Social Performance Indicators Blog

Support Haiti through Microfinance

Posted by: Katherine Oglietti

Following the earthquake in Haiti, we featured guest posts from Sogesol and Fonkoze affiliates because we were able to make rapid contact with them, yet these MFIs are not the only ones who need support. It is necessary to emphasize that each of the microfinance institutions in Haiti and their clients have suffered greatly as a result of this catastrophe, and each will have much rebuilding to do. They have born losses of staff members and damages to their institutions. They are struggling to overcome these heavy blows to their organizations while redoubling their efforts to provide desperately needed loans and financial services to their clients. 

Photos by Leigh Carter, Fonkoze USA

As the rubble is cleared and the dust settles, microfinance will become an essential component of the rebuilding process, helping microentrepreneurs get back on their feet. MFIs have the capacity to offer loans for rebuilding homes and businesses; the ability to offer such financing will be contingent upon a large increase in funding. Please consider channeling your support for Haiti’s continual and sustainable development through one or more of these microfinance institutions who have been working to support Haitian microentrepreneurs and families for many years. 

MIX Market has information on six microfinance institutions from Haiti. Please find below the information that we could find on each of these organizations, as well as how to contribute to their funds for relief efforts.

Worse than a War Zone: Sogesol Assesses the Damage in Haiti

Guest post by: Melissa Lumpkin, ACCION International

 

Melissa Lumpkin is a member of ACCION’s Africa & Haiti Global Programs team.  Based in Washington DC, she is the project manager and board representative for ACCION’s partner in Haiti, Sogesol.  She can be reached at mlumpkin@accion.org.

Anyone who has experience living, traveling or working in Haiti will tell you that life for most Haitians is tough – and this on a good day.  The impact of last week’s earthquake has been catastrophic and the country will face immense challenges in rebuilding.

For the past decade, ACCION has worked with Sogesol, the microfinance arm of Haiti’s largest bank, to bring microfinance services and hope for a better future to Haiti’s self-employed poor. Over the past week, we’ve remained in close communication with the President and Directeur Général of Sogesol. The DG confirmed that she, along with several staff and ACCION’s resident advisor, were at the Sogesol headquarters in Petion-Ville when the earthquake hit. Fortunately, they were able to get out of the building and safely home. Yet, a disaster of this magnitude leaves no one untouched – all have lost many close friends and witnessed widespread destruction. Our own resident advisor wrote, “Melissa, the conditions here in Haiti are unimaginable. Please… whatever ACCION can do to help.  It is worse than a war zone.”   

MFIs Respond to Disaster: Fonkoze in Haiti

Posted by: Leah Nedderman

Leah Nedderman is a microfinance consultant based in Washington, DC and former Director of Social Performance Management for Fonkoze.  She can be reached at Lnedderm@gmail.com.

As a former Fonkoze employee and resident of Port-au-Prince, I have a sense for the catastrophe that has occurred, and the challenges that lie ahead for Fonkoze and other institutions who serve the poor of Haiti. 

This afternoon, I spoke with Fonkoze employee Natalie Domond, where she called from a friend’s home in Port-au-Prince. She and the other Fonkoze staff safely exited the central office in Port-au-Prince on Tuesday. Outside, dust and screams filled the air. She recounted gruesome scenes at every turn.

Institutions like Fonkoze, who exist to provide services to the poor, will require support now more than ever.  Just fifteen months ago, Haiti was hit by several powerful tropical storms and a hurricane. Fonkoze responded by mobilizing leaders in forty communities throughout the country to assess the damage, account for members, and generate information for relief agencies. Almost immediately, Fonkoze was able to offer new financial products to affected families so that they could get their micro-businesses up and running again, re-stock their goods, and begin recovering their livelihoods. I am confident their response to the current crisis will be just as resolute.

The name Fonkoze stands for “Shoulder to Shoulder Foundation” in Haitian Creole. It reflects the commitment of the institution and its staff to standing in solidarity with the Haitian poor. This commitment comes from loan officers who work with rural women to establish small businesses in a despondent economy, in the dogged determination of literacy trainers who travel sweaty miles to hold classes for illiterate members, and in the steely resolve of the members who toil year after year to provide food and schooling for their children.

Today, Natalie remarked that this incredible event is a defining moment for the international community. She believes that with assistance, Fonkoze will recover, and will be a leader in the recuperation of the country. 

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You can help Fonkoze by making a donation to the Fonkoze USA “Earthquake Relief and Rehabilitation Fund” today. To follow Fonkoze earthquake news and updates click here.

Social Responsibility to the Community: Improving Workplace Safety in Egypt

Posted by: Richard Carothers, PPIC-Work project and President of Partners in Technology Exchange Ltd.

Even items in a small family-owned restaurant can cause significant injuries, especially to young workers

In a previous post, “Defining Social Responsibility to the Community: Occupational Safety and Health,” guest contributor Dr. Richard Rinehart outlined some of the ways in which hazards might present themselves in businesses supported by microloans. In this post, guest contributor Richard Carothers explores an example of how an MFI can assist in improving workplace safety.

The PPIC-Work project, working with the Egyptian Association for Community Initiatives and Development (EACID), has begun to develop a pragmatic approach for improving workplace safety that can be incorporated into routine visits by loan officers. Dual purpose loans provide the basic support for the business as well as additional funds to cover the costs of improving workplace safety.

Policies and Priorities on Social Responsibility to the Community: Determining Factors?

Posted by: Taea Calcut

In our last post, we discussed some of the ways in which MFIs demonstrate and prioritize social responsibility to the communities where they work. Today, we ask what exogenous factors might determine the likelihood that MFIs have formal social responsibility to the community (SRC) policies.

MIX Social Performance Report data on SRC policies remains limited at this time, given the small sample size of self-reporting MFIs.  However, we can explore correlations between MFIs' SRC policies and world region, working environment (i.e., rural, semi-urban, and urban), and regulatory status on preliminary basis.

So, what does the preliminary data reveal?

Table 1: MFIs with Written SRC Policies by World Region (n=133)

 
For the purposes of our review, we have defined MFIs having an SRC policy as those with written policies, rather than informal policies or policies under development. In Table 1, we find that the data  reveals little variation between MFIs with SRC policies by region at this time. (When “policy” is expanded to include written and informal policies, each region reports a majority of MFIs with SRC policies, yet the variations between regions remains similarly small.) 

Policies and Priorities on Social Responsibility to the Community

Posted by: Katherine Oglietti

An MFI can have a relevant impact in the community where it operates not only through the provision of financial services to its clients but also through the implementation of policies and actions aimed to support community development at large. The social performance indicator on social responsibility to community assesses the steps that an MFI takes in this direction. Of the 133 MFIs who reported on social performance to MIX, we find that the majority of MFIs demonstrate concern for their community-level social impact through their formal and informal policies. 

Graph 1: Current Types of Policies on Social Responsibility to the Community, in a sample of 133 MFIs

A combined 74% of MFIs have written or informal policies regarding social responsibility to the community. While only 26% of MFIs have a written policy, an additional 8% of MFIs that have no current policies are in the process of adopting written policies. This leaves only 11% of MFIs who reported on the indicator who do not have policies regarding social responsibility to the community. This data seems to show that the majority of MFIs who reported to MIX value the social impact that they have on the entire community, beyond the impact they have on their clients through offering financial services. 

Innovatives approaches to the socio-economic development of communities: Fundación Paraguaya

Posted by: Micol Pistelli

 

Interview with: Martin Burt, Executive Director of Fundación Paraguaya

Founded in 1985, Fundación Paraguaya (FP) is a leading social enterprise that develops innovative solutions to poverty and unemployment in Paraguay and proactively disseminates them around the world. All FP programs promote economic self-reliance through entrepreneurship, and in keeping with this philosophy, FP itself is financially self-sustaining.  In this interview with MIX, the Executive Director of FP, Martin Burt, tells us about his institution’s approach of fighting against poverty in Paraguay by using microcredit and social capital formation as tools for development.

MIX: Mr. Burt, Fundación Paraguaya has developed a multidimensional approach that aims at promoting economic self-reliance through entrepreneurship. Can you give us an overview of these strategies?

Mr. Burt: Fundación Paraguaya runs four programs:

i. a microcredit program which began in 1985, which has 20 offices and serves over 37,000 clients in urban and rural areas throughout Paraguay 

ii. an economic and financial education program (Junior Achievement) which has trained over 150,000 youth since 1995 and, since 2005, 20,000 low-income women

Defining Social Responsibility to the Community: Occupational Safety and Health

Posted by: Dr. Richard Rinehart, Certified Industrial Hygienist

Policies and activities that demonstrate microfinance institutions' social responsibility to the community can take many forms. In this guest post, Dr. Richard Rinehart -- a Certified Industrial Hygienist based in Egypt who has worked for the US National Institute for Occupational Safety and Health, the International Labor Organization, and the International Finance Corporation among other organizations -- presents examples of occupational safety and health threats commonly faced by microentrepreneurs in the developing world. What role, he asks, might the microfinance industry play in mitigating the negative impact of these risks on clients and the community at large?

Consider the following scenarios:

(1) A microfinance institution (MFI) client who owns a small grocery shop used a loan to buy a locally made coconut grinder that consists of a powerful electric motor with a mango-size bit that spins very fast. The machine efficiently removes coconut meat from half-shells. Her daughter, who used the machine daily, badly cut her hand because it slipped off a coconut shell and there were no safety guards to protect her from the fast moving part.

Beyond Clients and Staff: Microfinance Institutions' Social Responsibility to the Community

Posted by: Taea Calcut

An MFI can have a relevant impact in the community where it operates not only through the provision of financial services to its clients but also through the implementation of policies and actions aimed to support community development at large. Over the next two weeks, the Social Performance Indicators Blog will examine the ways in which MFIs have demonstrated their social responsibility to the community (SRC), highlighting social performance data reported by MFIs to MIX as well as interviews with leading SRC proponents.