The Microenterprise Results and Accountability Act of 2004 (P.L. 108-484) was authored by U.S. Rep. Chris Smith (R-NJ) and became law in 2004. The law reformed the loan structure within the United States Agency for International Development (USAID), ensuring that American dollars aimed at helping those most in need would be targeted directly to organizations most able to directly help them. The law created a microenterprise office within USAID to improve oversight and establish new methods of accountability – including an annual report to Congress. The bill also required a new monitoring system to ensure that performance goals are met.
The
Microenterprise Results and Accountability Act of 2004 (P.L. 108-484) was authored by U.S. Rep. Chris Smith (R-NJ) and became law in 2004. The law reformed the loan structure within the United States Agency for International Development (USAID), ensuring that American dollars aimed at helping those most in need would be targeted directly to organizations most able to directly help them. The law created a microenterprise office within USAID to improve oversight and establish new methods of accountability – including an annual report to Congress. The bill also required a new monitoring system to ensure that performance goals are met.
The Microcredit foreign aid program reduces poverty by providing small business loans to individuals (mostly women) in developing countries. Evidence now shows that access to financial services like Microcredit enables poor people to increase their household income and build assets thus reducing their vulnerability to crises that would otherwise be devastating. Studies also show that microfinance contributes to improved nutrition, higher immunization rates and increased school enrollment.
Over 2 million recipients currently benefit from Microcredit small business loans –most of which are for just a few hundred dollars. The program is a complement to President Bush’s call for more effective foreign aid (through the Millennium Challenge Account) evidenced by a 97 percent loan repayment rate.
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: Implementing the Microenterprise Results and Accountability Act of 2004
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
Lawrence Yanovitch, Director of Policy and Technical Assistance, The Foundation for International Community Assistance
