Committee on International Relations
U.S. House of Representatives
Henry J. Hyde, Chairman

CONTACT: Sam Stratman, (202) 226-7875, September 19, 2005

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Microenterprise Results & Accountability Act of 2004
Rep. Chris Smith Schedules Tuesday Hearing
to Examine U.S. Microenterprise Policies and Outcomes
 

BACKGROUND:  Microcredit, a U.S. foreign aid program that provides small business loans to individuals (mostly women) in developing countries, is a powerful and effective tool to reduce poverty.  A mounting body of evidence shows that access to financial services enables poor people to increase their household incomes, build assets, and reduce their vulnerability to crises which otherwise could be financially and personally devastating.  Studies have also shown microfinance can lead to better nutrition, improved immunization rates, and higher rates of school enrollment.  The Microenterprise Results and Accountability Act of 2004 (P.L. 108-484) was authored by U.S. Rep. Chris Smith (R-NJ) and signed into law in 2004.  The law reforms the existing loan structure within the United States Agency for International Development (USAID) to ensure that U.S. funds aimed at helping the poorest of the poor are targeted directly to those organizations best able to help them. The law creates a microenterprise office within USAID to improve oversight and establish new methods of accountability including an annual report to Congress on specific funding decisions and information on grant recipients.  The bill also requires a new monitoring system to ensure that performance goals are met and that grant monies go to the poorest of the poor.  More than 2 million clients are currently benefiting from microcredit small business loans of a few hundred dollars or less.  It is estimated that 97 percent of microcredit loans are repaid.  The program complements the principles instituted by President Bush for more effective foreign aid through the Millennium Challenge Account.  Members will be seeking information and views from USAID and from the private sector on the cost effectiveness and efficiency of programs; requirements of the law to emphasize implementing partner organizations and leading microfinance networks; the role of microenterprise development in addressing HIV/AIDS and trafficking in persons; and USAID mechanisms to improve how U.S. taxpayer funds are allocated and spent. 

WHAT:                             Subcommittee Oversight Hearing:
                                          Implementing the Microenterprise Results and Accountability Act of 2004
                           
              Subcommittee on Africa, Global Human Rights and International Operations
                                         
U.S. Rep. Christopher H. Smith (R-NJ), Chairman

WHEN:                             2:00 p.m., Tuesday, September 20, 2005

WHERE:                           Room 2172 Rayburn House Office Building

WITNESSES:                   Panel I:
                                          James T. Smith
, Acting Assistant Administrator, U.S. Agency for International Development;
                                         Panel II:
                                          Jonathan Morduch, Ph.D.
, Associate Professor of Public Policy and Economics,
                                          Robert F. Wagner Graduate School of Public Service of New York University;
                                          Susy Cheston
, Senior Vice President, Opportunity International;
                                          Gary Plank
, President-Elect, World Council of Credit Unions; and
                                          Lawrence Yanovitch
, Director of Policy and Technical Assistance,
                                          The Foundation for International Community Assistance

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