Archive

Archive for the ‘microfinance’ Category

Succession Challenges: No Easy Answers

March 29, 2014 Leave a comment

The recently-concluded meeting of the Fonkoze USA Board of Directors in Haiti was reportedly productive, motivating and enlightening. It was also the first in-person meeting of that governing body since 2006 that I did not take part in. Indeed, I am winding down nine years of service on that Board this year, in part due to a compromise made years ago that stipulated a maximum of three three-year terms for (almost) any Director.  (I only know that the meeting went well based on the fact that its Chairman and my successor, Matt Balitsaris, was kind and conscientious enough to brief me by telephone as a courtesy days after the meeting ended.)  question-mark1

This got me thinking about the larger challenge of succession planning in social sector organizations like those in the Fonkoze Family (Fonkoze Financial Services, the Fonkoze Foundation, and Fonkoze USA).

Like many social sector organizations with commercial aspects that launched in the 1990s due to a mix of management and conceptual breakthroughs, a booming economy (and a related boom in philanthropic activity), and fewer totalitarian regimes in power around the developing world, Fonkoze is struggling with how to replace aging talent on its staff and governing bodies. A related challenge is how to progressively turn over roles traditionally held by foreigners to Haitians. As with so many things that seem logical if not obvious, the devil is  truly in the details.

There are few easy answers. The values, insights, reputations and relationships of founders and long-serving employees and volunteers represent substantial assets that no organization would want to give up unless it had to. But sometimes, along with those assets come liabilities. Two examples: rigid views about how the organization should function, and holding on to roles that ambitious young talent yearn for (and may leave if they do not see a pathway to securing).   Figuring ways to gradually ease one generation of leaders into roles that maximize the assets they represent, but minimize their liabilities, is much easier said than done.  Overall, Fonkoze has dealt with this well (such as the case of Anne Hastings’ transition last year from a CEO role to a volunteer/governance role), but major challenges lie ahead.

For my part, I have said many times that when I leave my (paid) post of President and CEO of Grameen Foundation someday, I will accept no formal role in the organization for a period of at least five years.  While that would limit my ability to help the organization during that period, it would have one big benefit — it would give my successor room to grow without me looking over his (or hopefully her) shoulder, or even being perceived to be doing so.  Above all, I would not accept a seat on the Board of Directors, which I believe is a lazy and often counter-productive way of thanking and attempting to involve well-liked departing CEOs. (Though I believe putting or keeping a departing CEO on the Board can be the best option in some cases, such as with Anne’s retiring as CEO of SFF last year and continuing to serve on its Board, which I supported.)

Last year, Grameen Foundation elected its fifth Chairman — a wonderful man named Bob Eichfeld.  Within a short time of accepting the role, he asked me to write up an “Emergency Succession Plan” — essentially, what I would advise him and the other remaining leaders to do if I were suddenly killed or incapacitated.  This sounds like an obvious and sound practice, but it took me five months of procrastination before I wrote it up. Confronting ones mortality, in any sense of the word, is not easy for most people — and certainly not for me.

Interestingly, 8 1/2 years into my role with Fonkoze, I do not know whether any of the CEOs or Board Chairs have ever written an Emergency Succession Plan.  I expect amidst all the frenetic activity, punctuated by major natural disasters every few years that disrupt everything and prove to be major distractions and hardships, there has been thought to composing such documents but perhaps none has ever been completed.

Advertisements

Clay Feet, Moments of Truth, and Progress

I will do everything possible to ensure that my book does not fall into the traps of simplifying Fonkoze‘s story into some kind of fairy tale where it can do no wrong,or “hero worship” regarding its leaders.  (This week my wife has been reading “Mountains beyond Mountains”, which I originally thought would be a model for my book.  She and I agree that it has many strengths, but disappoints both of us because its remarkable author lost any real sense of objectivity about Paul Farmer.) 

I think a book reflecting complexities, tensions, setbacks and human frailty/clay feet will be  much more interesting.  Most of the time, Fonkoze staff are remarkably candid about where they fall short, individually and collectively.  Hubris has not really set in here, at least not yet!  Last night over dinner with three of the organization’s leaders, I heard many of the things typical of entrepreneurial non-profits — systems not keeping up with programs (some launched on the fly when an opportunity arose), staff voicing dissatisfaction with this policy or that, outsiders whose influence on the organization was a matter of some dispute and/or controversy, and so on.  I am glad that the people of Fonkoze are so open with me, and I will do my best to put all of this in the proper context. 

As I have probed into the history of Fonkoze and how it became the organization it is today, I have found a number of turning points (and hope to find more).  One was the kidnapping, torture and tragic killing of beloved employee Amos Jeannot in 2000, and its aftermath.  Another was the assembling of an top notch management team during the second half of 2009.  A third, not surprisingly, was the 2010 earthquake and what followed.  Just yesterday I heard several dramatic stories about the days immediately after the earthquake:

  • Two days after the earthquake, a senior Fonkoze staff member who was in a state of shock/depression gets a call from a branch in a far-flung province, saying they are open for business to customers and awaiting further instructions — and it jolts her back into action!
  • During an prayer/memorial service outside the damaged Fonkoze building four days after the earthquake, there is a strong aftershock and one employee starts running away from the group in a panic.  Anne Hastings yells out at him, saying — with a mixture of anger, compassion and urgency — that he and the organization were not going to be afraid and needed to be courageous and move Fonkoze forward.  And it somehow, Anne’s spontaneous and impassioned plea seems to have worked! 
  • Natacha Blanc, the Haitian-American director of Transfer Services, defied her family’s pleas to come to Miami with her three-year-old son and instead stayed in order to steady what remained of her team (three of he four employees were killed) and also found a school bus to go to Leogane (about an hour away),  navigating dead bodies all over the road, in order to pick up 80 children in a youth group/orphanage she volunteered for and bring them back to Port au Prince since they were injured, hungry, etc., and then set them up in tents (received a few weeks earlier for a planned camping trip!).  In her “spare time” she provided translation services for a health clinic staffed with foreign doctors who had arrived in the days after the disaster. 

As I piece together the post-earthquake journey of Fonkoze, I get the sense of many people finding stores of energy and courage that they may not have known they had.  In some ways this must be typical of what happens after a disaster of this scale.  But Fonkoze is far from typical!  Anyway, it’s going to be a challenging story to tell.  I think it will be the basis of the “sample chapter” I write as part of my book proposal. 

By the way, with the support of Grameen Foundation‘s top notch fund-raising department, I just got a grant yesterday that pays for a big part of the costs of hiring an advisor who specializes in coaching authors to make their books into best-sellers (he is a best-selling author himself).  Progress! 

And my team of volunteer advisors who are helping to create buzz about the book through social media has nearly 30 members and we have set up a listserv to make it easy for them to communicate.  What fun!

Father Joseph, Revisited

June 28, 2011 1 comment

The process of getting to know an organization and its people deeply, after years of off and on contact, inevitably includes revising prior opinions and judgments.  This has been the case for me with regard to Fonkoze’s founder, Father Joseph Philippe.  Previously, my contact with him had mostly at been at Fonkoze USA Board meetings, where he would lead the group in prayer, offer opinions that sometimes had a bit of a random quality (particularly in terms of relevance to the topic being discussed), and attempt to drum up support for his latest initiative involving the University of Fondwa, Fonkoze or the Association of Peasants of Fondwa (APF).  He always spoke in what I assume is his third language, English.  Anne Hastings, the director of Fonkoze and now SFF (Fonkoze’s commercial arm), generally communicated more effectively in these settings to American audiences.  On a few occasions I called Anne the “co-founder” of Fonkoze, once even after she had corrected me by saying that Father Joseph started it before she ever got involved.  I will not make that mistake again, especially after what I have learned this week. 

Father Joseph’s passions and accomplishments extend far beyond Fonkoze.  APF has been involved in upliftment of the poor of his native region of  Fondwa since 1988; in recent years, for example, its members have been planting 50,000 trees per year — meeting a big need in a country with massive deforestation.  After observing that many children in the area got no schooling whatsoever, and that the few who did needed to leave the community to pursue higher education, he created a primary school, a high school and his crowning achievement, a university.  Today he is in the process of energetically rebuilding those institutions since they were leveled by the earthquake.  All the while, he hosts hundreds of foreign visitors each year who are interested in working in solidarity with Haiti.  Several dozen international guests were intermingling happily with the 60 orphans who live in Father Joseph’s compound on the day we visited and interviewed him. 

One of the things that came through loud and clear in our interview is that Father Joseph founded Fonkoze using the oldest strategies in the book – painstaking research and hard work.  His early efforts with APF led him to believe that economics was critical, and through his study and thinking of that subject, concluded that the poor, once organized, needed a bank to call their own.  So he travelled to France, Israel and beyond in 1991-2 to explore different models for creating such a bank.  Early on, a credit union seemed like the logical institutional form.  He had dialogues with Haitian activists and economists, and people from abroad.  After a time, he saw problems with the idea of forming a credit union and discarded it.

In this video, he describes an international conference in Miami held in 1996, about two years after Fonkoze’s establishment in April 1994.  He had just recruited Anne to get involved and the lending operation was quite small.  Anne contacted a bunch of people Father Joseph had suggested.  You can see how he was trying to distill lessons from many countries (as diverse as the U.S., Mexico and Nicaragua) to find out what was right for Haiti, and also to identify potential pools of resources – such as the investment funds of Catholic Women’s Religious Orders – that could inject the capital needed.  (All videos are two minutes or less.)

Another aspect of Father Joseph is his boldness and the joy he takes in making seemingly outrageous requests of people to do their personal best for the rural poor of Haiti.  Here he tells the story of recruiting Anne Hastings in two parts.  First, how he got her resume and left her a message saying she was hired! 

Next, he talks about how he articulated to her the framework of Fonkoze, which in many ways anticipated what became “best practice” in the microfinance field 15 years later (!), about her working conditions (he could not give her any money or a place to stay), and about a specific challenge – to work with him to write some letters to raise the money needed for her to move to Haiti and get started.  Note the joy he takes in later involving Anne’s son in his work!

Dave Ellis, a great thinker, writer and friend, has developed a kind of spiritual discipline that I admire.  One of its principles is, “Figure out what you want, get proud of it, and then ask for it.”  I find much wisdom in its simplicity and integrity.  In the social change arena, people often ask for what they want with apology or with anger.  Dave invites us to do it with pride and clarity.  Some of us working for social change have difficulty figuring out what we really want – despite endless “strategic planning sessions” (!) – and our message is muddled as a result. 

I have been trying to integrate Dave’s principle into my life and work for years.  Among his many other attributes, I think Father Joseph has internalized this principle more than anyone else I have ever met.  What he “wants” does not relate to himself or his comforts – seeing his tiny home/office (pictured below) attests to that!  What he wants is always related to meeting the needs of the rural poor of Haiti and its grassroots organizations.

Here you see Father Joseph's bedroom, living room, dining room, etc. -- all of about 100 square feet. His "office", separated from his room by a curtain, is about the same size.

While he rarely if ever emphasizes this point, especially in a way that diminishes anyone else’s accomplishments or potential, it is clear that everyone involved in Fonkoze is playing on Father Joseph’s team, and fulfilling his vision – a team cobbled together, and a vision clarified, through a formidable mixture of diligence, optimism and faith.

Trying to make this unique individual come alive for readers in the U.S. and Europe is one of the many exciting challenges I’ll have to confront as I begin to work on the manuscript.  Ideas welcome!

Out of the Mouths of Babes

June 27, 2011 1 comment

Morgan Nelson, a 17-year-old “rising senior” at Key West (FL) High School who is the daughter of dear (and, by the way, quite entrepreneurial!) friends of ours, joined Emily and me on the first week of our trip to Haiti.  She more than “earned” this trip by starting a club at her high school – “Microfinance Matters” – that raised money for and awareness about this exciting and evolving poverty reduction strategy.  (I was thrilled that Grameen Foundation, which has given me the sabbatical to work on this book, was the beneficiary of the grant from the club.)  She also earned the money for her airfare to come here through baby-sitting and waiting tables throughout the year. 

It certainly weighed on me that she is just a few years younger than I was when, in 1987, I wrote a letter to Professor Muhammad Yunus, asking him to take me under his wing to learn about how to be a force for helping to create a poverty-free world.  And if SAT scores are any indication, Morgan has more raw talent than I did at that age.  How could I refuse?

Morgan had quite a learning experience during the last week.  Physical discomfort and sadness mixed with exhilaration, deep insight and, naturally, confusion.  She was a trooper throughout, trying to wring every bit of learning possible from her time here.  She was courageous enough to confront her own strong emotions when she came face to face with poverty that was not going to be erased quickly, if ever.  She was honest and candid enough to occasionally be critical of Fonkoze – an organization she clearly admires – and then open enough to hear others’ views.  On several occasions she asked questions of Fonkoze staff or clients that elicited much more interesting answers than my own questions — and her photos were a real gift to this project also!     

On this mostly overcast Sunday in Port au Prince, as I look over my notes from a long brunch with Anne Hastings where she told us the story of Fonkoze’s frantic efforts during the ten days after the 2010 earthquake (more on that in a day or two), I want to let Morgan speak for herself in three videos that are each less than 90 seconds long.

In the first, below, she talks about what was most memorable about the week.  Not surprisingly, she focuses on two borrowers – one an old hand at being a Fonkoze member, one about to begin – and then on Father Joseph Philippe, the founder.

In the second, she responds to a question probing something she wrote on facebook, about seeing some “hard things” here.  You can see her struggling to articulate the reality of entrenched poverty.

In this third segment, she shares a message to other students around the country and around the world, who might not have had the chance to visit Haiti or any developing country and see microfinance in action, but who have an impulse to help.

There is clearly a new generation of talented, idealistic young people who want to do their part to confine poverty to history books and museums.  Morgan Nelson is one of that generation’s leading lights.  I was pleased to play a small role in her learning process this past week.

And she is coming back here in July to do a service project with some fellow high school students.  When Anne Hastings heard that, she gave Morgan her business card and said she’d be willing to do anything to be helpful to facilitate the learning of Morgan and her friends.  Clearly, I am not the only person working to support the next generation of anti-poverty activists.

Paolo Freire, meet Muhammad Yunus (courtesy of Father Joseph)

June 26, 2011 3 comments

As we drove around Haiti last Tuesday (our first full day in the country), I was impressed by a few things.  One was that a lot of the rubble (and other evidence of the earthquake) has been cleared since I was last here in March 2010.  Reports that the capital in particular had been impervious to positive changes proved inaccurate.  Another was the proliferation of microfinance organizations here – in even mid-tiered cities we drove through, and in Okay where we stopped, there were quite a number of microfinance institutions with signboards and offices.  Still, Fonkoze is the leader in terms of number of loan and savings clients. 

But it is a leader in other ways as well.  It is launching a micro-insurance program that is being watched by the microfinance industry globally due to its scale and its innovative approach (more on that in future posts — including the fact that the first payouts to clients affected by recent flooding in this part of the country are being made this month).  Another way that Fonkoze leads is with its human development programs that are fully integrated with its microfinance offerings.  One of those, arguably the most important, is an adult education program that is based on the ideas of Brazilian educator and author Paulo Freire – where the poor are trained to educate their peers. 

Fonkoze clients in the solidarity program – the largest of the organization’s four borrowing levels in terms of number of clients – meet twice each month.  Once to conduct their financial transactions, and once to learn.  In the center meeting we went to yesterday, there were three groups.  Two were focused on the more advanced four-month module focused on business management best practices (led by specially trained clients), while one was the most basic module that is about learning to write your name – which for the women who never attended school (or only went for a year or two decades ago) is quite a challenge, and accomplishment once they master it.  The entire approach to literacy was, in the words of Steve Werlin, who has worked on it intensively from 2005 to 2009, “invented by [Fonkoze founder] Father Joseph, whole cloth.”  (Father Joseph is a Haitian Catholic Priest who spent several years studying how to bring economic empowerment to the rural areas, then conceptualized what was needed — a “bank for the organized poor” — and starting in 1995 began recruiting the team from Haiti and abroad to make it happen.  We visited him Saturday — more on that in future postings.)

Here is a very short video (under one minute, like all of those in this post) of one of the business development training sessions (an advanced module)  in action.  The woman in the purple hat doing most the talking is a peer trainer — she is a market vendor with a little more education than the others, who received training from Fonkoze to give instruction her fellow borrowers. 

Here you’ll see one woman going up to the chalkboard to write her name, and her peer educator standing beside her with encouragement and correction.  (You’ll hear the voices of others not in the picture.)  She is part of the group doing the basic literacy module (which like all the rest is four months in duration).

Finally, here is a video of Linda Boucard, our host who describes the power of simply learning to write ones name for the first time.

Clearly, Fonkoze is about more than just handing out loans – it is about using microfinance as a platform to catalyze self-discovery, self-empowerment and transformation.  It does not always work, as it like all human organizations is far from perfect, but its aspirations as well as its ability to execute its plans are quite impressive.  Telling its story seems, more than ever, to be a worthwhile challenge for me.

Marilyn’s Story

June 25, 2011 4 comments

Yesterday was quite a day. We began with an interview with one of the heroic tellers at the Marigot branch, Beatrice Fleurant-Fils (see photo below). She and two colleagues worked day and night for a month to process remittance payments and savings withdrawals for four branches, since they were the only local branch with consistent electricity and internet access. They did all their work outdoors, exposed to the elements, since they were afraid of going inside the badly damaged building (which is across the street from their current office). Steve Werlin did all the data entry on the computer; in Beatrice’s recounting, Steve claimed that as a “dumb foreigner” he didn’t know any better than to feel safe enough in the building to go inside for 8-10 hours per day!

Here I am with Beatrice, the "heroic teller", after we interviewed her. (Photo credit: Emily Wainwright)

After that, we had a long interview with the regional manager, Beauliere Francois, and the Jacmel branch manager (or director in Fonkoze parlance), Pierre David Dorval. It was very dramatic to hear them talk about their life journeys and how they came to work in Fonkoze. We talked a lot about the earthquake and its aftermath, and after the interview we went to see what remains of the building they used to work out off – one that I remember changing money in during a visit in March 2006. They recall their first instinct was to send the credit agents to the field to let Fonkoze clients know that Fonkoze was OK and committed to providing service to all of its clients within a short time (even though they were not exactly sure how they would do that!).

Lastly, we travelled to a slum area of Jacmel to interview Marilyn Bayonet. Her story is quite dramatic – I’ll try to resist telling all of it here. She had taken and repaid loans of US$90 and $120, and was paying off a loan for $200, when the earthquake hit. Her businesses included selling fried food and soft drinks on the beach, and also selling suitcases, used clothes, and tennis shoes. She is quite entrepreneurial, shifting her product mix based on the seasons and fluctuating demand. In the earthquake she lost her home and most of her business assets – and what was not lost was stolen in the immediate aftermath as lawlessness reigned. With her five children, she first sought out shelter in a local park, and then on a soccer field that became a tent city – where she remained for five months in horrifying conditions. She would get food from the group that set up the tent city on occasion, but she sensed there was a lot of corruption.

Walking through a narrow alley in a Jacmel slum on the way to Marilyn's tent (photo credit: Morgan Nelson)

She re-established contact with Fonkoze after a month, when a credit agent located her in the tent city and, seeing her condition, immediately gave her $1.50 from his own pocket. (Somewhat later, Linda Boucard from the head office – who has been wonderful in arranging my trip here! – gave her and the other members of her center $13 each, from her own pocket also.) In May 2010, her situation reached a turning point of sorts. She moved into a tent that was constructed by the international charity Med Air on the site of her original home (where she still lives now), and receive the $125 payment from Fonkoze that was part of the insurance they all received retroactively (and also the balance of her $200 loan was repaid for her). This enabled her to buy clothing and other essential for her children and travel to Cap Haitian to see her sister, since she had lost contact with her.

Marilyn Bayonet (photo credit: Morgan Nelson)

Then she borrowed $200 from Fonkoze to restart her business.  Her various ventures have generally gone well, except that she still experiences occasional theft from her tent. All her children except the oldest, her 14-year old son, are back in school (her son helps her with the business).  She has one chicken; she bought six with her profits and five died unfortunately. She just paid off her loan and is gearing up to take one for $400 to expand her business further. Clearly, not having a stable home (i.e., living in a tent) is hard for her — particularly as she had previously worked hard to set aside the money to build a modest house on this land that was owned by the grandmother who raised her.  Now that house is but a memory. 

On the drive back to our hotel, we were all reflecting on Marilyn’s situation. One person on our group said she felt that she clearly lacked the charisma and optimism of the women we met the previous day on the mountain, and said that it was unfortunate that Fonkoze could not help finance a new house for her. Another characterized her mental state not so much as pessimism as “grim determination.” I am thinking of making Marilyn a major character in my book, along with Iliamene whom we met the day before – together they represent two different ends of the spectrum of Fonkoze’s clientele. I’d need to return here in July to re-interview them to get their complete stories. Figuring out how to spend my time here in July is one of the many challenges I have before me.  I welcome reactions and advice from any and all reading this blog!

Walking up the Mountain

June 24, 2011 1 comment

Emily, Morgan and I had an incredible (and tiring) day yesterday.  We hiked nearly two hours uphill after crossing a river by foot (my shoes were soaked until the tropical sun dried them), and then something like 90 minutes back (downhill).  We were accompanied by an incredible American, Steve Werlin, who has been associated with Fonkoze since at least 2005 (when he started living in Haiti full-time after off and on living/working here since 1996).  Also in our group was Wilfix Derameau, the manager of Marigot branch who succeeded Steve in that role more than one year ago.  (Steve, who utterly lacks any trace of the infamous male ego, has been doing all sorts of different things from Fonkoze these past six years — his basic working principle seems to be, “put me where you need me”.  He speaks Creole fluently and his academic training is in textual interpretation, especially ancient texts!)

When Steve took over this branch in 2008, it had 1600 clients — many who were defaulting on their loans.  He cleaned up the portfolio by re-motivating the team, enforcing policies, bestowing kindness and leniency on those who wanted to turn things around, and working his ass off.  At one point the number of active clients dropped to 600.  Now, under Wilfix (who was a credit agent working under Steve who was identified as a high performer and sent for special manager training at the end of Steve’s tenure), it has 1680 clients and is still growing.

Iliamene (in the blue dress) with Wilfix (striped shirt) and Steve (orange shirt)

For Steve, who deflects almost all credit to the turnaround of Marigot branch to his former branch colleagues, this was a trip down memory lane, receiving hugs from clients such as the indomitable, force-of-nature woman named Iliamene Joseph Madam Jean Marc  (pictured here) who leads her local solidarity center and seems to coordinate the activities of nearby centers (including those where the entry point was the Ti Kredi product mix designed for poorer clients).  Iliamene is one of four women from this branch who will be attending the annual assembly of selected center chiefs in Port au Prince in early July.  The assembly is a key part of the Governance structure of Fonkoze. 

We met a wide variety of clients — very poor ones just entering a Ti Kredi center, and ones who seemed much more prosperous (who usually had been in the solidarity loan program for a number of years — Iliamene since 1996!).  On our way  back down the mountain we met two women who were cleaning vegetables they had bought earlier that day in a farming region much farther up the mountain.  They got up at 2am that day, went to the market town, bought produce, and were to spend the afternoon cleaning them before going to Jacmel by public transport the following day (today) to sell (we might see them since we are going there today). 

Some borrowers said that their life changes after joining Fonkoze were significant, in other cases, it was much more limited.  In some cases, the lack of impact was related to losing assets due to health expenses or natural disasters (such as the flooding that took place just a few weeks earlier, and for which the women are hopeful about getting insurance payout from Fonkoze since they paid premiums that were deducted from their most recent loans at the time of disbursement).
 

We learned a ton of things from Steve about the current state of Fonkoze.  He writes a great blog about his work here and I read all his posts as preparation for this book.  But the best thing about yesterday was, for a few hours, walking in the shoes of credit agent through the dusty mountain roads of Haiti, and talking to women who had experienced the benefits and limitations of microfinance provided in the unique way that Fonkoze delivers it in this most challenging of environments. 

I am still trying to upload videos taken Tuesday (and my attempts to crop the photo here proved frutless) — thanks for your patience!