Credit After Hurricanes

Sunday the 19th was election day. Haitians voted on replacements for the senators whose terms ended back in January. The day passed with hardly a hitch, except in one part of Haiti. Unless non-participation counts as a hitch. Few Haitians chose to vote.

As I spoke yesterday with Manita, the election was on her mind. “I wish I could have voted for Fonkoze,” she said. “They’re the ones who actually help me.” She went on to explain how Fonkoze’s Hurricane Credit had enabled her to keep her business alive.

Manita belongs to a credit center in Bwanèf. It’s at the end of a 45-minute hike along a winding narrow path. You go up and a couple of slopes, cross two streams, and pass a lovely waterfall that empties into a series of rocky pools. It’s a tough walk. And just getting to the mouth of that path takes another half-hour on a fast motorcycle.

Manita sells fried snacks at a small stand right where the path branches off from the main road. There are two primary schools nearby, and when one or the other is letting children go, her stand swarms with little customers. They seem to like her work.

She had borrowed 6000 gourds from Fonkoze last June. That’s about $150. It was a six-month loan, her second with Fonkoze. She made her first two payments, but in August and September the storms were shutting down the local economy. By October, she was having real trouble. She was left with a balance of about 2200 gourds, and little sense how she would repay it.

Fonkoze took that balance and re-lent it to her without interest. We added a new loan, for another 6000 gourds, that was also interest-free. Her total debt was thus about 8200 gourds, more than she had ever managed in a single loan to that point, but it was all interest-free and she’d have twelve months to pay it back.

She points to that loan as the crucial assistance that enabled her to get her business back on its feet. Manita is starting to flourish again. She makes her payment two at a time, because she’s determined to repay her loan in six months and apply for a new and larger one.

But many of the borrowers in the area are having a much harder time. The area around Marigo is one of those hardest hit by the hurricanes that tore through Haiti last year. Floods and landslides destroyed whole communities. Fonkoze’s borrowers were badly damaged. They lost their businesses as their merchandise was swept away.

Those who did not lose their merchandise immediately continued to be at great risk of losing it in the aftermath. Both the main route between Marigo and Jakmèl and the mountain route from Segen to Pétion-Ville and Port au Prince became treacherous. The mountain route in particular, which winds through a sparsely populated national forest, was closely watched by robbers, preying on the market women depend upon it.

But even women who did not lose their merchandise, could lose their business. Their neighbors’ suddenly increased poverty left them without a client base. Sales plummeted. Many borrowers who made a first repayment were left struggling to make a second and a third as their hoped-for income failed to materialize. Those who started repaying best could be at greatest risk if repayments prevented them from leaving sufficient capital in their business to ensure its on-going operation.

And there’s another aspect as well. Repaying loans is never easy for Fonkoze borrowers. They are poor. They lack the safety nets that many of us in the States and elsewhere are accustomed to. Their livelihoods are fragile. They are rarely more than a prolonged sickness or a death in the family or an accident of whatever sort away from losing what they have.

I wrote recently about a man I called Paul, and his situation illustrates the point. (See: DealingwithMen.) Many successful Fonkoze borrowers count on their businesses to a substantial degree, but not for everything. They farm. They raise animals. They might do odd jobs. Or they may have husbands or partners that do something to earn extra income.

But the hurricanes wiped out crops and swept away livestock. Families that had been able to solve occasional business problems by selling a goat or a sack of sweet potatoes, had more and more serious problems in their businesses and few or no resources to fall back upon. All the little problems they have had were leading them straight to delinquency. It’s a tough situation.

We can help them by re-writing their loan contracts, giving them more time to repay, but so far not one of the women I have suggested that to has accepted. They do want to see their progress toward their next loan slowed, and they remain optimistic that something will soon go right for them and enable them to get caught up.

The wisdom of such optimism is hard to see. Women who are carrying growing delinquencies regularly point out that “nou pat konn bay pwoblèm.” That means “we haven’t caused problems in the past.” It’s their way of saying that they always dependably repaid their loans. They recognize that something has changed, but not clearly enough to draw what appears to me to be the most reasonable conclusion, that they need to restructure their debt. And I am reluctant to impose a solution that the women do not want. For now, I can only keep talking to them and make sure they know we will be ready to address their problems whenever they themselves are.