It’s hard to think of a country that has had a more difficult year than Haiti. But whilst most of us only hear the headlines– linking the country to cholera and post-election chaos in addition to the dramatic shockwaves of January 2010 – microfinance professionals on the ground find they can still make a difference to people’s lives.
e-MFP caught up with Franck Renaudin to find out about the activities of member Entrepreneurs du Monde in Haiti and how their working environment has changed since the earthquake.
EDM’s pre-2010 work in Haiti was already widespread, working with some 5000 small loan borrowers. EDM’s particular focus was providing loans to excluded individuals living in very poor or difficult neighbourhoods in Port-au-Prince. These clients would not ordinarily have had access to financing mechanisms.
Such groups however, were in fact less affected by the earthquake than higher-income groups as a result of the slum housing that most individuals occupied, meaning that EDM have been able to continue much work with previous clientele. Still, 50 loan holders, representing 1% of EDM clientele, were left unaccounted for after the quake. This is significantly less than the 10% estimated to have lost their lives in Port au Prince overall, but is nonetheless a great loss.
EDM furthermore reviewed their remaining clients’ living situations and their capacity to continue their loan repayments. For those severely affected, the loans were written off, and conditions were eased for the remainder– rescheduling the loans and reducing interest rates from 3% to 0% until end of June 2010, and then to 2%.
Being familiar with Haitian society and the environment, EDM also became a valuable partner for networks and institutions seeking to support large-scale infrastructure rebuilding activities. This has led the organisation to enter into new spheres of aid work such as cash for work street clean-up operations (funded by the UN’s Emergency Response Relief Fund (ERRF) that is supported by the EU). In another programme supported by Fondation de France. EDM is scaling up its lending activities through loans programmes (of €1000, 2000 or 5000) targeted at small and medium sized enterprises.
Of course, it is in many ways a challenge to generate significant economic activity when so many people have lost their assets and sources of income and many are relying on hand-outs to sustain their basic needs. Yet EDM are still seeing a demand for some innovative schemes. For example within the many camps that have been set-up up outside of Porte au Prince where some 20 000 people are thought to be staying, there is scope for services such as transport, bakeries, internet access...etc. EDM are currently piloting a production and storage facility project that will charge enterprises and organisations a small fee to safely produce and store equipment. If successful, the idea can be extended to other locations. Solar schemes that provide access to electricity are also in demand within the camps and provide a good model for income generation.
Franck emphasised the importance of EDM’s focus on income generating projects in Haiti, an approach that is under represented in the otherwise rather crowded NGO scene. Most organisations support operations focused on humanitarian aid and providing services for basic needs. The work of EDM therefore represents the key niche of microfinance projects that support people to help themselves in a sustainable fashion.
EDM’s disaster relief work also demonstrates how flexible microfinance activities can be in quickly adapting to scenarios and scaling up support programmes. Working in the Philippines, EDM have responded to the recent fires in Manila that destroyed so many homes, by providing loans for housing purposes – these loans have longer pay-back periods of around a year. “The key challenge is being capable of responding in the immediate aftermath – that’s when people need funds the most, but they often take some time to raise and deliver. We are now working towards an ‘emergency fund’ that will allow us to respond more immediately to disaster needs” – Franck Renaudin.
With climate change, disaster relief and adaptation capacity will become more and more critical. The experiences of EDM demonstrate how microfinance can be part of our response to the challenges ahead.
