IIB
107TH CONGRESS
2D SESSION
H. R. 4073
IN THE SENATE OF THE UNITED STATES
JUNE 5, 2002
Received; read twice and referred to the Committee on Foreign Relations
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.
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Be it enacted by the Senate and House of Representa-
tives 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 ‘‘microentre-
preneurs’’ and inserting ‘‘microenterprise house-
holds’’;
(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 encourage the United States Agency for
International Development to develop, assess, and
implement effective outreach methods and tools to
ensure that all microenterprise assistance authorized
under this title, and the amendments made by this
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title, is used to assist the greatest absolute number
of economically viable clients among the very poor,
and that at least 50 percent of all microenterprise
assistance authorized under this title, and the
amendments made under this title, is used in sup-
port of programs or lines of service that target the
very poor.’’.
(b) DEFINITIONS.—Section 104 of such Act is
amended—
(1) in paragraph (2), by striking ‘‘for micro-
entrepreneurs’’ and inserting ‘‘to microentrepreneurs
and their households’’; and
(2) by adding at the end the following:
‘‘(5) VERY POOR; POOREST PEOPLE IN DEVEL-
OPING
COUNTRIES.—The terms ‘very poor’ and
‘poorest people in developing countries’ mean those
persons living either in the bottom 50 percent below
the poverty line as established by the national gov-
ernment of the country or on less than the equiva-
lent of $1 per day.’’.
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SEC. 2. AMENDMENTS TO THE MICRO- AND SMALL ENTER-
PRISE 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 microenter-
prises’’.
(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 as-
sistance to increase the availability of financial services to
microenterprise households lacking full access to credit,
including through—
‘‘(1) loans and guarantees to microfinance insti-
tutions for the purpose of expanding the availability
of savings and credit to poor and low-income house-
holds;
‘‘(2) training programs for microfinance institu-
tions in order to enable them to better meet the fi-
nancial services needs of their clients; and
‘‘(3) training programs for clients in order to
enable them to make better use of credit, increase
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their financial literacy, and to better manage their
enterprises.’’.
(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 enter-
prises’’ and inserting ‘‘microenterprise house-
holds’’; and
(2) in paragraphs (1) and (2), by striking
‘‘credit’’ each place it appears and inserting ‘‘finan-
cial 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:
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‘‘SEC. 108. MICROENTERPRISE DEVELOPMENT CREDITS.’’.
SEC. 3. AMENDMENTS TO THE MICROENTERPRISE DEVEL-
OPMENT 
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 de-
clares that—
‘‘(1) access to financial services and the devel-
opment of microenterprise are vital factors in the
stable growth of developing countries and in the de-
velopment 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 serv-
ices and assist the development of microenterprise in
developing countries;
‘‘(3) access to financial services and the devel-
opment of microenterprises can be supported by pro-
grams providing credit, savings, training, technical
assistance, business development services, and other
financial and non-financial services; and
‘‘(4) given the relatively high percentage of pop-
ulations living in rural areas of developing countries,
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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) in the first sentence of the matter pre-
ceding subparagraph (A), by striking ‘‘targeted
to very poor entrepreneurs’’ and all that follows
and inserting ‘‘used in support of programs or
lines of service under which 50 percent or more
of the incoming or prospective clients are ini-
tially very poor.’’; and
(B) in subparagraph (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 ‘‘micro-
finance’’ and inserting ‘‘microenterprise’’.
(c) MONITORING SYSTEM.—Section 131(c) of such
Act (22 U.S.C. 2152a(c)) is amended by striking para-
graph (4) and inserting the following:
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‘‘(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 credits, loans, and assist-
ance.’’
(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 fol-
lowing:
‘‘(d) DEVELOPMENT AND CERTIFICATION OF POV-
ERTY MEASUREMENT METHODS; APPLICATION OF METH-
ODS.—
‘‘(1) DEVELOPMENT AND CERTIFICATION.—(A)
The Administrator of the United States Agency for
International Development, in consultation with ap-
propriate microfinance institutions, microenterprise
institutions, and other appropriate entities shall de-
velop no fewer than two low-cost methods for meas-
uring the poverty levels of the current or prospective
clients of microenterprise organizations for purposes
of assistance under this section. In developing such
methods, the Administrator shall give consideration
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to methods already in use by practitioner institu-
tions.
‘‘(B) The Administrator shall field-test the
methods developed under this paragraph, and as
part of the testing, institutions and programs may
use these methods on a voluntary basis to dem-
onstrate their ability to reach the very poor.
‘‘(C) Not later than October 1, 2004, the Ad-
ministrator shall, from among the low-cost poverty
measurement methods developed under this para-
graph, certify no fewer than two of such methods as
approved methods for measuring the poverty levels
of the current or prospective clients of microenter-
prise organizations for purposes of assistance under
this section.
‘‘(2) APPLICATION.—Beginning on and after
October 1, 2004, assistance furnished under this
section to a program or to a line of service within
an institution shall qualify, in whole or in part, as
targeted assistance to the very poor if one or more
of the measurement methods approved under para-
graph (1), or one or more of the measurement meth-
ods approved in accordance with paragraph (1) after
October 1, 2004, verifies that at least 50 percent of
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the incoming or prospective clients of the program
or line of service are initially among the very poor.’’.
(e) LEVEL OF ASSISTANCE.—Section 131(e) of such
Act, as redesignated by subsection (d), is amended by in-
serting ‘‘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 re-
designated by subsection (d), is amended by adding at the
end the following:
‘‘(5) VERY POOR; POOREST PEOPLE IN DEVEL-
OPING
COUNTRIES.—The terms ‘very poor’ and
‘poorest people in developing countries’ mean those
persons living either in the bottom 50 percent below
the poverty line as established by the national gov-
ernment of the country or on less than the equiva-
lent of $1 per day.’’.
SEC. 4. REPORT TO CONGRESS.
Not later than July 1, 2004, the Administrator of
the United States Agency for International Development
shall submit to Congress a report that contains—
(1) a description of the interim poverty meas-
urement methods developed and implemented pursu-
ant to section 131(d)(1) of the Foreign Assistance
Act of 1961, as added by section 3(d);
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(2) an analysis of the results of the application
of such interim poverty measurement methods to
sustainable poverty-focused programs under such
section; and
(3) a description of the proposed final poverty
measurement methods to be implemented beginning
on October 1, 2004, in accordance with section
131(d)(2) of such Act, as added by section 3(d).
Passed the House of Representatives June 4, 2002.
Attest:
JEFF TRANDAHL,
Clerk.