Mi­cro fi­nanc­ing the poor in Haiti

Mi­cro­fi­nanc­ing is ef­fec­tive in many com­mu­ni­ties, but what about those who are too poor to get started? Fonkoze is Haiti’s an­swer. Founded in 1994, it now has branches in all parts of Haiti, and sup­ports women like Ytelet to get out of ex­treme poverty and

Living Now - - Contents - by Steve Wer­lin

Haiti's Fonkoze helps those who are too poor to af­ford mi­cro­fi­nanc­ing.

Founded by Fa­ther Joseph Philippe and a net­work of com­mu­nity ac­tivists in 1994, Fonkoze is now Haiti’s largest mi­cro­fi­nance or­gan­i­sa­tion. Fa­ther Philippe and his col­leagues had come to be­lieve that democ­racy in Haiti would de­pend on de­vel­op­ing a more in­clu­sive econ­omy, so they es­tab­lished an in­sti­tu­tion that could serve as some­thing like a bank for Haiti’s most ex­cluded; its ru­ral poor. Fonkoze be­gan to of­fer small loans and a way to save, and even­tu­ally spread across the coun­try. It now has 45 branches in all parts of Haiti that serve over 60,000 bor­row­ers and hold over 200,000 sav­ings ac­counts.

Ytelet is one such bor­rower.


When Ytelet joined Fonkoze’s CLM pro­gram in Jan­uary 2011, she was strug­gling just to feed her chil­dren and her­self. She lived by farm­ing, but didn’t own her own land, so she could never grow enough to get by.

CLM stands for Che­men Lavi Miyò, Haitian Cre­ole for “The Path­way to a Bet­ter Life.” It is a pro­gram that pro­vides the com­pre­hen­sive sup­port that a per­son in Ytelet’s po­si­tion needs to trans­form their life. Fonkoze es­tab­lished the pro­gram when it learned that there are fam­i­lies too poor for the usual mi­cro­fi­nance sys­tem.

CLM is an ex­am­ple of the ‘grad­u­a­tion ap­proach’; a poverty-elim­i­na­tion strat­egy draw­ing in­creas­ing at­ten­tion. De­vel­oped by BRAC in Bangladesh, the ap­proach is now be­ing used in dozens of coun­tries. Grad­u­a­tion pro­grams have been stud­ied ex­ten­sively, and proven ef­fec­tive. They em­power women like Ytelet to break free from the poverty traps that hold sway over their lives, by un­lock­ing en­tre­pre­neur­ial tal­ents that can pave their road to suc­cess. This is achieved by pro­vid­ing sup­port in three key ar­eas. 1HEALTH.

Many poor fam­i­lies were driven into ex­treme poverty by sick­ness or death. When Ytelet joined the pro­gram, her health was a bar­rier. Poor nu­tri­tion left her vul­ner­a­ble to even mi­nor fevers, and un­safe drink­ing wa­ter caused her fre­quent stom­ach and in­testi­nal prob­lems. Even­tu­ally a fever con­fined Ytelet to bed. The near­est clinic was a long hike from her home and to get there, she needed to be car­ried in a stretcher. Her fam­ily went to a nearby tra­di­tional healer, who told them that Ytelet was doomed, so they de­cided that the hike wasn’t worth the trou­ble. The CLM pro­gram as­signs each fam­ily a case man­ager. Ytelet’s case man­ager en­listed neigh­bours to help him carry her to the hos­pi­tal, and made sure that she was al­lo­cated a bed upon ar­rival. Less than a week later, Ytelet’s health had im­proved to the point where she was, able to hike back home.

Few of the CLM pro­gram’s health in­ter­ven­tions are as dra­matic as Ytelet’s, be­cause its main fo­cus is pre­ven­tion. For in­stance, par­tic­i­pants re­ceive wa­ter fil­ters and la­trines (few have ac­cess to a la­trine be­fore they join). They also re­ceive help to re­pair their home. All par­tic­i­pants grad­u­ate from the pro­gram with a tin roof on their home, which pro­tects them from trop­i­cal down­pours. In ad­di­tion, they re­ceive weekly train­ing in crit­i­cal health top­ics, in­clud­ing vi­ta­min A, hy­giene, nu­tri­tion, and fam­ily plan­ning.

Fi­nally, Fonkoze’s close col­lab­o­ra­tion with Part­ners in Health (PIH) en­sures that all pro­gram par­tic­i­pants re­ceive free health­care at Part­ners in Health fa­cil­i­ties. For Ytelet the care that PIH pro­vided saved her life. 2ASSETS.

We say that teach­ing some­one to fish feeds them for a life­time, but a woman who knows how to fish still needs tools. CLM teaches women to man­age small busi­nesses,

and pro­vides them with the as­sets to get started. Most choose live­stock, but they can choose mer­chan­dise to start a small com­merce as well.

Be­fore the CLM pro­gram, Ytelet had been a farmer. But without means of her own, she was only able to work as a share­crop­per, plant­ing seeds she had bought on credit. Her debt to the landowner and the 100% in­ter­est she was pay­ing for seeds en­sured she was never able to get ahead.

The CLM pro­gram gave her the means to rent land out­right and to buy seeds with cash up front. Soon her farm­ing be­came prof­itable. For the last har­vest be­fore she joined, Ytelet had planted four cans of bor­rowed beans. Her har­vest had been rea­son­able, at about thirty cans. How­ever, fifteen cans went to the landowner and eight to the man who lent her the beans.

Six months into her mem­ber­ship in CLM, Ytelet planted 12 cans of beans, which she pur­chased with cash up front on a plot she rented for 1000 gourds. She put away 40 cans at har­vest, even af­ter us­ing some to pay her field hands.

Ytelet also re­ceived live­stock, en­abling her to build wealth with which to in­vest. She in­creased the scope of her farm­ing and added a prof­itable busi­ness buy­ing and sell­ing beans. She also sold her goats’ young to buy a horse, which en­abled her to carry more mer­chan­dise to mar­ket.


De­spite ev­ery­thing that CLM could of­fer Ytelet, she would have had a hard time mov­ing for­ward on her own. Her case man­ager was a crit­i­cal part of her suc­cess. Case man­agers meet with mem­bers of the pro­gram once a week for 18 months. For Ytelet, her case man­ager’s im­por­tance was es­pe­cially clear. He brought her to the hos­pi­tal when she was on the verge of death. He showed her how she could trans­form her farm­ing into a prof­itable busi­ness.

Ac­com­pa­ni­ment is im­por­tant for many of the women who pass through the pro­gram. Train­ing can show them the path to a bet­ter life, and as­sets can make walk­ing the path fea­si­ble. But set­backs are the rule, rather than the ex­cep­tion, for the poor. Without ad­e­quate emo­tional and strate­gic sup­port, a sin­gle set­back could cause a woman to fail. Case man­agers also help par­tic­i­pants learn the habit of plan­ning and look­ing ahead, which is crit­i­cal if they are to change their lives.


Ytelet grad­u­ated from the CLM pro­gram in 2012, and four years later her progress con­tin­ues. She moved from Zaboka, where she grew up, to Re­galis, a mar­ket town across the moun­tains with bet­ter schools for her chil­dren and bet­ter vend­ing out­lets for the beans she sells. She hikes back to Zaboka reg­u­larly, be­cause she still farms there, but her own har­vests are now only one part of her grow­ing busi­ness.

Not ev­ery CLM grad­u­ate is as suc­cess­ful as Ytelet, but over 95% who fin­ish the pro­gram re­quire no fur­ther sub­si­dies. With no jobs in the Haitian coun­try­side, es­pe­cially for women suf­fer­ing ex­treme poverty, self­em­ploy­ment is their only op­tion. They are en­trepreneurs by ne­ces­sity.

Ytelet makes de­ci­sions ev­ery day, as she moves her re­sources be­tween her fields, her live­stock, and her bean busi­ness. She strate­gises con­stantly about ways to max­imise her prof­its and in­crease her net worth. She is surely an en­tre­pre­neur, and an ad­mirable and ef­fec­tive one. ■

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