fonkoze.org | Alleviating poverty throughout Haiti | Microfinance and Development Services for the

36 Pages·2011·2.47 MB·English

FonDASYon koLe zePÒL & SÈVIS FInAnSYe Fonkoze
Fonkoze
2010 Social Performance Report
Keeping Our Clients on the Staircase Out of Poverty
Social Performance in 2010: Driving innovation
2 fonKoZe Social Performance rePort 2010
Fonkoze
2010 Social Performance Report
Keeping Our Clients on the Staircase Out of Poverty
FonDASYon koLe zePÒL & SÈVIS FInAnSYe Fonkoze
Table of Contents
Fonkoze’s Mission and Approach ....................................................................................................................................3
executive Summary ...............................................................................................................................................................4
Fonkoze’s Approach to Social Performance Management ...................................................................................8
Social Performance in 2010: informing adaptation & Driving innovation ..........................................10
earthquake Response and evaluation ..........................................................................................................................11
Designing an appropriate response: Kore Fanmi Fonkoze. .......................................................................11
evaluating Program effectiveness ..........................................................................................................................13
the Smart campaign at fonkoze: Strengthening our client Protection Practices ........................14
Tracking Client Progress Along the Staircase ...........................................................................................................15
incoming clients: reaching Haiti’s Poor ..............................................................................................................16
the first Step: Chemen Lavi Miyò – Pathway to a Better life. ..................................................................17
Step 2: Ti Kredi – little credit ...................................................................................................................................19
Step 3: Solidarity credit. ............................................................................................................................................20
Step 4: Business Development loans ..................................................................................................................22
Complementary Products and Services to Facilitate the Climb .......................................................................24
micro-insurance ..............................................................................................................................................................24
education & literacy Program ................................................................................................................................25
Sante – Health Program ..............................................................................................................................................26
Client Retention: exit Analysis ........................................................................................................................................28
Social Performance in 2011 ................................................................................................................................................31
References ...............................................................................................................................................................................32
Acknowledgements .............................................................................................................................................................32
2 fonKoZe Social Performance rePort 2010
Fonkoze’s Mission and Approach
MISSIon
To build a sustainable microfinance institution to:
k Provide Haiti’s poor with the financial and educational services they need to Fonkoze is a fully
certified user of the
make their way out of poverty;
Grameen Foundation
k Eliminate the kind of poverty that leaves people without hope, motivation, Progress out of
and courage, and; Poverty Index® (PPI®).
Our use of the PPI
k Reverse the decline in Haiti’s economy by empowering and motivating
has been validated in
families to engage in sustainable economic development. all three categories
of certification: basic, advanced and
tracking over time.
APPRoACh – The STAIRCASe ouT oF PoVeRTY
fonkoze’s mission is to build a sustainable microfinance institution to:
k provide Haiti’s poor with the financial and educational tools they
need to make their way out of poverty
k eliminate the kind of poverty that leaves people
without hope, motivation and courage
k reverse the decline in Haiti’s economy by empowering and
motivating families to engage in
BuSIneSS DeVeLoPMenT
sustainable economic development
individual loans,
assistance moving
fonkoze’s Staircase out of Poverty into the formal sector
(shown here) is our innovative sequence
of products and services designed
to meet clients wherever
they are and accompany
them on their journey
out of poverty. SoLIDARITY GRouP solidarity and education
Ti Kredi education, close monitoring and a solidarity group
Chemen Lavi miyò confidence building, enterprise training, asset transfer, health services
fonKoZe Social Performance rePort 2010 3
2010 Results:
earthquake Response
and evaluation
Kore Fanmi Fonkoze
our innovative earthquake re-
sponse tested micro-insurance Executive Summary
as a post-disaster recovery tool.
of the 274 clients fonkoze inter-
viewed for the evaluation:
85 F

% onkoze strives to empower Hai- completed interviews with 1,676 active and
ti’s poor and vulnerable with the former clients as part of routine client moni-
financial and educational tools toring, and held focus groups or one-one-one
suffered damage to or loss of
their home they need to make permanent interviews with over 700 additional clients as
progress in their lives. While we have faced part of special research or evaluation efforts.
64 many difficult years, 2010 was truly a year Overall, data collected this year demonstrate
% of unprecedented challenges. A devastating high levels of satisfaction with Fonkoze’s pro-
lost business earthquake, a cholera outbreak, a tropical grams and services and various post-disaster
assets or investments in the quake storm, and political strife made 2010 a year of initiatives of the year. Data also show that,
seemingly endless hurdles and setbacks for despite the significant challenges of this year,
76
Fonkoze and our clients. interviewed clients demonstrated progress
% Nonetheless, years of commitment to out of poverty and steady improvements in
invested part or
systematically monitoring the progress key socio-economic indicators.
all of their cash grant into their
of our clients, understanding the many
businesses
hurdles they face on their journey out of eARThquAke ReSPonSe AnD
95 poverty, and evaluating the effectiveness of eVALuATIon
our programs, made us uniquely prepared Fonkoze had just evaluated its last disaster
%
to respond to the year’s challenges. As a recovery initiative—Kredi Siklòn (Hurricane
chose to take
out a new loan to grow or re-start result, 2010 was marked by innovative pi- Loan)—and was incorporating lessons
their businesses lots as well as substantial enhancements to learned to develop a natural disaster insur-
our financial and non-financial services, all ance product when the earthquake hit.
97
with an eye to help our clients build their Convinced that the time was ripe to test
% resilience and keep them steadily progress- micro-insurance as a tool to help clients re-
repaid their ing up the Staircase out of Poverty. cover following disasters, Fonkoze rolled out
new loans in full which surpasses
The Fonkoze 2010 Social Performance Kore Fanmi Fonkoze (Haitian Creole for “Pro-
even pre-earthquake levels
Report highlights how our approach to gram to Reinforce the Fonkoze Family”)—a
monitoring and managing our social perfor- recovery program that treated clients as
86
mance enabled us to respond quickly, respon- if they had already been paying for micro-
%
sibly, and effectively following the crises of insurance when the earthquake hit.
declared they
the year. The report also shares key outcomes Through Kore Fanmi Fonkoze, we provided
were completely satisfied
with the program and had no and results of 2010, as measured by Fonkoze’s 19,811 earthquake victims—clients who lost
suggestions for improvement Social Performance Monitoring and Mar- their homes, businesses or both—with the
ket Research (Social Impact) department. same benefits package they would receive
This year, Social Impact’s cadre of field staff with the insurance plan under development:
4 fonKoZe Social Performance rePort 2010
eXecUtive SUmmarY
2010 Results:
Incoming Clients
a large majority of incoming
clients sampled were living on
less than $2/day
“I’m satisfied because insurance product. We used client feedback
to finalize the design of our natural disaster
Fonkoze is the only New CLM
insurance product that was launched in
New TI Kredi
organization in early 2011. We will re-interview the same New Solidarity
New CLM
274 clients in 2011 to evaluate their progress
Haiti that does this New TI Kredi
toward rebuilding their lives after one year. % living New Solidarity 98%
for its members. The sidebar on page four highlights some re- below 85%
$2/day
I feel really proud sults from the Kore Fanmi Fonkoze evaluation. % living 71% 98%
below 85%
when I share that
TRACkInG PRoGReSS ALonG $2/day
71%
Food Insecurity was prominent
news with others.” The STAIRCASe
acr%os ws haoll pr0o%grams
The first three programs on our Staircase
are food
— Solidarity client, leyogan 4%
out of Poverty—Chemen Lavi Miyò (CLM), secure
% wh2o3%0%
Ti Kredi (Little Credit), and Solidarity—all
are food
k A one-time cash grant of 5,000 HTG grew in 2010. secure 4%
23%
(US$125) to assist with emergency needs
k Cancellation of any pre-earthquake Incoming Clients: Reaching
loan balance haiti’s Poor
k A new loan to restart their business if Social Impact collected data on 854 incom- 2010 Results:
they were ready and willing to pay a ret- ing clients—75 CLM, 172 Ti Kredi, and 607
Chemen Lavi miyò
roactive fee of 2% of their loan value (to Solidarity. These data confirmed that we are
(CLm)
communicate there is a cost associated reaching Haiti’s poor, and effectively target-
with insurance) ing different categories of clients, each with final evaluation of the pilot
distinct characteristics and needs. revealed participants sustained
Despite enormous pressure to respond Incoming CLM clients are consistently remarkable improvements six
months after graduation
quickly, we took the time to weave client the poorest with 98% living on less than $2/
protection principles into our earthquake day, 100% living in food insecurity with hun-
Baseline (2007) Baseline (2007)
response, most notably by developing ger, and low scores in all the other key indica-
24-Month (2009) 24-Month (2009)
a new evaluation tool and accompany- tors of poverty tracked. Ti Kredi clients fell Large 5% Large 5%
animal animal
ing guide for credit agents to assess client in between their counterparts in CLM and ownership 39% ownership 39%
readiness for a new loan in the post-disaster Solidarity. However, while incoming Solidar-
All or most All or most
environment—a time when microfinance ity clients were much less likely than CLM 27% 27%
children children
clients are particularly vulnerable to over- and Ti Kredi clients to be living under $2/day, in school 70% in school 70%
indebtedness. This tool and guide were 77% of them were suffering from some sort
Food 1% Food 1%
recognized as model tools for avoiding client of food insecurity, demonstrating that even
secure 25% secure 25%
over-indebtedness by the Smart Campaign, a clients eligible to start on the 3rd step of the
global effort to promote strong client protec- staircase face significant challenges meeting
tion practices in microfinance. the daily needs of their families (see right). the first clm class since the
As part of the evaluation, Social Impact pilot finished in December 2010
interviewed 274 earthquake victims in four The First Step: Chemen Lavi miyò with a graduation rate of
96
of the worst-affected branches to collect (CLm) – Pathway to a Better Life
%
baseline loan, poverty level and food security Chemen Lavi Miyò (CLM) is Fonkoze’s
data, as well as capture general feedback on 18-month, non-credit livelihoods promo-
the program and interest in a permanent tion program for ultra-poor families. This
fonKoZe Social Performance rePort 2010 5
eXecUtive SUmmarY
2010 Results:
Ti kredi New CLM
(Little Credit) New TI Kredi
New Solidarity
40% of Ti Kredi program scaled up significantly as part o9f0 % clients in 11 different branches as part of
Baseline cmlioevnetds ionu ot uorf stahmisp le Fonkoze$’s1 p/Dosaty-earthquake strateg7y0, %to ac- routine client monitoring.
6 months later highly vulnerable commodate families made po5o5r%er and more This year Social Impact interviewed its
(after graduation) category
vulnerable by the quake. Focused on the Cen- largest sample ever of clients who have been
98%
Food Insecure 86% tral Plateau region of Haiti, CLM added 1,234 with Fonkoze for two years or more. Analy-
$2/Day 85%
with Hunger 46% families in 2010 (up from 250 in 2009). ses of these data show a consistent pattern of
71%
% living 69% The final independent evaluation results steady, incremental improvements for client
below $1/day 66% of the CLM pilot also came in this year and groups over the years, suggesting a general
33%
% living 85% revealed that program participants sustained trend of improvement in our clients’ lives
Tin Roof
below $2/day 82% remarkoarb blee titmerprovements even six mon9th1%s while with Fonkoze.
95%
after graduation (see page 5). Progress after one year. Of the 198
3% of the sample moved above
the $1/day and $2/day poverty In December, th5e% program celebrated clients re-interviewed after one year with
lines, progress comparable to Cement
that of Solidarity clients after an importafnloto mrilestone: th4e5 %first CLM class Fonkoze, we saw significant improvements
two-three years with Fonkoze since the pilot completed the pr6o2g%ram with a in food security and the percentage of clients
96% graduation rate. sending all their kids to school (see left).
7%
Sanitary Progress after two years. This year
toilet 35%
Step 2: Ti Kredi - Little Credit we re-interviewed 205 clients in eight dif-
2010 Results: 64%
Ti Kredi (Litte Credit), Fonkoze’s six-month ferent branches who advanced to Cycle E,
Solidarity Credit 20%
introductory micro-credit program for the 5th loan cycle in the Solidarity program,
All kids go
51%
new etnot rsecphroeonleurs, also grew signifi- which takes approximately two years.
74%
14% of Solidarity clients cantly this year in the wake o1f4 t%h eo qf uSoalkidea. rity clieTnhtsree percent of this cohort moved above
in our sample became 4,845 cliKennotsw wsen2t 1t%hrough thien poruor gsraammpl e becambeo th the $1/day and $2/day lines, and 17%
food secure after one year how to food secure after one year
this yearr—ea8d5 &% more t3h6a%n 2009—with a moved into food security since starting with
food 22% graduationw rriatete of 91%.2 2%56% Fonkoze two years ago. In addition, they
Food Secure
secure 36% While dramatic changes3 in6 %poverty levels made progress in all of the key socio-eco-
16%
are usuallOy wdinffiscult to see over a six month nomic indicators that we track.
inc hsicldhroeonl 66%82% peCrihoildd, rdeaantssa mis ncea otslsllclehcoteodl by3 S7o%cia5l5 I%mpact 6in6 %82% Progress after three years. 2010 is
2010 are showing noticeable improvements the first year we had enough clients in the
16% more Solidarity clients 0%16% more Solidarity clients
were sending all their chilrden in povertyF loevoedls wanerde f soeondd sinegcu arlilt tyh aesir w chelillr adse n sample to enable us to begin looking at the
to school after one year powerfuSl teecsutirmeoni4e%s otfo l isfceh-cohoal nagftienrg o tnraen yse-ar results after three years with Fonkoze. Of
23%
formation in this short perCiyocdle. SAo (c2i0al0 I9m) pact the 30 clients in this group, an estimated 3%
Cycle A (2009)
analyzed data on 84 Ti KreCdyi ccllei eCn (t2s0 f1r0o)m five
Cycle C (2010) Despite significant
branches, showing that 3% moved above
setbacks this
both the $1/day and $2/day poverty lines.
clients interviewed in 2010
Moreover, the percentage of clients classified year, clients in
after spending two years
as “Food Insecure with Hunger” decreased
and three years in Solidarity
all cohorts did in
demonstrated steady, from 86% to 46% after six months, a truly
incremental improvements in remarkable result (see results, left). fact demonstrate
all poverty indicators we track
improved food
Step 3: Solidarity Credit
Solidarity Credit, our primary lending pro- security and progress
gram, ended 2010 with 47,524 borrowers—
out of poverty.
a 15% increase over 2009. In 2010, Social
Impact interviewed 1,041 active Solidarity — 2010 Solidarity reSultS
6 fonKoZe Social Performance rePort 2010
eXecUtive SUmmarY
2010 Results:
Complementary
Products and
Services
moved above the $1/day line and 2% moved distribute at their centers. In 2011 Health
Disaster preparedness
above the $2/day line since they started. will continue to explore ways to build on education pilot participants
While the size of this group is relatively Fonkoze’s network of centers to provide reported sharing what they
small, the patterns we see in their progress clients with access to essential health learned with at least three other
people suggesting nearly
out of poverty—incremental improvements information and products.
1,600
in food security, housing conditions, child
education access, asset ownership—are con- CLIenT ReTenTIon: exIT AnALYSIS
sistent with what we are seeing with clients Fonkoze finished the year with a retention
were reached
after one and two years with Fonkoze. rate of 86%--a remarkable achievement
considering the obstacles of the year. Social
CoMPLeMenTARY PRoDuCTS Impact interviewed 311 exiting clients in
AnD SeRVICeS 2010—265 as part of routine monitoring Client Retention:
In 2010, our Micro-insurance, Education, and and 46 through a special study. The top exit Analysis
Health programs each played a central role reasons for exit in 2010 were consistent with
fonkoze finished 2010
in Fonkoze’s response to one or more of the those named in 2008 and 2009 (see right). A
with a retention rate of
year’s major challenges. Fonkoze drew on the majority of exiting clients interviewed (59%) 86
expertise of these programs to respond to the had no criticisms of the program. For those %
urgent needs of our clients, while laying the who did have a complaint, 31% expressed
groundwork for longer-term solutions. dissatisfaction with their loan terms, such — a remarkable achievement
k Micro-insurance – Fonkoze piloted a as the loan size being too small, repayment considering the obstacles
natural disaster micro-insurance product periods too short, and interest rates too high. of the year
as its earthquake recovery program. However, 87% of all exit clients still said
Lessons learned from the program fed their loan with Fonkoze “helped my family a the top reasons clients
directly into the design of our permanent lot,” or “somewhat,” and 85% said that they reported leaving Fonkoze in
product launched on the one year an- would recommend Fonkoze to a friend. 2010 were consistent with
findings in 2009 and 2008:
niversary of the quake.
k education and Literacy – Shortly after SoCIAL PeRFoRMAnCe In 2011 16
%
the quake, our Education department The outcomes of 2010 were a powerful tes-
unable to sell her
developed new disaster preparedness tament to the merits of social performance
goods in the market
education sessions and piloted them in management, and the indispensible role
15
Leyogàn. Due to overwhelmingly positive of the Social Impact team at Fonkoze.
%
client feedback the disaster preparedness We will build on the accomplishments
healthcare
sessions were integrated into a larger and lessons of 2010 to make the essential emergency or death in the family
booklet that will be rolled out to all of products and services that reinforce our
15
Fonkoze’s 1,800 Solidarity centers in 2011. clients’ resilience, and help keep them on %
k health – Our Health program moved the staircase, a permanently reality. Ad- Problems with her
swiftly to respond to a fast-spreading ditionally, a heightened focus on building solidarity group
cholera outbreak. A team of 21 Fonkoze world-class client protection practices
staff were trained in essential cholera will continue to be dominant throughout 85
prevention and treatment techniques. 2011. Striving to achieve the highest stan- %
They then disbursed throughout the dards of social performance management
of exiting
country to train all staff and nearly 1,800 and client protection is more than just one clients interviewed said they would
center chiefs in cholera prevention, and of Fonkoze’s top priorities—we are embed- recommend Fonkoze to a friend
•
provide them with essential supplies to ding it in everything we do.
fonKoZe Social Performance rePort 2010 7
S
ince 1994, Fonkoze has worked
to build a bank on which Haiti’s
poor can rely, long into the future.
In serving Haiti’s poor we have
learned the journey out of poverty is riddled
with endless hurdles and setbacks in a coun-
try where the risks are many and the protec-
tions are few. Resolute in our mission, we
have grown to be Haiti’s largest microfinance
institution. We ended 2010 with 840 em-
ployees working out of 43 locations, serving
234,312 savers, and 50,533 borrowers, 99% of
whom are women micro-entrepreneurs. Our
branch network extends into the most rural
and isolated communities of the country,
providing our clients with a range of financial
and educational services to accompany them
as they make their way out of poverty.
As an institution with both financial and
social goals, we believe in managing our
performance to a double bottom line—
financial and social. Financial indicators tell
us only half the story of client progress. For
example, it may seem as though a client’s
situation is improving if her loan size is
increasing, she has zero delinquency, and
she is purchasing more merchandise. But
tracking social indicators may reveal that
her financial “progress” is a result of taking
her kids out of school, borrowing from a lo-
cal moneylender, and selling her productive
assets, which are all contrary to our mission.
Evaluating her progress through a social
performance lens reveals other essential
insights, such as her ability to put food on
the table and invest in important home
FFoonnkkoozzee’’ss AApppprrooaacchh
improvements like a sturdy roof or latrine,
her satisfaction with how Fonkoze staff and
ttoo SSoocciiaall PPeerrffoorrmmaannccee
fellow members treat her, and her feeling
of confidence about the future. Looking at
MMaannaaggeemmeenntt social indicators, alongside financial ones,
allows us to capture the full picture of client
progress and helps us understand how we
might better support our clients.
8 fonKoZe Social Performance rePort 2010