13327: Fonkoze e-newsletter #17 - Building Economic Democracy in Haiti (fwd)

[Bob Corbett <corbetre@webster.edu>]

From: Fonkoze News <fonkozenews@yahoo.com>

Greetings from Fonkoze, Haiti's Alternative Bank for
the Organized Poor. We seek to build the economic
foundations for democracy in Haiti by offering
essential financial and educational services to
Haiti's organized poor. Our particular focus is
providing these services to women and rural citizens.

In this e-newsletter, please find an article entitled:

CURRENCY EXCHANGE SERVICES HIGHLY VALUED BY FONKOZE
CLIENTS

This article will discuss Fonkoze's currency exchange
service, its growth, and its value to Fonkoze clients.

To subscribe or unsubscribe to this newsletter, please
click the subscribe link on our website:
http://www.fonkoze.org

If you would like to learn how you can support
Fonkoze, to join our postal mailing list, or to
receive other information, please contact:

Fonkoze USA
PO Box 53144
Washington, DC  20009
(202) 667-1277
fonkozeusa@cs.com
______________________________________

CURRENCY EXCHANGE SERVICES HIGHLY VALUED BY FONKOZE
CLIENTS

Fonkoze is best known for its credit with education
program, which provides micro-credit loans to nearly
10,000 of Haiti's poor, coupled with a Literacy &
Business Skills Training Program. The prior
e-newsletter discussed how Fonkoze protects the
savings of its 25,000 depositors by holding the funds
on reserve in Haiti and the U.S.

However, Fonkoze's currency exchange service is having
a great impact on poor communities, as well. In the
first six months of the year 2002, Fonkoze changed
US$9.9 million into Haitian Gourdes for its clients.
This service has been growing rapidly. The amount
changed in the first half of 2002 was larger than the
amount changed in the entire year 2000.

Fonkoze's currency exchange service provides two
important benefits to Haiti's poor. First, Fonkoze
seeks to offer a highly competitive exchange rate,
slightly better than what poor clients could get in a
commercial bank. Further, many clients are intimidated
by commercial banks, and so would be changing their
money on the street were it not for Fonkoze.

In addition to providing clients with a much more
positive banking experience, Fonkoze helps people
become comfortable conducting transactions in a
banking environment. Banks provide important services
to an economy, by mobilizing savings and transforming
that into investment capital for economic growth. So,
it is essential for Haiti's development that banks be
reliable, and that the majority of Haiti's population
becomes comfortable using them.

Perhaps the most significant benefit of Fonkoze's
service is that it is offered in communities where
other reliable financial institutions do not venture.
For example, Fonkoze's branch on Lagonav has the
largest currency exchange volume of any of its
branches. That is because Fonkoze is serving a market
that other financial institutions did not view as
serviceable. Before Fonkoze, residents of Lagonav had
to make a dangerous trip to Port-au-Prince with cash
in hand in order to change money.

Fonkoze's currency exchange service also integrates
with its remittances program. Other transfer agents
often provide unfavorable exchange rates as a way of
making profit on top of charging a fee of 10 - 12% of
the amount being transferred. Fonkoze, on the other
hand, provides highly competitive exchange rates to
accompany its low $10 flat fee regardless of the
amount being transferred.

For Fonkoze, the currency exchange service provides an
essential revenue stream. Fonkoze amasses the US
Dollars it has changed from all over the country, and
then negotiates a preferred rate at one of the banks
in Haiti. That allows Fonkoze to make a small return
while still offering a favorable rate to its clients.
And, Fonkoze gives the poor person with only US$ 5 the
same exchange rate that it gives the individual with
US$ 50,000. In the year 2001, net foreign exchange
gain represented 19% of Fonkoze's total income.

Together with credit with education, remittance
services, savings programs, and business development,
currency exchange is a highly valued service Fonkoze
uniquely offers to poor communities.





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