Operating after the earthquake is presenting challenges both inside our office and in the field.
In the office, the biggest problem is the office itself. I made the decision to close one side of the building. I’m no engineer, but it looks unsafe. What appears to be a load-bearing wall has a large horizontal crack, and the portion above the crack has shifted enough that it doesn’t sit squarely on the part beneath it.
And as unsafe as parts of the building look, the office staff hasn’t wanted to work inside. They will go inside to get something, or to check something on one of our computers, but the tellers, for example, are not will to spend the day working inside as they normally would, especially after Wednesday’s very noticeable aftershock. Even yesterday, we had two minor shakes in the middle of the day, so I can’t really blame them. For now, our tellers are working in the yard in front of the branch, and I am entering transactions, a day at a time, on the desktop in my office.
We’ve had some problems with clients as well. Though many are simply grateful that we are open at all, some are frustrated by one aspect of the service we provide. The exchange rate has dropped significantly. Before the quake, we were offering almost 42 gourds to the dollar. When we opened on Monday it was only 30 gourds, though it has risen to 35 since then. Dollars are flooding into the country, and everyone wants to change them into gourds. This has hurt those receiving remittances, which is one of the important services we provide. Friends and family abroad are sending people they know here dollars, doing what they can to help them in difficult times, but when it comes time to change them into gourds, they get much less than they had hoped for.
Normally, this wouldn’t be a serious problem for our office. We would simply pay out the remittances in dollars to anyone unsatisfied with the rate we can offer. But right now we just don’t have dollars. The only currency we can pay in is gourds. And no one else in Marigo is able to serve them yet, so if someone in Marigo wants to receive a remittance right now, they are stuck with our exchange rate. We’ve had arguments with customers, and I can understand their frustration. We just won’t be able to do anything for them until the commercial banks open, so that Fonkoze can get me the dollars I need to give our customers the choice they have a right to.
And the fact that I’m working in my office every day is only making work in the field, which is already difficult, even harder. We aren’t due to have a lot of reimbursements coming right now, but those that are due have not been coming in at anything like the rate we need. The earthquake has done a lot of harm in the southeast of Haiti. Our members have suffered in lots of ways, some of them financial. And one of the consequences of the fact that Fonkoze tries to be an understanding lender is that repaying Fonkoze is not always the first priority for borrowers who have difficult spending choices to make.
It’s a little frustrating.
We spent 10 months trying to straighten out a portfolio in Marigo that was already in bad shape before the hurricanes devastated this region in 2008. Those hurricanes just made things worse. Thanks to a lot of hard work by our staff in the field, our central office, and our partners around the world, we were able to help a large majority of our members put their businesses back together over the course of 2009.
We took losses at the end of that year, the vast majority of them because of those of our members who hadn’t yet been able to right their businesses entirely and clear their debt. After that loss, and a good first week of January 2010, we had whittled the delinquency rate for Marigo to 6.5%. Too high. More than twice the traditional number for solidarity-group microfinance. But very much an indication that we were moving in the right direction.
But in the week after the earthquake our repayment rate was only 23%. We collected lots of information – about loss of life, loss of merchandise, loss of homes – but haven’t been able to collect much in the way of loan repayments. Already our delinquency rate has jumped to 10%.
It’s easy to understand. And we know that we’ve come back from big problems before. We have to be optimistic.
And, what’s more: we have good reason to be optimistic. It’s not a matter of the blind hope that springs eternal, nor of our preference for hope over despair. Real progress is already visible everywhere around us. The road from Port au Prince to Jacmel is already open to all but large trucks. The “free market “ – in this case the smuggling trade – has already shifted the Marigo supply chain for many commodities from trucks that pass from Port au Prince to Jacmel to Marigo to boats that come to Marigo from Anse à Pitre. Our liquidity has been holding up so far. Fonkoze’s main office and Port au Prince branch are up and running. And last night Marigo even had electricity for the first time since the quake.
So things are moving forward, if slowly. And we therefore conclude, reasonably I think, that we will be able to move forward as well.