Despite earthquake, Haitian microfinance continues to serve rural poor

Over the past week it has been impossible to ignore the scenes of utter desperation coming out of Haiti. After being ravaged by four storms in 2008, last week’s earthquake once again devastated one of the world’s poorest nations, effectively resetting the clock on its development. Despite this, however, the stepping-stones of the rebuilding process are being laid.

One organization that is rising from the rubble is Fonkoze, a microfinance organization operating predominantly in rural Haiti. With assistance from IFAD’s multi-donor Financing Facility for Remittances, Fonkoze purchased satellite phones and diesel generators in 2007. This equipment was intended to allow Fonkoze to deliver remittance services in rural areas where basic infrastructure is often undependable or lacking. But in the wake of the earthquake, the true value of this investment is coming to light. In spite of a host of difficulties, Fonkoze remains operational only days after the earthquake.

The reason why these services are so vital is due to the massive contribution that remittances make to migrants' families, to their communities and to the country as a whole. More than $1.9 billion dollars was sent to Haiti in 2008 alone, more than official development assistance and foreign direct investment combined. With more than half of these funds going directly into the hands of families in rural areas, remittances are key to meeting short-term needs and to encouraging long-term development.

This short video was produced last year after four successive hurricanes battered Haiti. It tell's the story of two Fonkoze clients and examines the impact the bank has had on their lives.

After ensuring that Fonkoze personnel and their families were safe, Fonkoze director Anne Hastings and her staff set about the process of bringing services back on-line. During a conference call yesterday she laid out the challenges including a destroyed headquarters, security concerns and limited supplies of cash and diesel. Despite this, however, 28 Fonkoze branches are open for business today.

Hastings is sure her institution can play a vital role in making it possible for Haitians abroad help their families rebuild. Partner institutions such as MoneyGram and City National Bank of New Jersey have either eliminated or drastically reduced fees to make sure that the maximum amount of money reaches those who need it most.

Robert W. Meins,
Remittances Specialist,
Financing Facility for Remittances

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Recent article on MSNBC: Earthquake disrupts key payments lifeline (MSNBC)