Segen is a market town high in the mountains overlooking Marigo. It sits just below one of Haiti’s national forests, the Parc de la Visite, in the midst of rich farmland. Fonkoze Marigo has two credit centers in Segen. Moïse, a Marigo loan officer, and I were making our second visit to the weaker of the two.
Most of the members of this center have gotten behind in their repayments, some of them substantially. And few of them attend center meetings regularly. Fonkoze has generally found that these two issues are closely tied. Centers with good attendance will usually have good repayment records. Centers with poor attendance will generally have poor repayment records, at least they will eventually.
There were about ten people at today’s meeting. There should have been more than twice that many. Two of them were men, and that deserves some explanation.
Like most institutions with solidarity-group microcredit programs, Fonkoze offers its loans to women exclusively. There are at least three reasons for this. First, Fonkoze seeks to help Haitian families, and the people who take fundamental responsibility for seeing that children are fed and clothed are their mothers. Fathers contribute. In many families, they are the major breadwinners. But it is the mothers who deploy whatever resources are available in a household to care for their families.
Second, many Haitian women – like many women in other countries – are subject to all kinds of abuse because they lack access to independent sources of income. Too many are forced for economic reasons to stay with men who treat them badly. Fonkoze wants to do what it can to enable women to choose the partners as freely as possible.
Third, men don’t pay back loans. It’s a hard truth for a man to read or hear. Or to write, for that matter. But experience has been pretty consistent. Poor women overwhelmingly repay their loans. Men are much less dependable.
So these two men – I’ll call them Jean and Paul – shouldn’t have been at the center meeting. But their stories say a lot about the range of problems that righting the Marigo portfolio will require our team to overcome.
Jean is an older man. When we asked him why he was at the meeting, he said that he had come to represent his two daughters. “When you look at me,” he said, “you should see my two girls, not me.” The girls both have loans, but they live in Pétion-Ville, across the mountain from Segen. They are in school, he said, but have small businesses they run in the mornings. Under the circumstances, they cannot come to center meetings. They come to the center to sign for their loans, but then they send him to make repayments on their behalf. They are on their third or fourth loan, for 15,000 gourds, or about $375. And their repayment record has generally been good.
Until two weeks ago. Jean didn’t come to that regular reimbursement meeting. He thought, he told us, that the meeting was supposed to be a week after the day it was actually scheduled for. But today he had brought a full payment for each of his daughters, two weeks late.
When Moïse told him about the lateness penalty he would have to pay – about 10 gourds, or 25 cents, per day – he was supportive at first. Penalties were, he agreed, a good idea. Too many borrowers were taking their debt too lightly. They come to meetings with their money in their pocket, but then decide not to make a repayment because they’d rather keep the money in their business. He was eloquent.
That is, until Moïse made it clear to Jean that he really planned to collect the penalty that was due. Jean didn’t think he should pay a penalty. It was a mistake. He was misinformed about the repayment date. (The correct date was written in the contract in Jean’s family’s hands.) He didn’t know about the penalty policy. (He admitted that he knew the policy existed, but argued that it hadn’t been applied. Several women in the center answered that they had paid penalties in the center before.)
He said he wouldn’t pay at all if Moïse insisted on the penalty. (Moïse pointed out that, unfortunately, the penalties would just keep accumulating.) He asked me to intervene on his behalf, explaining the leading role he had always tried to play in the center. (Moïse and I told him that we were in total agreement about penalties.)
He said he didn’t have any more money with him. (Moïse said that he could bring it to a meeting of the neighboring center in two days. The additional penalty wouldn’t be too much.) But then he angrily pulled the money out of his pocket and paid. No too long after that, he left the meeting.
This won’t be the end of our problem with Jean because I also had to take a few minutes to make sure he understood that we would no longer accept the role he was playing on his daughters’ behalf. If they are to have Fonkoze loans, then they must come to Fonkoze meetings. They can’t send their father. They have to attend themselves.
He answered that they couldn’t. They could not miss school in Pétion-Ville just to come to their center. I suggested that they take their next loans from the branch in Port au Prince. It has credit centers in Pétion-Ville. He answered that that wouldn’t work either because they come home for vacations.
The reality probably is that his daughters have no businesses. The reality probably is Jean has a business that is built on taken Fonkoze loans, two at a time, in his daughters’ names.
Such deceptions are tempting because Fonkoze won’t make loans to men. It would be easy to pull it off in Marigo because loan officers have not routinely visited our members’ businesses here.
This is an important point. A couple of different factors are supposed to go into analyzing a member’s loan request. You consider their repayment record, their attendance at center meetings, and the size and nature of their business. This third factor is crucial. A woman who can comfortably repay an 8000-gourd loan may not have enough of a business to pay back a loan twice as large. By letting her increase her loan size without analyzing her business with her, you are almost ensuring her delinquency. Either she will buy more merchandise than she can sell and have money frozen as inventory, or she will spend the part of the loan that she can’t use in her business on consumption. In either case, repayment is going to be very hard.
I’ve already written of the branch’s lack of attention to attendance. But the lack of attention to our members’ businesses has been just as damaging. Loan sizes spiraled upward until a large numbers of them were bigger than what borrowers could repay.
Another consequence of this inattentiveness is that we have no way to know whether Jean’s daughters really have businesses. We’ve never seen them. My guess is that they don’t. The credit center’s women were too quick to suggest that he ask his wife to take out the loans for them instead. As though it didn’t really matter whose name would be on the contract. He was too quick to insist that they can take their loans in Pétion-Ville. Of course, I could be wrong.
Paul’s story is, in some ways, harder to deal with. It’s much sadder. His wife gave birth to a son in January. It didn’t go well, but now mother and son are doing well. She’s not ready to leave the boy at home, and doesn’t want to bring him to the meetings. So Paul has been coming to the center in her place. He’s been making repayments on her loan as well. They work together. Though the business and the credit that feeds it are nominally and normally her responsibility, he’s been running it while she cares for their son.
In January, things got much harder. She was about eight months pregnant when she got her most recent loan. Under the circumstances, she probably shouldn’t have been given a loan at all. Paul had to take the money for her and go to Port au Prince. He did their buying. When he was ready to bring their merchandise back to Marigo, robbers took every bit of it.
He and his wife made the first three repayments on their loan anyway. They squeezed them out of what was left of their business. But that business doesn’t exist right now because they’ve run out of merchandise and have nothing to buy new merchandise with. In former times, Paul would have sold a couple of goats or a cow to straighten things out. He’s had to put money into his wife’s business to help her out before. That’s part of working with her. This time, he can’t. The hurricanes last year eliminated their livestock and, for that matter, their crops. They were forced to depend on their business entirely. Now he doesn’t know what he will do. He was in tears as he and I talked after the meeting.
Righting the ship here in Marigo will require more than just managing things more carefully or more energetically than they were managed in the past. It would be a mistake to believe that I can just come in and fix things by helping the staff do things more correctly. Many of the problems here in Marigo, like the problem Paul and his wife are facing, are real.