Educating for economic resilience
Fonkoze positions itself as Haiti’s leading alternative bank for the country’s poor, providing a service that integrates lending to marginalized customers along with more grassroots social organization and knowledge-building initiatives. These are all designed to improve financial knowledge, boost business skills, and improve the country’s long-term economic potential.
These financial education efforts include the Chemen Lavi Miyo program, which teaches women asset management, and the Ti Kredi program, which lets them slowly build credit through staggered loans over the course of a few months. The schemes are designed so that participating women progress through each program in turn. If all goes well, they should emerge at the other end as trained micro-entrepreneurs.
So far, Fonkoze’s programs have been enjoying strong rates of success – 92% of participants graduate from the Ti Kredi program, while close to 100% of those then are able to afford to send their children to school.
Health and education
The company also offers health and education programs. This, just like the financial education programs and microfinance initiatives, makes good long-term business sense. The healthier, better educated and more knowledgeable about business and finance they are, the stronger and more resilient their local economies should become. This, in turn, helps create a stronger, more prosperous customer base for more financial services.
“When very poor people have access to a savings account, small loans and a way to receive transfers from family members abroad, their businesses can grow, their children can go to school and there’s food on the table,” says EY’s Klaus Hoffmann, who helped advise Fonkoze on financial management and accounting services.
Before working with EY, Fonkoze had already established a strong alternative banking product with strong rates of repayment. However, its potential to scale its service to reach the broadest base of customers possible was undermined by internal inefficiencies. To solve this, Klaus helped make Fonkoze a more sustainable, scalable business by implementing new ways of working. These included bringing Fonkoze’s accounting practices up to international standards, implementing training programs, and setting up a new organization structure with clearly defined roles, responsibilities and reporting lines.
By its very nature, microfinance starts small. Yet, Fonkoze has demonstrated how microfinance initiatives can equip people with the means and the skills to move themselves and their families out of poverty.