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October 22, 2004
Fonkoze Partners With Zanmi Lasante to Link Microfinance and Health in Haiti
    by William Baue

The largest microfinance institution in Haiti teams with a renowned community health provider to launch a new bank and hospital in a rural village.

Hurricane Jeanne. Political instability. Violence. Deforestation. Illiteracy. HIV/AIDS and tuberculosis. Abject poverty.

Such problems (and more) are inextricably linked in Haiti, exacerbating each other in a downward spiral. How do Haitians, living in what is considered the poorest and least developed country in the Western Hemisphere, reverse this spiral to climb upward?

Extricating themselves from such webs of difficulty requires addressing multiple problems simultaneously to create positive instead of negative synergies. Practitioners on the ground in Haiti understand this necessary strategy.

This past summer Fonkoze, Haiti's largest microfinance institution (MFI), joined hands with Zanmi Lasante, a renowned rural health care provider in Haiti, to concurrently launch a new bank and hospital in Boucan Carre, a needy community of 10,000. Fonkoze is a Haitian Creole acronym for Fondasyon Kole Zep˛l, or the "Shoulder-to-Shoulder Foundation," and Zanmi Lasante is a Creole translation of the name of its Boston-based parent organization, Partners in Health (PIH).

"We no longer have to find a way to reach Mirebalais or Cange to deposit our money or see a doctor," said Marie Joseph, a Fonkoze client. Mirebalais, site of the nearest Fonkoze office, and Cange, site of the nearest Zanmi Lasante hospital, are in opposite directions from Boucan Carre, and difficult to reach by car or on foot.

The Boucan Carre bank office is expected to serve 2,500 clients over the next 5 years, providing micro-loans, savings, currency exchange, and money transfers. The hospital, established with the assistance of the Haitian Health Ministry, is expected to register more than 60,000 patients annually.

"I am tired of bringing people on the edge of death from tuberculosis, AIDS, or other diseases to the point where they can become economically active, then watching them suffer because they have no way to make a living," said Paul Farmer, founding director of Zanmi Lasante and subject of the book by Pulitzer Prize-winning author Tracy Kidder, Mountains Beyond Mountains.

Anne Hastings, director of Fonkoze, explains how the same problem works in the other direction.

"Fonkoze has been providing microfinance and educational services for 10 years in all 9 departments of Haiti--however, when our clients are not well, they cannot run their businesses efficiently," Ms. Hastings told "Healthy people are better able to manage a business, and people can stay healthy when they earn enough money to feed themselves and their families."

"In establishing a hospital and a bank in Boucan Carre, we are bringing more than just medicine and money--we are working to break the cycle of poverty," Dr. Farmer added.

Ms. Hastings ties these efforts into global trends.

"Throughout the world, microfinance experts are beginning to understand that if we are to serve the poorest, we must be able to provide more than just microcredit--helping the poorest to make their way out of poverty requires the integration of microfinance, education, and health care services," she points out. "Fonkoze's microfinance activities are similar to other programs worldwide that provide loans to people living below the poverty line using social collateral or a solidarity group methodology."

"This is when members form groups of about five and vouch to help repay the loans of any defaulting members," Ms. Hastings explains.

Fonkoze, as with most other MFIs throughout the world, also targets women: "Right now about 96 percent of our clients are women," Ms. Hastings says.

Solidarity group loans, which begin at about $60 and last for 6 months, and small business loans, which average just over $1,000 and are generally 6- to 12-month terms, both charge 5 percent interest per month. Loans to agricultural cooperatives, which average over $5,000 and act more like lines of credit, charge 2 percent per month.

"While the interest rate may seem high, it is important to remember that if we are committed to sticking around to serve our clients in the long run, we need to be able to cover our costs so we do not go bankrupt," said Sharmi Sobhan, executive director of Fonkoze USA. "Also, our clients have no other options--money lenders charge upwards of 300 percent annually and can even charge 100 percent per month."

Social investors in the US can support Fonkoze while earning a 3 percent return by purchasing investment notes from Fonkoze USA, which lends the proceeds to Fonkoze in Haiti who then onlends the funds to its clients.

"Today, we have about $1 million outstanding here in the US, and we would like to expand this amount," Ms. Sobhan told "To date, Fonkoze has never defaulted on a loan, and Fonkoze USA has always repaid investors both interest and principal in a timely manner."


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