SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Microenterprise Re-
sults 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 Assist-
ance Act of 1961 to increase assistance 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 Develop-
ment’s microfinance program, prepared by the Con-
sultative 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 Agen-
cy 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 assist-
ance 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.
(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 re-
porting 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 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 services.
‘‘(4) Given the relatively high percentage of
populations living in rural areas of developing coun-
tries, 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 suc-
cessful and should continue to empower vulnerable
women in the developing 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 iden-
tify and assist victims of trafficking as provided for
in section 106(a)(1) of the Trafficking Victims Pro-
tection 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 vio-
lence.
‘‘(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 ethnicity in countries where a strong rela-
tionship between poverty and race or ethnicity has
been demonstrated, such as countries in Latin
America.
‘‘SEC. 252. AUTHORIZATION; IMPLEMENTATION; TARGETED
ASSISTANCE.
‘‘(a) AUTHORIZATION.—The President is authorized
to provide assistance on a non-reimbursable basis for pro-
grams in developing countries to increase the availability
of credit, savings, and other services to microfinance and
microenterprise clients lacking full access to capital, train-
ing, technical assistance, and business development serv-
ices, 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 assistance, and business development serv-
ices for microenterprises to enable them to make
better use of credit, to better manage their enter-
prises, to conduct market analysis and product de-
velopment 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 in-
stitutions that serve the poor and very poor.
‘‘(b) IMPLEMENTATION.—
‘‘(1) OFFICE OF MICROENTERPRISE DEVELOP-
MENT.—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 ex-
pertise 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 part-
ner organizations that best meet the require-
ments of subparagraph (C).
‘‘(B) USE OF CENTRAL FUNDING MECHA-
NISMS.—
‘‘(i) PROGRAM.—In order to ensure
that assistance under this title is distrib-
uted effectively and efficiently, the office
shall also seek to implement a program of
central funding under which assistance is
administered directly by the office, includ-
ing 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 fis-
cal year, not less than $25,000,000 should
be made available to carry out clause (i).
‘‘(C) EFFICIENCY
AND
COST-EFFECTIVE-
NESS.—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 section, the Administrator shall—
‘‘(i) take into consideration the per-
centage of funds a provider of assistance
intends to expend on administrative costs;
‘‘(ii) take all appropriate steps to en-
sure 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 estab-
lishing sustainable microfinance and micro-
enterprise 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 ad-
ministrative costs.
‘‘(3) APPROVAL OF STRATEGIC PLANS.—With
respect to assistance 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 mis-
sions to help the missions prepare such components.
‘‘(c) TARGETED ASSISTANCE.—In carrying out sus-
tainable poverty-focused programs under subsection (a),
50 percent of all microenterprise resources shall be tar-
geted to clients who are very poor. Specifically, until Sep-
tember 30, 2006, 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 Amer-
ica 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.
‘‘SEC. 253. MONITORING SYSTEM.
‘‘(a) IN GENERAL.—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 strengthen
its monitoring system to meet the requirements of sub-
section (b).
‘‘(b) REQUIREMENTS.—The requirements referred to
in subsection (a) are the following:
‘‘(1) The monitoring system shall include per-
formance goals for the assistance and expresses such
goals in an objective and quantifiable form, to the
extent feasible.
‘‘(2) The monitoring system shall include per-
formance indicators to be used in measuring or as-
sessing the achievement of the performance goals de-
scribed in paragraph (1) and the objectives of the
assistance authorized 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
assistance, 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 assess-
ment tools to successfully identify the very poor and
ensure that they receive adequate access to micro-
enterprise 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 imple-
menting 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 pro-
grams 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 measurement methods developed under
paragraph (1), certify no fewer than two such meth-
ods as approved methods for measuring the poverty
levels of current, incoming, or prospective clients of
microenterprise institutions for purposes of assist-
ance 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 cli-
ents.
‘‘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 pre-
ceding sentence is provided in accordance with such sen-
tence, 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 applica-
ble, 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 Assist-
ance 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 chap-
ter 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 chap-
ter 2 of part I of the Foreign Assistance Act of 1961 is
amended—
(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 sub-
section (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 ‘‘$1,500,000 for each
of fiscal years 2001 through 2004’’ and in-
serting ‘‘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 Assist-
ance 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 chap-
ter 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 chap-
ter 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 sub-
section (b))—
(A) in subsection (b)(3), by striking ‘‘2001
and 2002’’ and inserting ‘‘2005 through 2009’’;
(B) in the matter preceding subparagraph
(A) of subsection (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 nec-
essary’’; and
(C) by striking subsection (e).
SEC. 6. MISCELLANEOUS PROVISIONS.
Title VI of chapter 2 of part I of the Foreign Assist-
ance 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 congressional committees a re-
port that contains a detailed description of the implemen-
tation of this title for the previous fiscal year.
‘‘(b) CONTENTS.—The report shall contain the fol-
lowing:
‘‘(1) The number of grants, cooperative agree-
ments, contracts, contributions, or other form of as-
sistance 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, coopera-
tive 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 re-
quired under section 253.
‘‘(3) The process of developing and applying
poverty assessment procedures required under sec-
tion 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 as-
sistance under section 256 and the amount of such
assistance.
‘‘(8) Information on the efforts of the Agency
to ensure that recipients of United States micro-
enterprise and microfinance development assistance
work closely with nongovernmental organizations
and foreign governments to identify and assist vic-
tims or potential victims of severe forms of traf-
ficking in persons and women who are victims of or
susceptible to other forms of exploitation and vio-
lence.
‘‘(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.
‘‘(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 section shall be made available to the public on
the Internet website of the Agency.
‘‘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 Develop-
ment.
‘‘(3) APPROPRIATE
CONGRESSIONAL
COMMIT-
TEES.—The term ‘appropriate congressional com-
mittees’ means the Committee on International Re-
lations 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.
‘‘(5) DIRECTOR.—The term ‘Director’ means
the Director of the office.
‘‘(6) 
IMPLEMENTING
PARTNER
ORGANIZA-
TION.—The term ‘implementing partner organiza-
tion’ means an entity eligible to receive assistance
under this title which is—
‘‘(A) a United States or an indigenous pri-
vate voluntary organization;
‘‘(B) a United States or an indigenous
credit union;
‘‘(C) a United States or an indigenous co-
operative organization;
‘‘(D) an indigenous governmental or non-
governmental organization;
‘‘(E) a microenterprise institution;
‘‘(F) a microfinance institution; or
‘‘(G) a practitioner institution.
‘‘(7) MICROENTERPRISE
INSTITUTION.—The
term ‘microenterprise institution’ means a not-for-
profit entity that provides services, including micro-
finance, training, or business development services,
for microenterprise clients in foreign countries.
‘‘(8) MICROFINANCE INSTITUTION.—The term
‘microfinance institution’ means a not-for-profit enti-
ty or a regulated financial intermediary that directly
provides, or works to expand, the availability of
credit, savings, and other financial services to micro-
finance and microenterprise clients in foreign coun-
tries.
‘‘(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
financial 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 enti-
ty or a regulated financial intermediary, including a
microfinance network, that provides services, includ-
ing microfinance, training, or business development
services, for microfinance and microenterprise cli-
ents, or provides assistance to microenterprise insti-
tutions in foreign countries.
‘‘(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-
supported microfinance institution’ means a finan-
cial intermediary that has received funds made avail-
able under this part for fiscal year 1980 or any sub-
sequent 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 (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 micro-
enterprise development assistance provided under
such title is matched by recipients with an equal
amount of assistance from non-United States Gov-
ernment sources, including private donations, multi-
lateral funding, commercial and concessional bor-
rowing, savings, and program income;
(2) should include in the report required by sec-
tion 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 micro-
enterprise development assistance under such title;
(3) should ensure that recipients of microenter-
prise development assistance under such title do not
expend an unreasonably large percentage of such as-
sistance on administrative costs;
(4) should not use recipients of microenterprise
development assistance under such title to carry out
critical management functions of the Agency, includ-
ing functions such as strategy development or overall
management of programs in a country; and
(5) should consult with the appropriate congres-
sional committees with respect to the implementa-
tion 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 strik-
ing 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 insert-
ing ‘‘Not later’’.
SEC. 9. 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 chap-
ter 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.
Passed the House of Representatives November 20,
2004.
Attest:
Clerk.