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Haiti: Fonkoze Insuring the Future of Clients

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12-01-2012

Two years have passed since a devastating earthquake ripped through Haiti, taking with it 316,000 lives and displacing at least one million people. Most of the capital of Port-au-Prince was destroyed and today, 80% of Haitian’s live below the poverty line.

Oikocredit’s Haitian microfinance partner Fonkoze Financial Services lost five members of its staff along with its headquarters during the devastating 2010 earthquake. It is the country’s only microcredit bank focused on rural finance by providing clients with access to loans, savings products, remittance services and technical training. Today, the organization has 55,000 borrowers who have microloans to work towards a life free of poverty.

Over the past decade, Haiti has been no stranger to natural disasters, with massive floods and back to back hurricanes. It was clear to Fonkoze chief executive Anne Hastings that borrowers needed insurance to keep climbing the ‘Staircase out of Poverty’.

“I really became committed early on that we couldn't help our clients continue to build their assets if we didn't have a way to help them protect their assets,” Ms Hastings said.

Fonkoze began to work with a local insurance agency after the series of hurricanes in 2008. After two years of development a micro-insurance product was ready to be rolled out.

“We were prepared to offer it in January 2010. But then we had the earthquake.”

With its insurance programme destroyed before its debut, Fonkoze chose to use its donor funds to keep the idea afloat. An insurance pilot project was set up to imitate insurance coverage.

“We made the payout to the clients, and taught them what the insurance product was along the way,” she said. “When they got new loans, we made them pay a fee of 2% of their loan value as a retro-active premium against the insurance.”

Almost 18,500 Haitians received assistance to rebuild their businesses and their lives. It was when the local insurer pulled out of the partnership that Fonkoze was approached by one of the largest re-insurers in the world, Swiss Re. Together, they developed Catastrophe Insurance which was introduced as a mandatory product to its clients with a 3% fee.

“There was a bit of complaining and some people said, 'we don't need it in this part of the country',” Ms Hastings said. “Then in early June, Haiti had horrific rains in the southern part of the country and the immediate payout, in less than two weeks, was over a million dollars.”

“Today, all of our clients have catastrophe micro insurance as a way to protect them from making their way up the staircase then falling all the way back down because of a hurricane or an earthquake.”

In addition to its Catastrophe Insurance, Fonkoze offers tailored products, aimed at a wide range of clients. Fonkoze’s famous, ‘Staircase out of Poverty’ plan takes individuals, families and groups step-by-step, towards a life free of poverty.

Today, Fonkoze has 46 branches throughout the country, with 250,000 savers and more than 55,000 microloan clients. Ten of Fonkoze's branches were repaired or replaced after the 2010 earthquake, and more than 145 Fonkoze staff lost their homes, taking shelter in tents. Despite these challenges, Fonkoze staff members continue to work tirelessly to help their clients and to work for long-term recovery.

For more information on supporting Fonkoze, visit www.fonkoze.org

 

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