Security in Fòche

The credit center in Fòche is beautiful. It’s underneath the massive spread of an old mango tree. The branches must cover a circle, at least forty feet across, that is enclosed by a fence of woven palm leaves that’s five or six feet high. A couple of additional palm-leaf walls reach ten-twelve feet from the outer wall towards the center. They divide the space along the circumference into classrooms. This same tree is home to a primary school. There were two groups of little kids doing very basic Math and French while we were visiting.

I call what I visited in Fòche a “credit center.” The term has a precise meeting in the context of Fonkoze’s method for disbursing microcredit.

Fonkoze’s main credit program does not involve loans to individuals. Instead, money is lent to groups of five women – friends, family, or neighbors – who borrow it together. The women agree to take shared responsibility for repayment. This has two important advantages. First, it serves in lieu of collateral to guarantee repayment of the loan. Fonkoze borrowers don’t sign over anything, and yet they repay their loans at high rates, partly because of the responsibility they share. Second, it encourages solidarity and collaboration among the women. It helps ensure that they all have obvious places to seek advice and support. They can just turn to one another.

These groups of five are collected into credit centers of six-eight groups, or thirty to forty women. The centers give Fonkoze a way to organize the delivery of services like credit, but also other financial and educational services. Members of a credit center do not have to come to Fonkoze’s branch to receive credit or to make a payment. The branch sends a loan officer to them. Centers broaden the sphere of solidarity available to members. Instead of having just five women to depend on, a woman is a member of an organized collection of thirty to forty women who come together regularly to get new loans or repay old ones, but also to share their problems, their advice, and their experiences with one another.

Ideally, centers would meet quite regularly: once a month for loan transactions – either disbursement or repayment – and once or twice a week for educational programs like Basic Literacy, Business Development Skills, and Health Education. In addition, there would be one meeting per month just to chat.

But providing educational programs depends on funding. The programs Fonkoze offers are inexpensive. They cost only about $25 per participant for a four-month class. But income from interest doesn’t yet cover this cost, so Fonkoze has to depend on outside funding. We work very hard at fundraising, but it hasn’t been enough to offer the programs at all thirty of Fonkoze’s branches. So at least half of Fonkoze’s credit centers have occasion to meet only twice per month – once for loan activity and once to chat.

But things are more complicated. Holding a meeting of busy business women just to chat turns out to be difficult. Credit agents and the centers’ elected leaders, who share responsibility for these meetings, can lack both the skills to nurture dialogue and ideas about issues that center members might profitably discuss. The meetings can deteriorate into lectures – or, rather, sermons – about the importance of timely loan repayment and proper loan investment. Attendance at these meetings drops off, and understandably so, because participants who are working hard to build their businesses don’t really feel their benefit.

The loss of these discussion meetings is expensive for Fonkoze and its membership in two ways. On one hand, there is the cost of a lost opportunity. The advantages the women could gain by getting together regularly and sharing advice fall away. On the other, the discipline of loan repayment tends to weaken because center solidarity isn’t there to reinforce it.

So we decided to work at making these monthly dialogues more meaningful. We would create lesson plans for them. The plans would address issues important for Fonkoze’s membership, and they would also outline simple procedures designed to help the credit agents who use them to encourage dialogue among members.

I’ve written two so far. One is about credit center security. This is extremely important because the centers are unguarded locations where large amounts of cash regularly changes hands. Few of these centers are anywhere near the nearest police. The lesson is built around a short story I wrote based on a theft that actually occurred at one credit center when members and their credit agent were negligent. The other lesson plan is about different ways a small business woman might decide to invest her profit. It’s a story of three women: one who reinvests profit into her business, one who uses it to buy additional income-generating assets, and one who uses it to send her children to fancy and expensive schools in Pòtoprens. Both lessons come with questions for the women to reflect upon and with instructions for the credit agents as to how to divide the women into small groups to address the questions.

Our first experience with one of the lessons was last week, in Fòche, a small community off the main southern highway from Pòtoprens to Okay. It’s just outside of Grangwav. The center in Fòche is served by Fonkoze’s small branch in Twen, which currently has no educational programs. It’s long haul from Twen to Fòche. The direct road has been so badly eroded by flooding as to be nearly impassable. Only during the dry season can a motorcycle weave along and through shallow river beds. So the credit agent regularly makes a great circle out of the Twen valley, up to the stunning mountaintop road that runs between Leyogann and Jakmel. He takes that road all the way down to the southern highway, which he then takes to Fòche. The route takes about an hour and a half.

I went to Fòche with two Fonkoze credit agents. Our plan was that I would lead the meeting, following the lesson plan, and they would observe. Later in the day, we had another credit center meeting scheduled back in Twen, and one of them would lead the same discussion there. That way, we would all get to see whether they were comfortable with the way the lessons were designed to work.

We got to the center as the women were beginning to arrive, and soon there were almost twenty, a little more than half the center’s membership. After introductions, I explained why we had come. I then read the story out loud – many of the women need to learn to read – and one of the credit agents read it a second time. Then we divided the center into groups of four to five women, and asked each group to come up with answers to a couple of questions. Each group was asked to explain what caused the security problem in the center the story describes, and then each group was asked to say what one or more of the characters in the story might have done differently to prevent the problem. After about fifteen minutes, we returned to the circle to share answers and for further conversation.

The meeting went splendidly. The women seemed to really enjoy themselves, and they had a lot to say. They spoke well about the importance of secrecy, and also of attending all center meetings. They pointed out that if they only come to the center when cash is going to change hands they make the center an attractive target. If, on the other hand, there are other regular activities, robbery becomes harder to plan.

The women had good questions, too. For example, one asked whether, when a credit agent is robbed as he returns to his branch after collecting repayments, the credit center members are then responsible for making up the loss. It provided a great chance to remind them of the importance of keeping their receipts.

The women really held us there with them with their questions. They are very upset that they’re not getting the educational programs that they’ve heard about. They resent having to sign loan agreements and receipts with their thumbprints. They feel they need to learn more about running their businesses. I explained the problem we have funding these programs for everyone, and they understood, but my saying that we are growing quickly is cold comfort to those whom we haven’t reached yet. On the way back to Twen, the credit agents and I worked on a cheap way we might get some version of a literacy program to them.

By the time we were able to leave the center, it was getting near time to be back in Twen for the other meeting. We took a chance and took the direct road, hoping it would help us arrive in time. It was very tough going for the agent who was driving the motorcycle. We crossed a shallow but quickly-flowing river at a couple of points and, what was sometimes harder, had to run along the river’s pebble-ly bed. We were within reach of Twen, when the back tire went flat. The driver managed to get the cycle the rest of the way, but the other credit agent and I had to walk almost 45 minutes. By the time we arrived, it was much to late to go to the meeting.

The experiment will now continue. Fonkoze has chosen three branches in different parts of the country. By the end of April, we like to have implemented the new lesson plans branch-wide in all three. We would like to do a real study to see whether credit agents can learn to use these lesson plans and whether the plans can improve attendance at credit center meetings. If both answers are positive, we’ll know we have a new tool that it’s worth really investing in.