A bill to amend the Microenterprise for Self-Reliance Act of 2000 and the Foreign Assistance Act of 1961 to increase assistance for the poorest people in developing countries under microenterprise assistance programs under those Acts, and for other purposes.

SECTION 1. AMENDMENTS TO THE MICROENTERPRISE FOR SELF-RELIANCE ACT OF 
              2000.

    (a) Purposes.--Section 103 of the Microenterprise for Self-Reliance 
Act of 2000 (Public Law 106-309) is amended--
            (1) in paragraph (3), by striking ``microentrepreneurs'' 
        and inserting ``microenterprise households'';
            (2) in paragraph (4), by striking ``and'' at the end;
            (3) in paragraph (5)--
                    (A) by striking ``microfinance policy'' and 
                inserting ``microenterprise policy'';
                    (B) by striking ``the poorest of the poor'' and 
                inserting ``the very poor''; and
                    (C) by striking the period at the end and inserting 
                ``; and''; and
            (4) by adding at the end the following:
            ``(6) to ensure that in the implementation of this title at 
        least 50 percent of all microenterprise assistance under this 
        title, and the amendments made under this title, shall be 
        targeted to the very poor.''.
    (b) Definitions.--Section 104 of such Act is amended--
            (1) in paragraph (2), by striking ``for 
        microentrepreneurs'' and inserting ``to microentrepreneurs and 
        their households''; and
            (2) by adding at the end the following:
            ``(5) Very poor.--The term `very poor' means individuals--
                    ``(A) living in the bottom 50 percent below the 
                poverty line established by the national government of 
                the country in which those individuals live; or
                    ``(B) living on the equivalent of less than $1 per 
                day.''.

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

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

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

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

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

Summary: Amends the Microenterprise for Self-Reliance Act of 2000 to make as one of its purposes that in implementation of this Act at least 50 percent of all microenterprise assistance be targeted to the very poor, that is, those persons living either in the bottom 50 percent below the poverty line or on less than the equivalent of one dollar per day. Amends the Foreign Assistance Act of 1964 to authorize the President 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 to expand the availability of savings and credit to poor and low-income households. (2) training programs to enable such institutions to better meet the financial services needs of their clients. And (3) training programs to enable clients to make better use of credit, increase their financial literacy, and to better manage their enterprises to improve their quality of life. Declares that, in order to maximize the sustainable development impact of microenterprise development grant assistance authorized under the Act, the Administrator of the agency primarily responsible for administering such assistance shall establish a monitoring system that, among other things, adopts the widespread use of proven and effective poverty assessment tools to identify the poorest of the poor and ensure that they receive needed microenterprise credits, loans, and assistance. Requires the Administrator of the Agency for International Development to develop and certify no fewer than two low-cost methods for measuring the poverty levels of the current or prospective clients of microenterprise organizations for purposes of the provision of microenterprise development grant assistance.