H. R. 192

One Hundred Eighth Congress

of the

United States of America

AT THE FIRST SESSION

Begun and held at the City of Washington on Tuesday,

the seventh day of January, two thousand and three

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 programs under those Acts, and for

other purposes.

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 SelfReliance 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
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‘‘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
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‘‘(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’’.
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(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.

Speaker of the House of Representatives.

Vice President of the United States and

President of the Senate.