Microloan partnership gets Haiti grant

A $4.5 million grant from The MasterCard Foundation is funding a joint effort of MEDA and its longtime ally, Fonkoze, to spur economic recovery in Haiti.

Fonkoze is Haiti’s largest microfinance organization with 42 branches throughout the country. It provides small business loans and savings accounts, as well as complementary educational and health services, to 225,000 clients, mostly impoverished rural women. MEDA merged its pioneering microfinance work with Fonkoze in 2004.

Fonkoze lost five employees in the January earthquake and a third of its employees were left homeless. Nearly 8,000 clients lost their homes, businesses, or both. The MasterCard grant will enable it to rebuild its destroyed headquarters, restore services to 70,000 clients, and  expand programs in two of the hardest-hit areas.

Fonkoze will also provide enterprise training, a livelihood asset (such as a goat or a chicken), and a small short‑term stipend to 1,000 extremely poor women. Another 4,000 women will qualify for microloans and counseling to create or rebuild small commercial and agricultural endeavors that form the backbone of Haiti’s supply chain, delivering food and goods between rural areas and cities. Restoring the businesses of women traders is critical to the country’s long‑term recovery, say Fonkoze officials.

To supplement this work, Fonkoze is testing a “catastrophic microinsurance” product, which will provide clients indemnity for basic needs, loan repayment and new, interest‑bearing loans to restart their businesses. Officials see this as a way to educate clients and prepare them to protect themselves against future disasters and economic shocks.

MEDA, which continues as a Fonkoze investor and as part of its governance, will manage the funding from The MasterCard Foundation and provide advisory and reporting services.

The MasterCard Foundation, based in Toronto, has a special interest in microfinance and youth education in developing countries. It is the major contributor to MEDA’s YouthInvest program in Morocco and Egypt. – MEDA News Service