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#2068: Small Solutions for Big Problems (fwd)


Small Solutions for Big Problems                                      
 By Chris Chapman  Haitian Times Staff 

PORT-AU-PRINCE  - Haitians  love to spend time discussing why it is that
the country is  in the situation it is in now. It's like a sick horse
lying on the ground, with a crowd of experts, non-experts and curious
onlookers round it, all keen to let everyone know why the horse is sick.
One diagnosis that is heard over and over is that the country does not
produce anything because there is no industry. But take a walk around
Saint Martin, a densely populated area of the capital between lower
Delmas and Poste Marchand, and you get a  different picture. Saint
Martin makes saucepans, charcoal braziers, furniture, candles, clothes
and shoes. Metal workers even make the molds the candle makers use. It
bustles with activity; there is more visible sign of work being done
here than in many an industrial park in the U.S. or Europe, because
almost everyone works in the street. And yet it is one of the poorest
parts of the capital. Like in so many of this city’s 'popular quarters',
relatively sturdy concrete constructions  jostle for space with drafty
huts, their corrugated iron roofs held down  against the wind by broken
chunks of breeze block. Canal Orphelin, 'Orphan Canal', presents the
most shocking sight. An open sewer, a  concrete gash clogged with refuse
and a black liquid running through it.The poverty in Saint Martin
provides the motor which makes it the dynamic, if not economically
thriving place it is. Initiative Developpement  (ID), a French
non-profit organization, saw a chance to harness that  dynamism. It is
using micro-credit to help artisans and retailers strengthen their
businesses. ID works with artisans, the 'machann', or market  women,
those with a really small stock, and women who prepare food to  sell.
The market women and food sellers might take out a first loan of     
about $60.  Artisans, who often need to make larger outlays for
equipment, borrow  up to $500. They pay interest at 3% per month, and
the loan is repayable  over a period of four to five months, says
Jean-Luc Galbrun, who is in  charge of the micro-credit program. "It's a
great risk," Galbrun said. "  Apart from the loan sharks, who demand 25%
interest per month, there are hardly any organizations around who lend
to these people. They  hardly own anything at all, and do not have an ID
card.  Only a subsidized, non-profit organization can do it"           
Galbrun said that ID is partly  financed by the French government. But
the country’s major banks are also beginning to recognize the potential
of micro-credit. Unibank and Sogebank, Haiti's two biggest banks,
have launched programs. "By granting loans to small  enterprises, we are
helping them to develop, said Franck Helmcke, Unibank director in an
interview with the Haitian Press Agency. "However, this service does
come at a cost; micro-enterprises have an enormous business potential."
Unibank's  micro-credit program began in November and has already
granted 300 loans totaling about $200,000. Interest in micro-credit is
growing on a  national and international level. The importance of
small-scale health insurance programs in re-enforcing micro-enterprises
was examined at a conference at the Hotel Montana in  Port-au-Prince
last week. Because they are lent larger amounts, the  artisans must
first show they are serious by saving some money in the ID savings bank.
This is the stage where saucepan maker Alphonse  Franćois finds himself.
"At present, I'm buying waste aluminum, in small  quantities," said
Francois as he stood near a great vat of molten aluminum  in which he
would pour later into molds to make the pans. "I'm busy, I'm  making
saucepans, but if I had a loan of $300, I could buy a wholesale      
block of aluminum, and I could make more pans." Max Celilhorme is a
tailor who has two sewing machines in a small room on Canal Orphelin.
 "My business is working very well. I use the loans to buy thread,
staples, zippers. My nephew works with me, but I might buy another
machine,  then I could take on someone else. " In this way the program
can help to create jobs. "With Celilhorme, we  could either pay for an
apprentice to follow a course, or we could agree a bigger loan, on
condition that he takes on and trains an apprentice", said Galbrun.
Rodley, Junior and Jacques all work for a candle-maker.  Rodley is in
fifth year at school. He is setting up the molds, threading the wicks
before the wax is poured in. "I can do all the work here. I want to
be a candle-maker after school, it's what I know, I don't want to work
in a factory," Rodley said. Jacques is putting the candles into unmarked
 plastic bags. We could talk to the candle-maker about a loan to improve
the packaging, make labels, then he could sell to the supermarkets,"
Galbrun said. "The most dynamic entrepreneurs are able to double their
business capital after just two or three loans", said Galbrun. '"With
the women, you see that if their business is working well, it has an
impact on the  whole family, they are able to send the kids to school,
pay for health  care, and meet nutritional needs." But some borrowers
find it very difficult to repay their loans on time. Their situation is
very unstable.There's a high rate of late repayments. The borrowers
might go into the provinces for two months, because of a death or
illness in the family. The women often have no husband, and have several
children, their little business is their only source of income. They are
more vulnerable and are often victims of theft. The decrease in the
value of the gourde, the Haitian currency, has caused problems too. It
is difficult for them to put their prices up because their customers are
not well-off and the competition is fierce. Nevertheless the debt
recovery rate is a respectable 81.4%. The program tries to be rigorous
about repayment. Fines can be imposed for late payment and each borrower
has to present a guarantor, usually another small businessman. Those who
pay punctually are rewarded by  being offered a bigger second loan. "The
aim is to help them increase and  strengthen their activities. We don't
want them to keep on coming back to us; we try to help them  either
become independent, or grow sufficiently so that they can apply to    
other organizations or banks for a bigger loan", said Galbrun. One of  
those organizations is the Association for Cooperation with          
Micro-Enterprise (ACME). It grants loans of up to GH 15,000 to     
retailers, and GH 30,000 to artisans. 'Our policy is to be autonomous. 
We cover our operating costs. Any profits are ploughed back into the
credit fund', said Wesner Marcelin of ACME. "The problems we face      
have to do with the country's instability. Political problems have an
effect  on entrepreneurs. During a violent demonstration, all of a
retailer's  merchandise might be burnt; that can have an effect on
repayments", Marcelin said.