Filed under: MICROFINANCE | Tags: Extreme Povety, Haiti, Micro-credit, MICROFINANCE
The world’s poorest women don’t need loans. They don’t need micro-credit. Their needs are too great and too urgent. Instead of calculated investment, dire circumstances force the poorest to consume with their loan. For many, it’s a question of watching your children go hungry so you can invest today and reap tomorrow, or consuming for today and all but guaranteeing loan-delinquency tomorrow. It’s an unenviable dilemma.
I recently came across the case of a woman being put in such a dilemma, and it reminded me exactly why the poorest should avoid micro-lending schemes.
Nathalie falls into the unwelcome category of “ultra-poor.” And, as is so often the case, she has a bunch of little children running around to add to her worries. Her poverty is so severe that she recently lost one of her children before his fifth birthday. Nevertheless, she managed to secure a loan. It seems that either the credit agent didn’t recognize the extent of her poverty, or he felt moved by it and wanted to offer her a way out.
Nathalie received her first loan of $25 and repaid it on time. But after receiving her second loan, for $37, she fell into delinquency. Instead of investing her loan in a product she could sell, she used her loan to feed her children. Hardly a crime, but problematic because it all but ensures her eventual loan-delinquency.
Now, late over 15 days on her second loan, it’s looking very unlikely that she’ll be able to repay at all. This is a very, very significant problem. First, already suffering the psychological pains of enduring poverty and a life on the margins, Nathalie must add the embarrassing inability to repay her loan to her list of “failures.” It’s another assault on what little hope her poverty has yet to extinguish. In addition, the four other women in her solidarity group – a group of five women who borrow collectively – stand to suffer. If they cannot come up with the Nathalie’s missing portion, the group as a whole will not receive its next loan.
This is why, even with the best of intentions, we must avoid disbursing credit to the poorest of the poor. What the poorest need is a program like this: a holistic program that supports women as they strive to get back up on their own two feet. A program that recognizes that all poverty is not created equal, that there are degrees to poverty, and that the same prescriptions used to alleviate moderate poverty will not enjoy equal success when confronting extreme poverty.
It’s important to understand the limits of microfinance, if for no other reason than to support programs that genuinely do something about extreme poverty. These are the revolutionary efforts that prepare the poorest for micro-credit. That’s to say, the poorest of the poor don’t need micro-credit today, but with the right form of support, they sure could down the line.
Filed under: The Countryside | Tags: Countryside, FONKOZE, Food Production, Haiti, MICROFINANCE, Peasants
There’s something addictive about “the field.” Out in the countryside, among peasants, where the roads transform into rocky, uneven earth. I don’t think I’ll ever be able to completely remove myself from this environment. It’s refreshing, rejuvenating.
Here in Haiti, the countryside is certainly not the idyllic, contented landscape it’s often romanticized to be. Haiti’s countryside is harsh and rugged and unforgiving. It takes lives at the same rapid pace its peasants create new ones.
Maybe the romantic notion of life in the countryside – a quaint home, fair-sized plot of land, good health, and eternal tranquility – was once true in Haiti, but not these days. Food production is too low. People can barely feed themselves on their tiny plots of hillside rock, let alone sell what remains after consumption. And schools are atrocious; hospitals are absent. It’s not a pleasant picture, but I see hope for the countryside, so maybe that’s why I can feel refreshed in an environment that should depress me.
The countryside could be better. With roads to transport harvests to markets, or with inexpensive investments in irrigation, Haiti’s peasants could produce more than just 47% of the nation’s food supply. Peasants who grow mangos could form cooperatives to export Haiti’s little treasures. Instead, poverty and circumstance conspire against them: they sell their mangos to an intermediary who will sell them in Port-au-Prince, and the only thing he leaves behind is a promise to repay the peasant once he’s sold his truck load. Maybe I’m delusional, but I have hope these things will be righted before too long.
And then there’s Fonkoze, the microfinance institution with an unshakeable commitment to Haiti’s poor. Thanks to Fonkoze, my job is to direct a program that provides hope to peasant women; a program that rejuvenates individuals and families and communities alike. Yes, microfinance only treats the symptoms of Haiti’s structural illnesses, it does little to address the root causes, but the results are beautiful and significant to each and every child of a Fonkoze borrower. A borrower who can now enroll her child in school or treat illnesses with more than tea wrung from nearby leaves.
Poverty eliminates hope because, in most cases, poverty represents the absence of opportunity. Even the most optimistic are defeated by enduring poverty. Fonkoze rekindles spirits by offering opportunity. Maybe someday the government will get its act together and inspire some hope as well.
In any event, the countryside continues to beckon me. I recently rented two rooms in a home in the wonderful provincial town of Milot, which sits at the base of Sans Souci Palace and Haiti’s Citadel. I will be there one week each month and I’ve already become known among my neighbors and at the corner where vendors sell Haiti’s famous spicy peanut butter, mamba. I’m the Haitian creole speaking blan who’s always playing with children and snacking on peanut butter sandwiches.
Filed under: Haiti, International Development | Tags: Corruption, Haiti, Inter-American Development Bank, Investment, Port-au-Prince, Poverty, Transparency International, United Nations
According to the Times, no new agreements were reached at Haiti’s recent investment conference. Nevertheless, the simple fact that we are talking about an investment conference, and not a donor conference, is a huge step in the right direction. And even if no landmark deal was conceived, it is significant that investors from all over the world decided to board a plane destined for Port-au-Prince.
Haiti has an image problem. It’s always linked to its unenviable position as “poorest country in the hemisphere,” it’s always portrayed as chaotic, unstable, corrupt, hopeless. Even with stunning natural beauty, Haiti can’t attract tourists for the life of her – save for the UN peacekeepers that fill her beaches and nightclubs (and for this recent piece of good news). And for those potential investors listening to these damning reports, sitting in comfortable offices in New York, Miami, Paris, Montreal, São Paulo, Buenos Aires, Taipei, or Seoul, without an in-person visit, it’s unlikely any investment would head Haiti’s way.
When I worked in the Dominican Republic, Haiti was portrayed as the closest thing to hell on earth. And I got this same story from nearly everyone I met. When I was in the US, media accounts of Haiti – when given a few seconds of airtime – were not all that different. These accounts scare people away – tourists as much as investors. But they can be overcome with a one-way ticket on American Airlines. Seeing Haiti, experiencing Haiti, makes a hell of a difference.
As stated by the President of the Inter-American Development Bank, which sponsored the conference, reputations aren’t changed overnight – be it for a person or a nation. But by showing up and seeing the potential for investment, Haiti’s image, and therefore future, took an important step in the right direction.
It’s now up to the state to protect investors from the corruption and “red-tape” that scares away investment. Haiti’s position as one of the world’s most corrupt states won’t make it easy to secure the trust and capital of investors, but hopefully with the help of the UN and IDB, they can be convinced of the real investment possibilities to be found in Haiti.
Filed under: Haiti | Tags: Bill Clinton, Haiti, Paul Farmer, Private Investment, UN
The UN’s dynamic duo, former President Bill Clinton and public health saint Paul Farmer, arrived in Haiti today to see what they could do about helping Haiti “escape its history,” as Clinton has put it. They spoke today at my favorite spot for Wifi and a good Hamburger, Haiti’s lovely Karibe Hotel. It’s also a great spot for an all you can eat Sunday brunch for just $10 – how I cram all my fruits and vegetables, and vitamins!, into one sitting.
My well-placed Embassy friend who met Paul Farmer at the airport today said he drove away in a $200,000 armored car. For someone who’s accustomed to roughing it in Haiti, and has been for nearly the past thirty years, the new VIP treatment must be at least a little jarring.
Anywho, I’m excited – though dare I say a bit skeptical – to see what comes out of this next few days. It’s being billed as a sort of global-investment conference for Haiti. I say “global” because the investors are arriving from as far way as Asia, Europe, Latin America, the US, and Canada – plus the ever-anticipated Haitian diaspora. The dynamic duo is trying to secure private sector investments in Haiti. Because as we all know, it’s all about jobs, jobs, jobs!
And, in all seriousness, it really is all about jobs, jobs, jobs!
