One evening in late January, an armoured car carrying $2-million in U.S. cash packed into non-descript office supply boxes rolled onto an Air Force base in Miami.
With the White House’s approval, the boxes were loaded on to a C-17 transport plane, which touched down with the load in darkened Port-au-Prince around 3 a.m. A pair of Black Hawk helicopters took over from there, flying in formation to deposit the cash at 10 drop sites spread across the Haitian countryside.
By sun up, the money was being moved once again, although not into the hands of cash-strapped banks paralyzed by the earthquake, government officials or local kingpins. Instead, in less than $10 increments, cash was being doled out to many the country’s poorest people – the largely rural clients of Fonkoze, a national microlender that is one of Haiti’s unsung heroes of the earthquake recovery.
A relatively small player in the Haiti’s banking sector with 42 outlets across Haiti, Fonkoze has proven itself one of the most nimble financial institutions in the quake’s aftermath. Although a chunk of its infrastructure was destroyed, including the company’s headquarters, Fonkoze has ramped up its pace since January and worked feverishly – out of a van in one area and beneath tarps in others – to economically resuscitate a cash-poor swath of the population, forgiving debts of existing clients hobbled by the quake, issuing new loans and paying indemnities of 5,000 Gourdes (about $125) to get families back on their feet.
“Many of our clients are people who are selling rice, beans, spaghetti and tomato paste,” says Anne Hastings, Fonkoze’s chief executive officer. “We are unique in that … we are trying our best to reach the very, very poorest people. We’re about ending poverty, the kind of extreme poverty that leaves people without any hope.”
Fonkoze’s newest innovation for chipping away at that critical mass is called Project Zafèn, a post-earthquake lending and donation initiative that translates to “it’s our business” and aims to link prescreened non-profit and for-profit Haitian businesses with donors around the world. Bridging the two groups is a glossy website designed to allow donors from the Haitian diaspora and beyond connect with featured enterprises in need of assistance, much like they would browse an online shopping website. Via the PayPal system, donors and lenders can funnel funds directly to the projects they deem most deserving.
Although the project is a joint initiative involving the Worldwide Vincentian Family charity, DePaul University and the U.S.-based Haitian Hometown Associations Resource Group, it is Fonkoze’s practised analysts who have been charged with collecting business profiles and conducting due-diligence on the enterprises that merit consideration for the project.
The screening system was born out of numerous requests to Ms. Hastings from nervous Haitian-American investors – whom she is constantly courting to invest more in the country – to help inform their decisions on which enterprises to back.
“They’re always saying ‘We don’t have the information we need to know who we should invest in,’” Ms. Hasting says.
Fonkoze analysts were accustomed already to dealing with disorganized details of borrowers’ livelihoods that would turn off large commercial banking institutions: issues of lost financial statements; hand-written inventory lists, eviction notices and family troubles. And so, in recent weeks, people such as Dominique Charles, a multilingual business analyst, have been dispatched to the wrecked communities across Haiti to unearth needy entrepreneurs for small, interest-free loans and donations that most commercial banks would shun. Focusing on the small and medium-sized business sector – a classification that covers the majority of Haitian businesses outside of the capital city – is the key to igniting Haiti’s economic engine, according to Fonkoze’s philosophy.
In Jacmel, where there is no large industry and the economy is propped up by a few heavy-hitting businessmen and a legion of small-time art, food and street vendors, half a dozen business owners have already applied for a Project Zafèn loan or donation.
Erick Lafond is a papier-mâché artist who specializes in replicating the intricate architecture of the city’s historic French-Colonial houses. He was once commissioned by then president Jean-Bertrand Aristide to build a model of the National Palace and he sells other replicas to U.S. clients for up to $5,000 apiece.
Mr. Lafond applied for a loan of $1,500 to help build up stock he lost in the earthquake, expand his market reach and take on a small staff of trainees. Online contributors, who can access his entire loan request file, have already pledged to loan 30 per cent of his goal.
Another applicant is Molver Desire, proprietor of an artificial flower and baby gift shop in Jacmel that was heavily damaged in the earthquake. She has yet to be added to the Zafèn site because, Mr. Charles explains, she has not convinced the project’s steering committee that funding her request would have an impact on the broader community – a key element of the Project Zafèn criteria.
There are also some worries, Mr. Charles says, over whether she’ll be able to generate enough business to repay the loan, however small.
“This is a loan and you want the people who donated to know they are going to get paid even though there’s no interest,” he says. “That will go to the success of Zafèn.”