APRIL 2, 2004 
Reported with an amendment, committed to the Committee of the Whole 
House on the State of the Union, and ordered to be printed 
[Strike out all after the enacting clause and insert the part printed in italic] 
[For text of introduced bill, see copy of bill as introduced on February 24, 2004] 
A BILL 
To amend the Foreign Assistance Act of 1961 to improve 
the results and accountability of microenterprise develop-
ment assistance programs, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives 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 micro-
enterprise 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 microenter-
prise assistance program under those Acts, 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 au-
thorized 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 re-
quired 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 devel-
opment 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 pov-
erty, 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 Inter-
national Development have found that micro-
enterprise activities generally serve the poor clus-
tered around the poverty line, few loans appear 
to be reaching the very poor. 
(C) Microenterprise development assistance 
programs of the United States Agency for Inter-
national Development have encouraged women’s 
participation in microfinance projects and, ac-
cording to data of the Agency, women have com-
prised two-thirds or more of the micro-loan cli-
ents in Agency-funded microenterprise projects 
since 1997. 
(5)(A) The Comptroller General’s report rec-
ommends 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 re-
view and reconsider the methodologies used for the
collection, analysis, and reporting of data on annual 
spending targets, outreach to the very poor, sustain-
ability of microfinance institutions, and the contribu-
tion of Agency’s funding to the institutions it sup-
ports. 
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 develop-
ment 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 de-
veloping countries. 
‘‘(3) Access to financial services and the develop-
ment of microenterprises can be supported by pro-
grams providing credit, savings, training, technical
assistance, business development services, and other fi-
nancial services. 
‘‘(4) Given the relatively high percentage of pop-
ulations 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 success-
ful 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 traf-
ficking and the need for assistance for women who be-
come victims of severe forms of trafficking, as pro-
vided for in section 106(a)(1) of the Trafficking Vic-
tims 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 eth-
nicity in countries where a strong relationship be-
tween poverty and race or ethnicity has been dem-
onstrated, 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 devel-
oping countries to increase the availability of credit, sav-
ings, and other services to microenterprises lacking full ac-
cess to capital, training, technical assistance, and business 
development services, through— 
‘‘(1) grants to microfinance institutions for the 
purpose of expanding the availability of credit, sav-
ings, 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 insti-
tutions 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 institu-
tions that serve the poor and very poor. 
‘‘(b) IMPLEMENTATION.— 
‘‘(1) OFFICE
OF
MICROENTERPRISE
DEVELOP-
MENT.— 
‘‘(A) ESTABLISHMENT.—There is estab-
lished within the Agency an Office of Microenter-
prise Development, which shall be headed by a 
Director who shall be appointed by the Adminis-
trator 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 ELIGI-
BLE
ORGANIZATIONS.—Assistance under subsection 
(a) shall be provided through grants executed, ap-
proved, or reviewed by the Office to eligible imple-
menting 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 develop-
ment components of strategic plans of missions, 
bureaus, and offices of the Agency. 
‘‘(c) TARGETED ASSISTANCE.—In carrying out sus-
tainable 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 pro-
grams 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 Ad-
ministrator should increase the use of central mechanisms 
through microenterprise, microfinance, and practitioner in-
stitutions in the implementation of this title. 
‘‘SEC. 253. MONITORING SYSTEM. 
‘‘(a) ESTABLISHMENT.—In order to maximize the sus-
tainable development impact of assistance authorized under 
section 252(a), the Administrator of the Agency, acting 
through the Director of the Office, shall establish a moni-
toring 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 perform-
ance goals for the assistance and expresses such goals 
in an objective and quantifiable form, to the extent 
feasible. 
‘‘(2) The monitoring system establishes perform-
ance indicators to be used in measuring or assessing 
the achievement of the performance goals described in 
paragraph (1) and the objectives of the assistance au-
thorized 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 as-
sistance, particularly the impact of such assistance on 
the very poor, particularly poor women. 
‘‘(4) The monitoring system adopts the wide-
spread 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 POV-
ERTY MEASUREMENT METHODS; APPLICA-
TION OF METHODS. 
‘‘(a) DEVELOPMENT AND CERTIFICATION.—
‘‘(1) IN
GENERAL.—The Administrator of the 
Agency, in consultation with microenterprise institu-
tions and other appropriate organizations, shall de-
velop no fewer than two low-cost methods for eligible 
implementing partner organizations to use to assess 
the poverty levels of their current or prospective cli-
ents. The Administrator shall develop poverty indica-
tors 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 two such meth-
ods as approved methods for measuring the poverty 
levels of current or prospective clients of microenter-
prise institutions for purposes of assistance under sec-
tion 252. 
‘‘(b) APPLICATION.—The Administrator shall require 
that, with reasonable exceptions, all eligible implementing 
partner organizations applying for microenterprise assist-
ance under this title use one of the certified methods, begin-
ning not later than October 1, 2005, to determine and re-
port the poverty levels of current or prospective clients. 
‘‘SEC. 255. AUTHORIZATION OF APPROPRIATIONS; ADDI-
TIONAL 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 appro-
priated 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 reallo-
cated to field missions of the Agency in furtherance 
of the purposes of this title; 
‘‘(C) are authorized to remain available until ex-
pended; and 
‘‘(D) are in addition to amounts otherwise avail-
able 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 informa-
tion 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 As-
sistance Act of 1961. 
(b) REDESIGNATION.—Title VI of chapter 2 of part I 
of the Foreign Assistance Act of 1961 is amended by redesig-
nating 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 amend-
ed—
(1) by inserting after the title heading the fol-
lowing: 
‘‘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 admin-
istering this part’’ and inserting ‘‘Administrator 
of the Agency’’; and 
(B) in subsection (f)(1)— 
(i) by striking ‘‘section 131’’ and in-
serting ‘‘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 As-
sistance 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 redesig-
nating 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 amend-
ed— 
(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 add-
ing 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 com-
mittees 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 fol-
lowing: 
‘‘(1) The number of grants provided under sec-
tion 252, with a listing of— 
‘‘(A) the amount of each grant; 
‘‘(B) the name of each implementing part-
ner organization; and 
‘‘(C) a listing of the number of countries re-
ceiving assistance authorized by sections 252. 
‘‘(2) The results of the monitoring system re-
quired under section 253. 
‘‘(3) The process of developing and applying pov-
erty 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 as-
sistance under section 256 and the amount of such as-
sistance. 
‘‘(8) An estimate of the percentage of bene-
ficiaries 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 in-
volved in prostitution. 
‘‘(9) Any additional information relating to the 
provision of assistance authorized by this title, in-
cluding the use of the poverty measurement tools re-
quired 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 bene-
ficiaries 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 
‘Adminis-
trator’ means the Administrator of the Agency. 
‘‘(2) AGENCY.—The term ‘Agency’ means the 
United States Agency for International Development. 
‘‘(3) APPROPRIATE
CONGRESSIONAL
COMMIT-
TEES.—The term ‘appropriate congressional commit-
tees’ 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.
provides, or works to expand, the availability of cred-
it, 
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 fi-
nancial sustainability and societal impact of micro-
enterprise assistance. 
‘‘(10) OFFICE.—The term ‘Office’ means the Of-
fice 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, includ-
ing microfinance, training, or business development 
services, for microentreprise clients, or provides assist-
ance to microenterprise institutions in foreign coun-
tries. 
‘‘(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 humani-
tarian 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
MICRO-
FINANCE INSTITUTION.—The term ‘United States-sup-
ported 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 gov-
ernment of the country in which those individ-
uals 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 sub-
section (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.
Union Calendar No. 262 
108TH CONGRESS 
2D SESSION 
H. R. 3818 
[Report No. 108–459] 
A BILL 
To amend the Foreign Assistance Act of 1961 to 
improve the results and accountability of micro-
enterprise development assistance programs, and 
for other purposes. 
APRIL 2, 2004 
Reported with an amendment, committed to the Com-
mittee of the Whole House on the State of the Union, 
and ordered to be printed