributions in the areas of technical assistance, research 
and policy reform, global microfinance networks and non-profit 
voluntary organizations have the operational experience and track 
record in microenterprise and microfinance service delivery to poor 
people. These organizations are able to get resources directly to 
clients, and are well positioned to reach the very poorest economically 
active entrepreneurs in the countries where they work. Further, such 
networks have built self-sustaining microfinance institutions that now 
cover, on average, almost all of their operating costs. More than $150 
million in earned revenue was captured by these institutions in 2002 to 
cover their operating costs, in addition to private donations that have 
added significant leverage to USAID's investments. These networks have 
excelled in rapidly developing microfinance institutions in volatile 
and risky situations, including during the early stages of a country's 
transition from war to peace. However, while H.R. 3818 also encourages 
the use of indigenous governmental organizations as implementing 
partners for microenterprise and microfinance programs, these 
governmental organizations should be used only when necessary, 
efficient and effective, and, in particular, only when they use the 
best practices in this field. Since the reforms in H.R. 3818 are so 
comprehensive, we expect USAID will work in close consultation with the 
appropriate Congressional committees and offices regarding this and 
other issues.
  The term ``foreign aid'' often has a bad connotation--and there are 
some good reasons why, too. Many times in the past, foreign aid was 
sent in a ``top-down'' manner to corrupt governments and organizations 
where it never really reached the intended recipients.
  Microenterprise, on the other hand, takes a totally different 
approach. It's a ``trickle-up'' approach that focuses on helping the 
poorest people on the planet build themselves up, little by little, 
into self-sufficiency. The success of microenterprise lending programs 
to empower entrepreneurs and borrowers in the developing world cannot 
be overstated.
  Over two million clients are currently benefiting from USAID-assisted 
programs that provide the necessary capital through small loans, 
usually of a few hundred dollars or less, for entrepreneurs to start 
and expand their own small businesses. It is estimated that 97 percent 
of microenterprise loans are successfully repaid and 70 percent to 
women, who are often very vulnerable, subjected to abuse, and in need 
of economic opportunities in the developing world. Microenterprise is a 
key vehicle to assist victims of trafficking and to raise the social 
and economic status of women around the world.
  Microenterprise also complements the principles President Bush has 
outlined for more effective foreign aid through the Millennium 
Challenge Account. Business owners assisted by micro-lending are not 
only able to increase their own incomes, but through their efforts, 
they create jobs and help economies grow.
  Success stories from the beneficiaries of microenterprise are quite 
numerous. Take for example, Dorothy Eyiah (EYE-ee-ah) from Ghana. 
Dorothy was resourceful, but she had no idea how she was going to 
support her AIDS-stricken sister and family when she brought them into 
her home in Ghana. She used to support herself selling ice, but that 
wasn't going to pay for the food and medicines she now needed. She 
started praying. All doors seemed shut until Dorothy met some women 
within her village who were part of an Opportunity International Trust 
Bank. The Trust Bank could help her grow a small business--providing 
her with financing, training, support. Five loans later, Dorothy is the 
secretary of her Trust Bank and runs 3 businesses, employing 9 people 
from her village. She is content. Her sister is comfortable, all the 
children are in school, and their needs are being met. ``God has been 
so good to me,'' she says.
  Success stories such as this are what microfinance and H.R. 3818 are 
all about. By building the best possible microenterprise program, our 
goal is to reach the greatest possible number of poor people with 
services that truly have an impact on their lives. As we compare the 
effectiveness of various methods of implementation of funds, success 
will be measured by the ability to reach very poor people and other 
underserved populations, including women, and by the kind of impact 
these programs have on poor families. We are concerned not only with 
the efficient delivery of financial services, but also with the well-
being of those who receive those services. We want to see poor people 
work their way out of poverty, increase their income, build their 
assets, and grow their businesses, and we also want to see them educate 
their children, achieve greater self-esteem, strengthen their families, 
and improve the quality of their lives.
  When we provide micro loans for the developing world, we export 
values upon which our nation is based upon, including the ideal that if 
you work hard and dream big, you can succeed. Again, I thank my 
colleagues who have supported this legislation and I urge the rest of 
my colleagues to do the same.
  The bill was ordered to be engrossed and read a third time, was read 
the third time, and passed, and a motion to reconsider was laid on the 
table.

                          ____________________