By Magdalena Malinowska, KF11 Dominican Republic
It’s about micro-lending there. Is providing credit to small businesses in the poorest country in the Western Hemisphere even a possibility? Well, it’s actually a reality, and one that’s old news! The Dominican non-profit MFI, Esperanza Internacional, has been working on helping Haitians break the cycle of poverty since it expanded its operations there in May of 2006.
So, how does micro-lending look like in a country with a failed economy made worse by the January earthquake, where 80% of population is under the poverty line and 54% of those live in abject poverty (CIA Factbook). Well, exactly the same as it does on the other side of the Hispaniola Island, but on a much smaller scale … and not in Port-au-Prince.
In the north of the country not affected at all by the tremor, small loans continue to be made to promising entrepreneurs with clearly defined business objectives. While post-earthquake relief efforts by international aid agencies continue in the capital, the rest of the country carries on by struggling to earn a living, mostly via creative self-employment. On a Caribbean-hot afternoon, I had a chance to accompany one of the loan officers in Esperanza’s Trou-du-Nord branch on a field visit.
The thirty-five-minute motorcycle ride is divided into two parts. The first ten are dedicated to speeding on a well-asphalted, brand-new-looking road – a surprising discovery given that many Dominican roads of similar size stills struggle to maintain their dignity in the midst of a multitude of potholes. “Built for the UN peace-keepers”, I am informed. Indeed, two white tanks carrying the Uruguayan contingent go by en route to their compound, which we shortly pass before turning onto a dirt path more in line with my expectations. That wasn’t the first spotting of the Blue Helmets – I talked two of them into picture-taking at the border; and it also isn’t the last – in the four days in Haiti I run into dozens of soldiers from countries as varied as Jordan and Nepal, all part of the United Nations Stabilization Mission in Haiti started in 2004.
After fifteen minutes of bouncing, swerving and helmet collisions (my first motor-cross experience?) we arrive at a small community (dust encrusted in my contact-lenses as proof of participation in this extreme sport and of the lack of visor), which looks like an African village (forgive the cliché and paternalistic comparison but it does make the point): wooden shacks serving as homes, dirt pathways that turn into mud between them, rain and well water (if lucky) to drink, marginal electricity in a handful of structures and (the most heart-wrenching part) naked, bulging bellied children crowding around as we walk towards the meeting point.
The objective of our visit is the disbursement of a new loan. This is the only difference in the loan cycle as compared to Esperanza’s Dominican operations, which asks the borrowers to come the office to get their money. All other parts are the same: there is a five-session training (basics of budgeting, accounting, marketing, and loan terms), biweekly repayment meetings in the field where attendance is taken by the group president, payments are collected and recorded in individual passbooks. And, as in the Dominican Republic, there is another vital component of each of Esperanza’s meetings: a prayer.
While this definitely sounds familiar to many readers, it may also seem strange to others. To those who feel uncomfortable with the idea of mixing religion and money, and who suspect such amalgamated organizations of veiling their evangelizing objectives with micro-finance activities, I can offer the following observation: the name of God is as ubiquitous in of a presence in the DR as are the “colmados” (corner-stores which are almost literally on every corner). From taxi dashboards to brightly-painted walls of private homes and community centers, stickers and hand-made signs with religious references are proudly displayed wherever possible all across the Dominican Republic, and Haiti. Rather than an imposition, Esperanza’s religious profile seems to be an expression of a wide-spread reality on this (not-so-divided?) island.
But, the contemplation of spiritual similitude aside, there is a very real economic difference between the two countries, which also becomes apparent when comparing Esperanza’s micro-lending activities in the two countries: 96,425 Dominican loans made to date (since 1999) vs. 9,188 Haitian ones (since 2004), active portfolio in USD: 1.5 million vs. 143 thousand, number of active borrowers in the DR: 19.253 vs. 4.562 in HT. But here the differences end: average loan amount is almost identical at about $200, as is the number of women borrowers: around 87%, and -perhaps shockingly for some- so is the repayment rate: 97% for the DR vs. 94% for Haiti. Although on different scales, micro-loans are enabling small-scale entrepreneurship on both sides of Hispaniola. And this is especially important in Haiti where employment opportunities are virtually non-existent, and where a chance at self-employment makes a huge difference in the lives of those lucky to have met and organization willing to make the trip out to their distant village to provide the capital they need. Otherwise, they would not be able to afford the trip to the city, not even for disbursal. That’s why Esperanza Haiti’s process differs from DR’s.
So, back to our field visit: who are these small entrepreneurs? With the help of a translator, an interview with leaders of four groups (of five borrowers) that are in attendance is arranged: one borrower sells charcoal in his village and along the road, one woman has a small stand with water, packaged juices, cold drinks and crackers, another woman sells onions, oil, tomato paste and other basic foods out of her house, and the last borrower sells home items such as basins, used clothing, cooking pots, plates and cups. With the money they received today they will travel to other larger towns (Cap Haitien, a large city on the coast, or to Trou-du-Nord, where we came from) and bring back items for sale that supply the basic needs of their distant community. That’s micro-finance at work.
Sounds like the types of borrowers in whom you’d like to invest your money? You do a quick search for Haiti loans on Kiva and … find nothing! Where are they, you wonder? Unfortunately, only a small portion of them make it onto the site. And when they do, they get funded in light-speed time, which is another reason they do not come up in a search. So, what’s the problem? Simple: lack of resources, of the human type. The staff time in the Haiti branch is stretched thin on such tasks as those described herein, thus not much of it is left to do all the things Kiva requires: writing profiles, printing forms, uploading photos, doing repayment reports, etc. It’s also a lot more difficult to do all this in midst of frequent power outages, high risk of theft, constant social instability, just to name a few factors which make life and work here though, even for those living outside of remote communities. While Esperanza DR enjoys the help of numerous American interns who help out with many of the Kiva tasks, not many people are willing to spend their summers off in a country permanently stuck at the bottom of all economic, political and social rankings. Understandably so – personal safety is a major issue, even for Haitians used to their own reality.
But there are plans for streamlining this process which should enable greater number of Kiva loans in the in the future. The trip I made to the north of Haiti wasn’t only for the purpose of photographing Blue Helmets and doing extreme sports – I accompanied the Esperanza Kiva Coordinator, as well as the Kiva Regional Portfolio Manager, on a visit with that precise objective. The hope -well, the “esperanza” or actually, “espérance”- is that in the near future the Esperanza Haiti will utilize its full Kiva fund-raising potential and reach many more other micro-scale creative, hard-working entrepreneurs hopeful for a break out of the cycle of poverty.
In the meantime, what should you do? Lend to Esperanza DR, since its money supports the Esperanza Haiti operations, and since 40% of the MFI’s borrowers are Haitian or of Haitian descent.