Fonkoze and Madam Saras
Last fall I heard for the first time a term for a new type of Fonkoze client that almost made me giggle – “Madam Saras”. It turned out to be Fonkoze at its opportunistic best – responding in an entrepreneurial way to three developments:
- its excess liquidity (i.e., more savings deposits, on which it pays a nominal rate of interest, than it has in microloans outstanding),
- the problems its poor women vendor clients were having getting merchandise because the wholesalers they bought from were not able to import enough after the earthquake, and
- many of the wholesalers were savvy businesswomen (known in Haiti as “Madam Saras” which refers to birds that make a lot of noise and always move in flocks) who had lost inventory in the earthquake and had their credit lines reduced or cancelled by the mainstream banks.
The dynamic leader of an association of 15,000 of these wholesalers, Marie Yannick Mezile, approached Anne last year as one of their critical buying seasons approached and asked if Fonkoze could give them the loans they needed to resume importing on the scale required. Anne and some of her colleagues went back and forth with the Marie, saying they were reluctant to lend poor clients’ savings unless they could be sure it would be repaid and also help relieve the bottlenecks that impacted on Fonkoze’s traditional loan clients. Ultimately, they worked out a deal that began with a pilot where 30 “Madam Saras” borrowed around $50,000 each (based on my back of envelope math), and later this was expanded to 104 and 117 clients who received loans repayable in up to three months. Today, the director of what is now a full-fledged Fonkoze loan program has a file cabinet full of new applications – so there is significant growth potential.
Yesterday I met three Marie (far right in the photo) and two of her colleagues: Elissaninthe Bonhomme Joseph (not pictured) and Marie Jacques Rene (far left). Since the 1980s, they have been travelling to places like Panama, Taiwan, the U.S. and China to import as many as four containers worth of merchandise at a time. They used to travel in groups of about 10, but now as small as 3-4 women. They have an association of 15,000 and a federation of 43,000 – I am not exactly sure of the difference between the two – and they do business with AID, the Inter-American Development Bank, and the country’s major banks. They walked me through the process they have worked out with Chinese vendors and regulators, and a similar process in Taiwan, and my head was spinning. There is a pecking order: the most advanced women importers are called “limenna” (meaning unknown to me), the next most advanced are “Madam Saras” and then there are “timachaan” (retailers, of which Fonkoze clients probably constitute the smallest, most rural types). Their association is composed of about equal numbers of each of these three groups.
Why would partnering with Fonkoze – who now lends them (collectively) about $5 million four times each year for various buying/selling seasons such as back to school and Christmas – make sense for these women? I asked them. First, they said that they felt “left in the lurch” by their previous lenders (even though some are now trying to reacquire their business). Second, there is Fonkoze’s interest rate (2% per month), which, in their words, “can’t be beat.” Third, Fonkoze does not have all sorts of hidden/annoying fees that the other banks seem to have. Lastly (and this is my theory), they like being part of an institution that does the bulk of its business with female entrepreneurs of more humble means and feels women-led and truly “Haitian” in its work style/culture.
After wrapping up my interview with the three women (who kept getting calls that would lead them to bark a few instructions before hanging up) I met Ludmiya Garraud, who was recruited in April from one of the country’s mainstream banks to run what is now called “Kredi Cho” under the direction of Fonkoze/SFF COO Georgette Jean Louis. (Actually, her portfolio is a bit bigger, comprising some loans to two IT companies if I understood correctly, and is called in English “Special Loans” division.) She seems to be adapting well to the fast-paced, entrepreneurial organizational culture here at Fonkoze.