Thinking during the weekend about some of the issues we might face as we opened our office in Marigo on Monday, I was worried on several levels. There were both human and technical issues to face.
The most urgent human issue was staff morale. The people who tend to work at a Fonkoze office come from one of the classes of rural residents who have been most affected by last Tuesday’s earthquake. Very many have friends, siblings, or other family members studying in universities in Port au Prince. The schools tend to be housed in large, poorly constructed buildings. Classes are often scheduled into the early evening, so when the earthquake struck, they were full. One of my colleagues in Marigo lost a brother. Others lost cousins, nieces, or nephews. All lost friends. Many have spent days not knowing whether or not their friends or loved ones were safe. As I hiked over the mountain on Sunday, I realized that I could not know how ready anyone would be to work.
The most urgent technical issues were liquidity and fuel.
We had a smaller than usual amount of cash in our safe. A large transfer from our central office had been planned for Wednesday, the day after the quake. So I was worried that money would run out fast. Normally, we coordinate liquidity problems with help from Port au Prince. They share with us the job of ensuring we have an appropriate amount of cash on hand. But for the time being, we have no central office. It’s in ruins. The large branch in Jacmel that might help us as well is in worse shape than that. There is another branch in Fondwa, on the road between Jacmel and Port Prince, which we sometimes apply to when we are in a particular fix. Its director gave me most of the training I received in branch management and his assistant is a former member of the Marigo staff, so our relations are close. But though I saw the building still standing when I went by on Thursday – it’s one of the few that still is standing in Fondwa – we haven’t been able to contact its staff thus far. For now, we are on our own.
The main ways we ourselves bring in cash are loan reimbursements and savings deposits. We couldn’t count on deposits. Right now, our clients will be making withdrawals, not deposits. The few deposits I expected to receive as I considered the matter on Sunday would come from remittances in excess of what the people receiving them needed at the time or, if in dollars, in excess of what we could pay out. But though such deposits would improve our situation on paper, it would not put a gourd or a dollar in the vault.
Nor could we count on reimbursements. Most of our borrowers took out new loans in December to maximize their inventory for the time around the end of the year, when sales are most brisk. Fonkoze loans are repaid in six months with five equal payments that start in the second month. We do this so that our borrowers have some time up front to invest their new loans before repayments begin. Right now, however, the consequence is that not much in the way of reimbursements are due.
And even if they were due, it might not help our situation. We don’t know much yet about the earthquake’s effect on our borrower’s ability to repay. From the little data that we have, it’s already clear that we have borrowers who lost family members and that some lost their homes. It appears to have been especially damaging in the poor neighborhoods above Peredo, Marigo’s near neighbor to the east, where we have some of our best-functioning credit centers. Areas like Limè and Madival were apparently hit very hard. These are, by the way, among the areas most damaged by the hurricanes scarcely more than a year ago. We don’t yet have much information about some of the other areas around us.
We have borrowers who lost merchandise as well. I was in a credit center in Granfon yesterday, above Segen on the mountain road toward Pétion-Ville, and learned that four of its fifteen members had substantial business losses. Two had purchased loads of leeks that they were sending to sell in Port au Prince. The leeks rotted in transit when the road to the capital was blocked. Two others were bringing sugar, flour, and cooking oil over the mountain from Pétion-Ville. When the quake struck, the mule carrying their goods shied and threw off its load. Their stuff fell irretrievably over a cliff. We estimated their losses at 50% to 70% of the value of their last loan.
Fonkoze exists for its members’ benefit. There are limits to the lengths we can or should go to in pressuring them to repay what they owe when they’re in trouble, because we recognize that their repayment problems among are rarely a question of goodwill. This makes our work distinctly harder, but we really have not choice. So until our central office can figure out how to get any funds we might need to us, we can do little about liquidity but grit our teeth and hope.
Fuel is another problem. Now that the public power in southeast Haiti is out of commission, we need a regular supply for our generator. In addition, we always need a fair amount for the motorcycles we use to visit our members in the areas where they live. The fuel situation in Port au Prince is bad enough. Apparently, the main line that allows tankers to unload was damaged. But the road from Jacmel was damaged as well. Even if Port au Prince had been full of fuel, there would be no way to get it to Jacmel. Trucks cannot bring it over the hill.
But none of these issues turned out to affect us seriously. For at least the first two days, our cash has been holding up. We were helped in a way that I should have been able to anticipate. One of our best customers is a local organization that runs, among other things, a cooperative market. They sell various things wholesale. They usually make a deposit every day or two, and then make a very large withdrawal – sometimes almost 300,000 gourds, or roughly $ 7,500 – when they’re ready to restock, every two-three weeks.. They had accumulated much more cash than they were comfortable with, so they deposited about 85,000 gourds with us. It couldn’t have come at a better time.
And fuel has been a troubling expense, but not a major problem, so far. The supply from Port au Prince through Jacmel was cut off. But a new supply chain quickly established itself. Sailboats started bring barrels of it from the Dominican border. Marigo’s small port has become a fuel depot. While it’s true that this is, technically, smuggling, it’s also true that it’s working. Prices were initially very high, over $12 per gallon. (Just before the quake it had been selling for about $5.50.) But they have already dropped somewhat. At the end of the day on Tuesday, it was at roughly $7.75.
The question of morale was answered in front of my rented room on Sunday night. The staff met for a couple of hours. Though everyone was anxious to say something about their losses and to hear about those their colleagues had felt, they were all even more anxious to figure out how we would get our office up and running. Some spoke as though returning to work would be a kind of relief from more important misery, some as though it was a difficult duty, but an important one. But no one wondered whether we should open, only how.
One of the credit agents, Jean Claude, had already been working on his own, even when the office was closed. He bought his own fuel and used his own motorcycle to visit two of our hardest-to-reach centers on Friday, the day after taking the same motorcycle all the way to Port au Prince and back to establish whether his older brother, a seminarian, is alive. (He is.)
Jean Claude was anxious to know the state of the members he serves. He learned that in Mablanch, a remote area in the mountains above Belle Anse, the most urgent problem is neither loss of life nor wrecked homes nor damaged merchandise. It’s water. Area residents depend on rainwater, which they collect in cisterns. Though our members’ homes are intact, their cisterns now leak.
He also collected both reimbursements and savings deposits, which he had to hold on to until we opened on Monday.
If there was a morale problem, it was mainly a fear some had that our building could still collapse. There are minor-looking fissures. I’m not qualified to assess how minor they really are. And there have been aftershocks. But the tellers agreed they could sit in the enclosed yard in front of the building for the time being. We would manage transactions by hand, and wait to enter them into our database until we feel a little better about the building we’re in.
We’re doing a couple of things to make things easier on the staff – offering small advances on their salaries to those short on cash and a hot meal in the middle of the day – but the truth is that nothing we can do for them is the real source of their strength.
So we are managing. I hope to coax our tellers into the building in the next couple of days.