H. R. 3818
One Hundred Eighth Congress
of the
United States of America
AT THE SECOND SESSION
Begun and held at the City of Washington on Tuesday,
the twentieth day of January, two thousand and four
An Act
To amend the Foreign Assistance Act of 1961 to improve the results and account-
ability of microenterprise development assistance programs, 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. 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 microenter-
prise 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 assist-
ance 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.
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(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 devel-
oping 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 develop-
ment 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 develop-
ment 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 devel-
oping 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 popu-
lations disenfranchised due to race or ethnicity in countries
where a strong relationship between poverty and race or eth-
nicity has been demonstrated, such as countries in Latin
America.
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‘‘SEC. 252. AUTHORIZATION; IMPLEMENTATION; TARGETED ASSIST-
ANCE.
‘‘(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 assist-
ance, 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 sec-
tion, the Administrator shall—
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‘‘(i) take into consideration the percentage of funds
a provider of assistance intends to expend on adminis-
trative costs;
‘‘(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 sustain-
able 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 assist-
ance 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 pov-
erty-focused programs under subsection (a), 50 percent of all micro-
enterprise 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 practi-
tioner institutions that—
‘‘(A) provide credit and other financial services to cli-
ents 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 develop-
ment 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 sub-
section (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.
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‘‘(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 rec-
ommendations 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 appro-
priate 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 prospec-
tive 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 measure-
ment 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—
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(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 sub-
section (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).
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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 congres-
sional 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, con-
tracts, 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 assess-
ment 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 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 micro-
finance development assistance work closely with nongovern-
mental 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 relation-
ship between poverty and race or ethnicity has been dem-
onstrated.
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‘‘(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 sec-
tion 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 micro-
enterprises 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 ‘microenter-
prise institution’ means a not-for-profit entity that provides
services, including microfinance, training, or business develop-
ment 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 net-
work’ means an affiliated group of practitioner institutions
that provides services to its members, including financing, tech-
nical assistance, and accreditation, for the purpose of promoting
the financial sustainability and societal impact of microenter-
prise assistance.
‘‘(10) OFFICE.—The term ‘office’ means the office of micro-
enterprise development established under section 252(b)(1).
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‘‘(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 develop-
ment services, for microfinance and microenterprise clients,
or provides assistance to microenterprise institutions in foreign
countries.
‘‘(12) PRIVATE VOLUNTARY ORGANIZATION.—The term ‘pri-
vate 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
INSTITU-
TION.—The term ‘United States-supported microfinance institu-
tion’ 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 adminis-
trative costs;
(4) should not use recipients of microenterprise develop-
ment assistance under such title to carry out critical manage-
ment functions of the Agency, including functions such as
strategy development or overall management of programs in
a country; and
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(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 docu-
ment 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.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.