Belwòch seems to bear its name like a joke, one in pretty poor taste. The name means “beautiful rock.” Until last year, Belwòch was a populous and fertile area along the river that separates Marigo from Peredo, its neighbor to the east. But when the hurricanes came, flood waters swept down the river towards the see. They carried rock upon rock with along with them, destroying everything in their path. They destroyed houses, uprooted even large trees, and washed away topsoil. Today, Belwòch is a field of large, white boulders. The topsoil, the trees, and the houses are, for the most part, gone.

But there are still people who live and try to make their living in Belwòch. And a handful of them belong to a Fonkoze credit center. It’s one of our oldest and most frustrating centers. It was established long before the office in Marigo was opened. Credit agents from Jacmel recruited its members.

Belwòch was never a large center. Jacmel chose to serve the area by opening a cluster of small centers rather than one central one. But Belwòch had five solidarity groups of five women each taking out new loans every six months, and they flourished.

But the repayment problems that started when global food prices began to spiral upward in the year leading up to the hurricanes became that much worse when the storms eliminated businesses and homes. Though Fonkoze offered interest-free loans to help its members rebuild their livelihoods, these loans were not enough for some women whose customers no longer had money to spend or whose families were facing health problems that drained the capital from their businesses. And these are just examples of the many kinds of problems our borrowers face.

So we’ve written off several Belwòch members, and lost some through simple attrition. Many of those who remain are having a hard time. They aren’t good about making their repayments, nor about attending their regular meetings. The center chief, the woman whom members have elected to approve their loans and facilitate their relationship with Fonkoze, is herself very delinquent in her repayments, and even though she recognizes that this makes it hard for her to speak seriously to delinquent members of her center, she just hasn’t been able to straighten herself out.

So when I attended their meeting a couple of weeks ago, I made a simple suggestion: We would just close the center. Women who are functioning well with their loans could join nearby centers. We would continue to follow-up with the others on an individual basis, helping them as best we can. I said I would return in two weeks so that we could discuss my proposition, and asked the handful of women who were present to encourage the others to be sure to be there for that disussion.

I had expected the meeting two weeks later to be a planning session. We would sit with each woman, and help her decide whether she really wanted to continue with credit and then help those who did choose a new center they could conveniently join. I had taken the center’s closing for written. I could not have been more wrong. The women made speech after speech insisting that no one was closing their credit center but them. They would not move to another center.

I was particularly struck by what Adeze had to say. She’s been a very reliable borrower. Her repayments have consistently been on time. She lives in downtown Marigo and pays car fare to attend her meeting twice each month in Belwòch. We have a center less than a block from her home, so I felt certain she’d be pleased to have the chance to pull out of a struggling center and join a more robust and convenient one. But it was not at all the case. She was willing to get her loans in another center if we had insisted, but her preference was to continue to go to the center that’s been hers.

The women feel ownership over the center, and though that hasn’t yet meant that they’ve worked together to solve their problems, it is a start. They agreed that, at their next meeting, they would work with their credit agent to create a calendar for home visits to all the members who owe money but don’t come to meetings. One or two of them would accompany the credit agent to each home. They would use the process to collect outstanding debt, but also to sift through the center’s membership to identify the core of women who are really committed to making it work. With that core, they would seek to make a new beginning.

We won’t know whether they are really able to make a go of it for a couple of months. I told them I would track October and November meeting attendance closely. I’ll also be looking for the results of their homes visits. But if we can help them make this center work, it would give us one more nearby post as an anchor for our programs as we seek to reestablish this office on truly solid ground.

The experiment with Yvette has me thinking that there is much more I could do by using the rules that Fonkoze loans follow to minimize our borrowers’ debt. Yvette is the woman whose interest-bearing loan I rewrote, retroactively, as the interest-free loan she was entitled to. Between that change, and a reimbursement I made for her out of her own savings, we cut her debt to a level she felt she could repay. She lost her sense of hopelessness, the feeling of shame that had brought her and her husband to tears before me. She has now been making repayments for two months, and is in good shape to eliminate her debt about a month ahead of schedule. (See: Working Out Problems.)

But Yvette is just one of many Marigo borrowers who are in trouble. Last week I spoke with Josiane, and am now working out what I can do for her.

Josiane is a long-time member of Fonkoze. She had joined before the Marigo office opened, when credit agents from Jacmel were beginning to serve the area. Her success as a borrower and a businesswoman eventually led her fellow center members to elect her to be their chief. It’s an important position. It means, among other things, that she signs their requests for loans, and this includes approving the amount they ask for.

Her own credit has grown consistently since join joined. She had been borrowing around 30,000 gourds, or about $730, which put her just a step away from graduating out of solidarity-group into a larger individual loan.

Then came the hurricanes. Floodwaters swept away her entire business and her home. Hurricane-force winds destroyed two gardens with something like 200 plantain trees in them, a harvest probably worth more than 20,000 gourds. A year later, she is living in the backroom of a frame that was rebuilt with raw lumber on her mother’s old foundation. The frame is covered by a combination of corrugated tin roofing material and fabric.

She doesn’t have a business now. Though her hurricane credit helped her get it started again after the storms washed it away, the reduced sales that all of our hurricane-affected borrowers have been struggling with held her back. Then one of her children got sick enough to require hospitalization. The costs of medical care had to come right out of her assets, eating up her business to the point that, though she regularly comes to and leads her center meetings, she hasn’t even tried to make a repayment in months.

Except once: Back in March she pulled together about 4500 gourds. Not much compared with her debt, but a lot of money for someone living as she now lives to have saved up. She brought them to her credit agent as a partial payment, but he, remarkably, refused to accept the money. He said it was too little. She pressed him to take it, saying that it would be hard for her to keep from spending it if he didn’t take it from her hands, but he was steadfast.

He no longer works for Fonkoze, but the damage had been done. She was left discouraged, with mounting debt. The 4500 gourds disappeared into the household that she still has to manage.

Josiane’s debt is a terrible problem for her, but it’s a problem for Fonkoze as well, a larger problem than the over 25,000 gourds she owed when I first saw her file. As the center chief, she is supposed to serve as a model for her fellow borrowers and, unfortunately, she seems to be succeeding. As months have passed without her making a repayment, other borrowers in her center have followed suit. We hear of their saying things like, “If Josiane doesn’t have to pay, then . . .”

For an institution like Fonkoze, that has nothing to depend on but moral suasion and a woman’s desire to preserve her access to credit, non-payment can be contagious. So we urgently need to do something to help borrowers like Josiane, who seem genuinely motivated to get back on track with us, pull themselves out of the ruts they are in.

The first step was easy. She had well over 5000 gourds in her savings account, so I asked her whether she would like to use that money to pay of some of her loan. Women are often reluctant to do so, because their savings accounts balances will eventually have a lot to say about the amount of credit they can receive. The lower their balance sinks, the smaller the loan they are eligible for. But Josiane was pleased at the thought, anxious to do anything to reduce her debt.

For my part, I helped her by dating her withdrawal and the payment she made with it June 30th. This is important, because the first six months of her hurricane credit were interest-free. She did not start paying interest until July 1st. So, backdating the repayment saved her over 300 gourds of interest payments as well. More importantly, it enabled me to let her see that we really want to help.

But the hard truth is that, whether she owes one gourd or a million gourds, until she gets some money coming in, it will remain hard for her to repay. So she and I talked about her business prospects. We ended up spending a fair amount of time talking about Dominican salami.

Josiane feels that she can somehow assemble the money to buy a half-case of salami. If the market is good, she can turn it over in one market day, so her sales expenses will be low and her margin correspondingly high. If sales are slow, she’ll have to lug the salami to two or three markets, and her profits will be a good deal less.

The problem, she says, is that the market for salami around Marigo is not good right now. It’s sardine season. The little fish are cheap. So folks buy them and prepare their food with them instead. The only women who are making money on salami are merchants with enough cash to buy two-three cases at a time. They can then sell at a lower price than people like Josiane. Their margin is lower, but they make it up with volume.

So Josiane thinks that she’ll have to wait until October, when the sardines disappear and, so, the demand for salami rises again. She believes that those sales can then become the centerpiece of a revived business. It will be hard for her to repay her entire debt with that money. She’s a long way from having enough cash to buy and sell the quantity of salami that would require.

But she is not putting all her eggs, or her salami, in that one basket. Once again, she and her husband planted a large number of the plantain trees. They give her a lot to worry about. They have reached a height at which they are as vulnerable to wind as they can be, but they do not yet have any saleable fruit at all. So she told me that she prays every day that this year won’t bring high winds. If she can get a decent harvest, it will go a long way towards getting her back on her feet.

In the meantime, we are working with her to re-establish her credit center. It takes a lot of time and a lot of conversation. She’s not the only one with debt, but if we can help them all see their debt as a burden that Fonkoze can share with them, we stand a good chance of getting through this.

Fonkoze’s method of providing credit is inefficient under the best of circumstances. It’s a choice we make. If we want to reach the women who really need our services, we need to go to them. The expenses that the women who live in the more distant centers would incur in coming to our office to take and repay loans would take such a big bite out of their profits as to make the loans useless, or worse than useless.

We have to go to the women we serve. We maintain a fleet of motorcycles and spend a lot of money getting our credit agents to the centers in which they meet their borrowers. Marigo has over 40 such centers, and it is not really a large branch. If things were working really well, each would have between thirty and fifty members. We would know their homes, and know their businesses, but would deal with them very predominantly in the centers where they’d meet us twice each month.

But we are still struggling in Marigo. We have good centers that are too small and big centers that are no good.

A center with only two or three solidarity groups just isn’t worth the trip the credit makes to get there. An example is the very strong little center in Tèsè. It has just two groups, a total of nine members. It functions very well, but if it wasn’t for the fact that it’s close enough for us to schedule two other centers as part of the same trip, it would be hard to justify. Even though it is very strong.

I visited Tèsè last week to talk to members about recruiting new solidarity groups to join them. It’s a delicate issue. We want members to continue to feel responsible for the overall performance of their center, so we can’t force them to accept new members whom they don’t trust. But we can’t let them feel as though it’s ok for them to just insist that they don’t want to add anyone new. Our centers should each have five or six functional solidarity groups at least.

So we have left recruiting in our members’ hands. We are not allowing Fonkoze staff to look for new members. Members themselves will choose whom to invite to join their credit center, and on the morning I was with the members of the Tèsè center, they had a long discussion about four names that one of them proposed. The four names were proposed by two different members, and all seemed to pass muster. The women decided that the three women that one member proposed would be asked to find two more applicants and then join as a group of five. The women agreed to refer them to the other potential member they discussed, so they would be able to take her as a fourth member of their group. If they chose instead to add two other women whom they know, that fourth woman will need to recruit her own group of five.

In any case, if we can thus start adding new borrowers into those of our stronger centers that are small, our financial performance should start to improve. Our larger and tougher problem, however, is with centers whose organization has really broken down. This can happen for any number of reasons, but the results are predictable. Center attendance drops off, and repayment rates suffer.

This has been the case at two credit centers that one of our agents, Bob, serves on the mountain road right near the border that divides Marigo County from Belans in the east. Lagad is on the Marigo side of the line, and Bèdòranj is in Belans. They’ve been pretty weak over the past months, but seem headed in very different directions.

The center in Lagad is led by a dynamic young center chief named Rosemène. She called Bob up to Lagad on a Saturday about six weeks ago because it was the day of the annual festival. She explained that if the two of them walked door to door that day, they would find almost all the center’s members, both those who come to meetings and those who don’t, including the ones who live and conduct their businesses principally in Port au Prince. They spent a morning talking to borrowers, and the result has been encouraging. The last couple of times he’s been to the center, attendance has been almost three times what it had been, moving from single digits to mid-twenties. The center still has some delinquent loans, but we generally believe that where attendance is good, repayment issues will be resolved.

Bèdòranj is another story. It is a very poor, very rural area. Fonkoze has had a credit center there for years. Long before the Marigo branch was even opened, credit agents served Bèdòranj from the older and larger branch in Jakmèl. When I arrived in March, the office was serving four centers in the area: the old one which sits right on the main road and three others that are downhill from it, in very hard-to-access areas called Kabatis, Senwòk, and Nanzèb.

The centers in Kabatis and Nanzèb were among the first centers I closed. We had already written off a considerable number of loans in those neighborhoods, but the remaining ones were seriously delinquent as well. So we bit the bullet. We admitted to ourselves that we were not going to be able to continue offering credit in the area right now.

The center in Senwòk may still go the same way, and the one in Bèdòranj is not much better. I went with Bob a couple of weeks ago, and things were grim. Of 29 members of the center only three came to the meeting. And the reason those three women came was that they were scheduled to receive a new loan that day.

But Bèdorànj has too many long-time borrowers – some of them very successful – for us to believe that it is a lost cause. We feel as though we can’t give it up. Bob and I spent a day there last week, visiting borrowers in their homes, trying to understand their situations better and to encourage members to start attending meetings again. Only time will tell whether a day spent going door to door can have an effect.

One clear benefit of the day, however, is a growing sense of the range of the issues that our borrowers face. We spoke with women who were dealing with everything from difficult pregnancies to kidnapped children. We heard of stolen merchandise, of lost crops, and of sick parents. We heard of deaths in the family. Each woman had her own more or less miserable story to tell. Most remain optimistic, but listening to them nevertheless makes you wonder what your chances are of actually collecting the money they owe.

Part of the problem is the real hardships they explain, but another is that some of the things they say only underline that their loans were made improperly in the first place. I’ll mention three examples.

We heard from a woman who had been lending her loan money to others. They hadn’t paid her yet, so she couldn’t pay Fonkoze. But Fonkoze doesn’t provide loans for lending. Its loans are supposed to go to market women who’ll invest in merchandise that they themselves will sell.

We spoke with another woman who has no business at all. She sends the money she borrows to Port au Prince, where her son uses it to run a business. He had had some illness in his household, so he hadn’t been able to send the money she owes just yet.

We ran into the opposite situation as well. A mother who is up-to-date repaying her own loan explained to us that her daughter, also a borrower and a delinquent one, doesn’t have a business. She herself uses both loans. She had her daughter sign up because she felt the loan amounts she was eligible for were not enough. But now her profits aren’t enough for her to repay both loans. So she’s let the one in her daughter’s name run past due.

Fixing a center like the one in Bèdòranj will involve several kinds of work. We need to ensure that the successful members of the center continue to get appropriate levels of credit and other services when they need them. We need to get those members to help us stay in contact with delinquent borrowers so that we can collect such past due sums as are collectible and reintegrate problem borrowers who are able to make good use of credit back into the center. And we need to find more women who want to and are able to use Fonkoze credit to improve their families’ lives.

None of this is easy, but it is the only way.

The more firmly we grasp the overall picture here in Marigo, the more we can involve ourselves in the details of individual borrowers’ loans. Getting into these details makes small decisions possible that really help women out.

I’m thinking of Ivette. She’s a member of a credit center in Segen, the mountain region above Marigo. I’ve written of her case before, though I didn’t mention her name. She’s one of the few examples of a borrower whose husband I met first. When I first came to Marigo, he was attending center meetings for her because she had just had their first child. I referred to him as “Paul”. (See: Dealing with Men.)

Ivette had taken a regular loan for 15,000 gourds – about $375 – in December, though she was more that eight months pregnant. She probably should not have received this loan. Problems around childbirth are so common in Haiti. Over seven percent of children die at birth, and for every 100,000 births, 523 women died in Haiti, compared to eight for every 100,000 births in Europe. Giving a loan to a woman on the verge of childbirth is a big risk, especially if you know little about the household she is part of.

But she got the loan, and the first thing that happened was that she had a very difficult labor and so had to give up her business and spend her time recovering with her new baby. Her husband took over the business for her, but on a purchasing trip to Port au Prince he was beaten and robbed of everything.

They were thus left with a big debt and very little to repay it with. They squeezed the first two out of their five reimbursements out of their assets, but by March they really had nothing left. They were falling behind, lateness charges were accumulating, and they couldn’t see any way out. Ivette’s husband kept coming to meetings, hoping, I suppose, that we could figure something out. Ivette and her child slowly recovered, but the financial situation was looking worse and worse.

When we finally we able to study the file carefully, we discovered something odd: The loan that Ivette took in December was at Fonkoze’s standard 5% interest rate. At the time, Fonkoze had raised donor support to offer interest-free loan to borrowers in regions that had been struck by the hurricanes last September, and Segen was one of those regions. So Ivette had been eligible for an interest-free loan.

When I asked her why she hadn’t chosen an interest-free loan, she said two things: For one thing, at the time we were offering interest-free hurricane loans, she had already repaid her previous loan. She had understood, wrongly, that only borrowers with unpaid balances were eligible for these loans. For another, the hurricane loans required a repayment in the first month of the loan. Reimbursements for standard loans start in the second month. She thought the extra month to work with the full loan amount would be to her advantage.

In any case, the first thing I did was to go into our data base and retroactively transform the loan into an interest-free one. This immediately made a big difference. The standard interest rate is 5% per month on the declining balance. The effective interest rate is thus 40% annually or 20% for a six-month loan.

This will of course seem high to anyone living in the States, but is very competitive by local standards. Loan sharks regularly charge 50-100% per month. The formal banking sector, whose loans are also expensive, won’t give loans to the poor at all. Other microfinance institutions offer loans at rates similar to Fonkoze’s.

Ivette had owed 15,000 gourds of principal and 3,000 gourds of interest, a total of 18,000 gourds. She had made two repayments of 3600 gourds each, and thus had a balance of 10,800 gourds. Shifting the loan to interest-free immediately reduced her debt to 7,800 gourds.

But there is another important difference between hurricane loans and standard ones: Borrowers are required to deposit 15% of the amount of a standard loan into their savings accounts as collateral. The money remains theirs unless they default. Hurricane loans come with no such requirement. They were designed to get women in debt back on their feet and in business, so all unnecessary barriers were removed. Ivette thus had 2250 gourds on deposit as collateral for her standard loan. I made a withdrawal of 2200 gourds for her and used it to further reduce her debt. She then owed only 5600 gourds.

But the interest-free contracts were for six months, and Ivette’s had already expired. So the last thing I did for her was the same thing we did for every other hurricane borrower who was unable to repay in six months. We rolled the whole balance into a second six-month loan at a subsidized interest rate of 2% per month. Her total debt would thus be just under 6000 gourds, and she would have six more months to repay it.

Yesterday she made her first repayment. She is back in business, and though her commerce is much smaller than it was before her troubles, she’s glad to have the resources to begin to eliminate her debt. In fact, she chose to repay somewhat more than the amount that was due. She wants to complete repayment a month or two early if she can so she can take out a new loan and begin to build her livelihood back up again.

I came to Marigo in March to see whether a teacher could learn to manage a bank branch. It wasn’t as though I was looking to change my stripes. I wanted to manage it as a teacher.

In my work as a classroom teacher I have tried to sustain a commitment to student-centered learning. I see my primary responsibility as helping students see the situations they find themselves in as questions they can work together to answer or problems they can work together to solve. The heart of the matter in Marigo is whether I can learn to be part of a bank branch’s staff that succeeds by looking at its situation in that same way.

But it’s hard to face problems when we’re buried in them. When we’re feeling overwhelmed, it can be hard even to know where to start. And the Marigo office was really in bad shape.

The heart of the problem was the result of two years of fast, careless growth. The Marigo branch opened in 2006, and from the outset it easily and quickly recruited new borrowers. But even at its period of high growth, member turnover was high. Borrowers would drop out of Fonkoze’s lending programs only to be replaced by new ones. As many borrowers who were lost would be more than replaced by new ones, however, and by early 2008, the office was serving between 1800 and 2000 borrowers.

The quality of the Marigo loan portfolio was deteriorating, however, so Fonkoze’s central office made an important decision: Marigo would have to stop recruiting new borrowers until it could learn to serve those already in the fold. Learning to serve them better would involve a lot of hard, disciplined work in the field, work that only grew more difficult in the face of an economic crisis brought on by the world-wide spike in food and gas prices and then more difficult still when three hurricanes and a tropical storm ravaged the Marigo region, and much of Haiti, last August and September.

Since putting an end to recruiting did not affect the dropout rate, the total number of borrowers started to decline. By the time I joined the office in March, there were about 1200.

What’s worse: It’s not as though they dropped out in a convenient, well-organized way. For its 2000 borrowers, the office had five credit agents serving them in 56 credit centers. When we were down to 1200 borrowers, we still had five agents and 56 centers. Our cost per loan was, necessarily, spiraling upward.

So the first charge I had from the central office was to lay off two credit agents. An ugly enough task in a country where unemployment is so high that employment in the formal sector can scarcely be said to exist. What made it worse was that we would need to plan how to serve borrowers from the same 56 centers with the three agents who remained.

I decided that we simply couldn’t. So we closed some of the very worst centers, ones we felt we could not save.

Most of these had become unsalvageable for one or another version of the same reason: A self-appointed local leader, almost always a man, had managed to interfere sufficiently with Fonkoze’s close relationship with borrowers that we no longer could make the borrowers feel genuinely responsible for their loans. For example, in Kajak a local leader had, among other things, taken it upon himself to collect reimbursement payments, but hadn’t been turning them over to Fonkoze. The women believe they’ve repaid, but the money never has gotten to us. And there’s no paper trail to pursue. In Nan Zèb, most of the loans went to ghost borrowers, women who did not have businesses at all, who signed for the money and then handed it over to the local leaders who put them up to it. Ironically, those leaders then used the money as loan capital that they then let out at truly exorbitant rates. They are loan sharks, exactly the thing Fonkoze is most anxious to combat.

We continue to pursue the money that is in those men’s hands, but our options are limited. And even if we succeed in collecting it, we have to admit that we cannot be confident of developing direct relations with borrowers that these men can’t undermine. So we just have to give up on the neighborhoods for now.

We also combined some centers that were close to each other and not too large. We thus managed to get the number of credit centers down to 42.

These changes involved a lot of chaos. On one hand, we had to change some center meeting days and times, which confused both our office and our borrowers. On the other, we had to make significant changes in the assignment of centers to credit agents. This interfered with the familiarity between the agents and their borrowers that credit depends on.

So because of the chaos, we had weeks of not really knowing where we stood. We were regularly seeing small signs of progress or of trouble, without feeling very clear about the overall state of things. Under the circumstances, it was been hard for me to do the kind of teaching I like to do. The questions and problems haven’t been presenting themselves clearly enough for the staff to face.

In this context, Wednesday morning’s staff meeting was a real step forward. The credit agents gave a short report about each of their centers: the centers in pretty good shape, the ones that are improving, the ones that are still weak, and the ones for which we have no real hope. Each of the three agents seems to see the situation he is facing in his centers with increasing clarity, and though there are a couple more centers that they think that we will lose, and a couple that we just don’t know about, the core of well-functioning centers seems to be growing both larger and stronger.

The clearest indicator of that improving core, in fact the key to it, is the increasing cooperation we are getting from our center chiefs, the women whom borrowers elect to lead them.

There is the center in Lilankou, for example, which was created when a small center already in existence there was joined by members of neighboring centers in Nan Aka and Savann Dibwa. The combined center now has very good attendance, though better among members from the non-Lilankou groups than from those from closest by.

And one has the sense when one visits the center that its chief is really in charge. I watched our credit agent, Jean Bellande, make some loans the last time I was there, and was encouraged to see how he went through the process of counting out the money and handing it over to the center chief, who then handed it to the borrowers. The chief was careful to say that Fonkoze had lent her the money and that she, in turn, was lending it to the borrowers who signed for the loan. It was the best evidence I had seen thus far that at least one center chief was ready to take the full measure of responsibility that we ask chiefs to take.

On Saturday, I was in Lagad, the home of one of our oldest centers, in the mountains beneath Segen, with another agent, Bob. He wouldn’t normally go on Saturday, but the center’s chief had told him that it would be a day of neighborhood celebrations. The locals who live in Port au Prince would be home for the weekend, and so it would be a good day for the two of them to walk door to door, talking with delinquent borrowers who aren’t usually around. And it was exciting to see that she led the way to most of the houses and that she did most of the talking as well. Her center is a little behind the one in Lilankou in terms of financial and attendance figures, but the sense of responsibility she demonstrated gives very good reason for hope.

A final example: Tuesday I went with Bob to Koray Lamòt, the most distant credit center we serve by far. It’s in the mountains above Belans, almost three hours away by motorcycle. We never should have opened the center, but we did. And we’re a little loathe to give up on it.

But it remains weak, and one of the main issues is attendance. Tuesday, its chief offered a clear explanation: Only very few of the poorest members of the centers live and have their businesses in Koray Lamòt. Most buy merchandise in the area every couple of weeks, and then take it by truck to Port au Prince. That is where they live and do most of their business. They like coming home to see their families and to buy the coffee, charcoal, and agricultural products they principally sell.

So we suggested a compromise. We would adopt the pattern we are already using for women who live in Marigo but work in Ansapit. They would need to come only once per month. Tuesday afternoon would be their center meeting and Wednesday would be their reimbursement. The credit agent would stay overnight, probably as the center chief’s guest. We can’t be certain that this plan will work, but we might as well be optimistic.

As we get a grip here in Marigo, the look of things really changes. We begin to see a finite number of problems, some big and some small, where once we saw nothing but one giant, indeterminate mess. That feels like progress.

We have two credit centers in Mabriyòl, a two-hour ride eastward from Marigo along the main road to Belle Anse and Thiotte. The older office in Jakmèl established Fonkoze’s presence there, several years before the Marigo office opened. Jakmèl is about 45 more minutes to the west, so the existence of a Jakmèl credit center in Mabriyòl reflects how little distance from an office was considered in opening up new regions during Fonkoze’s initial phase of growth.

The two centers were originally a single center, but they flourished so successfully that it became necessary to divide them in two. Mabriyòl is a relatively populous, very rural area in the mountains above Belle Anse. It has a small, one-room health clinic and a public primary school, but little else. The population isn’t concentrated in a center of town, but spread more-or-less evenly across the hillside.

It’s hard for me to get to Mabriyòl. It’s not that it’s especially inaccessible. We have centers that are farther, harder to get to, or both. But it meets on Monday mornings. I try to spend as many Sundays as I can at home in Kaglo, and if I leave by 3:00 AM on Monday, I can get to work around 8:00. But the credit agent who works in Mabriyòl leaves our office at 6:00. Going with him requires me to spend Sunday night in Marigo, something worth doing now and again, but not every week if I don’t have to.

My first visit to Mabriyòl was a happy occasion. We were to improvise a surprise graduation ceremony for two of our borrowers. In this context, “graduation” means moving from solidarity-group credit into individual loans.

It might be hard to appreciate the magnitude of this accomplishment. All solidarity-group loans start at 3000 gourds. Individual loans begin at 50,000 gourds. So the two women who were ready to take this step had managed to borrow and repay about ten loans of increasing size, over the course of five or six years, through floods, droughts, hurricanes, political upheavals, a deteriorating economic landscape, and other impediments. And they did so while living with one of the poorest regions in Haiti on one side of them and a small coastal town with only a small marketplace on the other. They worked and continue to work by traveling back and forth to Port au Prince, carrying produce in one direction, and manufactured goods in the other. Transportation in Haiti is always a challenge, but these women persevered. They are the distribution network that links their very rural community with Port au Prince, Jacmel, and the world generally.

They had just received their new, individual loans, and they are no longer required to come to meetings. They now receive their loans and make their repayments through an entirely different mechanism. But had come to the center meeting because they know they still have a role to play. They are leaders among the Mabriyòl women, both by the example that they offer and the central roles they choose to play. One was the center’s long-time elected chief. Since their center has been struggling with poor attendance and loan delinquency, they aren’t ready to simply turn it over to its new chief.

They both belong to the center in Upper Mabriyòl, and we went to the one in Lower Mabriyòl first. It’s a smaller center, but its troubles are a little more serious. I wanted to have a look. Our first step towards strengthening weak centers was to hold workshops for the centers’ chiefs. We feel, first, that they are the ones best positioned to draw women back to the centers and, second, that once attendance is regular, repayment issues will be easier to solve.

I was especially anxious for this opportunity because I hadn’t been able to attend the workshop for Mabriyòl and neighboring centers. A credit agent who had attended one that I led had had to lead it himself. So I wanted to see whether his workshop would have an effect.

The centerpiece of the workshop was our sense that center meetings were no longer either interesting or fun. They had become long and boring because entirely dominated by the mundane details of giving out loans and collecting repayments. Our twin priorities would be to quicken the repayment process by better organizing it and to create and use space within meetings for activities that are pleasant and useful to center members. The meeting in Mabriyòl had very little reimbursement scheduled, so it would mainly b a chance to see how the center chief and credit agent would use some free time.

I could hardly have been more pleased. The recently elected center chief had gone to the local health clinic to research family planning. She gave a detailed report to members of the options locally available, and then asked her fellow members for their thoughts as to whether to use planning and which ones they would prefer. The lively conversation that ensued lasted about 45 minutes. The women ranged in age from older women claiming to be interested more for their children than for themselves to young women who might have their first child – planned or unplanned – at any time. They all got involved. When the credit agent asked, in closing, what the women thought of the meeting their chief had prepared for them, they answered with loud applause. Though attendance at the meeting had been characteristically poor, more meetings like that might be the best way to draw the women in.

We then moved to Upper Mabriyòl. It meets in a public school building, right next to a Baptist church. The building is under construction. Work was going on even as we met. And the church was hosting a prayer meeting. So almost no one was ready when we arrived. Some members were preparing the prayer meeting, while others were hauling water for the masons working on the school.

We started the meeting with a very short award ceremony. We had come with certificates, congratulating Mabriyòl two graduates. The women accepted them with big smiles to the cheers of the other members present. There was not, however, much else we could do to make the meeting fun. Disbursing new credit for some of the women and completing new loan requests for others took up most of the time.

The latter process takes some time. Borrowers need to be ready for new credit, and the complexities of the special hurricane credit we are now moving out of mean that, even within a solidarity group of five women, we might find some who are ready and others who are not. A few groups had members who don’t yet have the cash on hand to repay their loans completely, but who fear holding their fellow group members back. They were hoping to make withdrawals from their savings accounts to finish repaying their loans, thus releasing themselves and their fellow group members for new credit. They themselves would then wait as they rebuilt their savings through deposits before they ask for new loan, while the other members of their group would be free to move forward.

But making withdrawals is normally difficult for the women. Credit agents are not authorized to make withdrawals in the field. They don’t keep withdrawal slips with them, nor do they keep extra cash on hand. They do not operate like roving tellers. They handle only disbursements and reimbursements of loans and savings deposits for borrowers. For members of a center as far from Marigo as Mabriyòl is access to savings is hard to get. Transportation costs to and from the office to make a withdrawal are high. They stand to lose too much of the money as a transaction cost.

So I did the following: I wrote letters authorizing Fonkoze to make savings withdrawals for reimbursement for each woman who requested one. I asked each of them to sign her letter, and then asked the new center chief to sign as witness. I would make the withdrawals in the office, and then send the receipts back to the center on the credit agent’s next visit. This would accomplish two goals: It would, on the one hand, create an above-board means of enabling women at this distant center to conveniently eliminate their debt. On the other, it would reinforce the center chief’s sense of responsibility within her center. Everyone seemed satisfied. I made the withdrawals and the reimbursements and deposited the authorizing letters in our files when I got back to Marigo.

I would have left the center with a good feeling except for a problem that I could not resolve. I met with one borrower who was the only member of her group to be ready for new credit. The others had not made much of an effort at reimbursing their previous loan at all. She was very anxious to get a new loan, and began asking the other women who were make new loan requests to let her join their group. None were willing. Whether they felt they didn’t know her well enough or knew her too well to be willing to take a risk, I can’t say. In a sense, I had to be pleased at the sign that women wanted to take membership in their groups seriously. On the other, I was sorry to see a borrower in need getting left out. I’m not sure how I can help her any time soon.

That’s pretty much the way of things these days. I spend my days, as a colleague at my home institution put it to me, seeing silver linings in cloud after cloud. Sometimes we feel progress. Our portfolio is now smaller and cleaner than it was when I arrived, but we are very far from being out of the woods.

We were down to one working motorcycle. Our credit office has three, but two were collecting dust, unusable because of various problems. With three credit agents making visits into the field every day, and some of those visits hard to accomplish without a motorcycle, we were really struggling.

So we attacked the problem in a couple of steps. The first involved repairing one of the two bad motorcycles immediately by exchanging all its bad parts for good ones in the other bad cycle. We were lucky: It turned out that they had very different problems. We thus concentrated all the bad motorcycle parts in one place, and won a second good motorcycle for ourselves. It cost nothing but a few hours of a cheap mechanic’s time and the price of a little bit of grease. It was a big step forward.

We thought of the motorcycles as we were considering what to do in Marigo.

We serve a large swath of southeastern Haiti. Our credit agents ride two or more hours from our office to get to credit centers. But one of our largest credit centers is right where the population is densest, directly across the street from us in the middle of Marigo. It has 17 solidarity groups, and some of them have relatively large loans.

It’s also one of our worst credit centers. Few of its members come to regular meetings, and the delinquency rate is high.

Our situation in Marigo might be extreme, but it is not uncommon among Fonkoze offices. Many find that they have an easier time managing more rural credit centers than they do the ones that are closest to them. It may be that women living farther from concentrations of population feel a stronger need for our services. It may be that they have deeper roots in the communities they live in and, so, that their reputations in those communities mean more to them.

In Marigo, our immediate concern is not the important theoretical question as to why rural centers tend to be stronger. It’s what we should do about one center that is in bad shape. So we decided to look more carefully at the composition of the center. It turns out to consist of two distinct groups. There are women who live and work in Marigo and others whose homes are in Marigo though they spend most of their time in Ansapit, the large market town to the east, right on the Dominican border. These latter women earn their living through border trade of various sorts.

My neighbor and landlady in Marigo, Emerit, can serve as an example. She supports eight children and two step children in three households in Haiti by buying fresh fish in Ansapit, packing it in ice, shipping it to Marigo, and selling it to buyers that come from Port au Prince and Jakmèl. It’s a big business, and it keeps her on the move.

For the most part, the Ansapit women repay their loans well, but they don’t come to center meetings. They talk about the long and expensive trip from Ansapit, and say that they can’t always make it to meetings.

Fonkoze has credit centers in Ansapit. They are run out of the office in Tyòt. So I asked the women whether it wouldn’t be better for them to take their loans right in the market where they work. But they were very hostile to the idea. Their roots, they explained are in Marigo. They are not interested in belonging to an organization whose roots are in Ansapit or Tyòt. More importantly, their children are in Marigo. The trips they make for reimbursement meetings allow them to see their kids and to leave them the money they need to feed themselves.

Emerit comes to Marigo every couple of weeks and whips her house into shape. She makes sure that the cupboards are stocked, and provides a couple of slaps and a couple of words of encouragement to children who seem to require them. She repays her loans on time, but attends meetings irregularly.

The Marigo women, however, are another story. Most of them neither repay their loans nor come to meetings. As we look more and more careful at the women in this group, we’re finding that several of them are without any commerce at all. This happens occasionally, especially when new credit agents are desperate to recruit the minimum number of borrowers they are expect register during their probationary period before they become full members of the staff. If a branch manager is not careful to control the agents’ work, they can slip into taking shortcuts, like offering credit to unqualified borrowers. The consequences can be serious both for the borrowers and for Fonkoze.

As we’ve watched the condition of the Marigo center degenerate, we’ve worried more and more that we would lose our own backyard entirely. We felt we had to do something to establish a foothold. So with the management of our motorcycles as our model, we went to work.

We decided to split the center in two. We would put all the solidarity groups that function well into a new credit center we would create with them, leaving all the problem loans and borrowers in a single center. This would mean having a special center, whose members would be, almost exclusively, women who live and work in Ansapit. For them, we would make a special arrangement: We’d ask them to make only one trip to Marigo per month, but would then meet with them on two consecutive days. The first would be their reimbursement meeting. The second would be the discussion. If they could show a commitment to this new structure, we would commit ourselves to giving them priority service.

The women loved the idea. Both because it promised to get them the loans they want more quickly and more effectively and because it would enable them to disassociate themselves from a center that they have grown ashamed of.

Wednesday, the new center had its inaugural meeting. Attendance was almost perfect, there was a hotly contested election of a new center chief, and a vote to give themselves a new name. I am optimistic.

In the case of the motorcycles, we were left with two that worked well and one in an extreme state of disrepair. But by investing in some new parts, and in some more of the mechanic’s time, we were able to get the third one up and running. The strategy thus proved a great success.

In the case of the Marigo center, or now centers, we have much work to do. We will need to invest a lot of time, going door-to-door, mainly on our days off, to start piecing the problem center back together again.

It will be hard. But we won’t be able to claim real success until we have two good credit centers in our neighborhood. We cannot afford to simply cast the troubled center adrift. Doing so would be bad for the borrowers it serves and bad for Fonkoze as well.

The key to straightening out the portfolio here in Marigo is to straighten out the solidarity that Fonkoze’s credit depends on. Fonkoze loans require neither co-signers nor collateral in any traditional sense. Borrowers just deposit 15% of the value of their loan value into their own savings accounts, and agree to serve as guarantors for one another.

That is, a group of five women takes a loan together. The five are called a “solidarity group.” Their loan is then divided among them in portions they’ve agreed to in advance. Fonkoze counts on them to help and encourage one another, even to pressure one another to ensure repayment. When the whole loan is repaid, the group as a whole becomes eligible for a new loan.

This has led to the creation of a precise new meaning for the phrase “showing solidarity,” or its Creole equivalent. At Fonkoze, the phrase has come to mean contributing towards paying off someone else’s debt. By helping with your fellow member’s repayment when she has a problem she can’t solve by herself, you can facilitate on-time repayment of your group’s loan and, so, ensure that you get your next new loan on time.

At least that is how it is supposed to work. And it does work that way in the many Fonkoze offices that function well. Borrowers can have all sorts of problems that we barely hear about because members handled them through internal loans within their solidarity groups or their centers.

It doesn’t work that way in Marigo, however. Fonkoze members here have shown a hard reluctance to solidarity. They don’t want to help each other out. I was at a meeting at the center in Ravin Nòman, and we were talking some about solidarity. One of the women said, “My mother carried me for nine months, and I wouldn’t pay off her loan. So I’m not paying anyone else’s either.”

A striking sentiment. I admire the honesty. But examples of the problems it creates are likewise striking. Our most distant center is in Koray Lamòt. The first time I visited it with Jean Claude, its credit agent, one of the members was 20 gourds short on her repayment. 20 gourds is a pittance for most of our borrowers, less than 50 cents. Normally, her solidarity group would handle that easily with an internal loan. But none of the other four members of her group showed up at the meeting, and the members of the credit center who were present wouldn’t come through for her. Since she wouldn’t have another chance to pay off the 20-gourd balance until Jean Claude returned in two weeks, she was stuck with a 120-gourd lateness penalty. Ridiculous.

So we don’t really think we can repair the Marigo loan portfolio unless we can recreate at least part of the protection against inevitable bumps in the road that solidarity is supposed to provide. But it’s not easy. It’s like pouring spilled milk back into the carton. Generally, you just wipe it up instead.

And the way the Marigo portfolio has been managed for about a year only makes it harder. Early in 2008, Fonkoze decided to try an experiment in several branches, Marigo among them, where the repayment rate on loans was poor. We would try to address the needs both of borrowers who were falling behind in their repayments and of the members of their groups who were ready to take new loans by separating them, on paper, into distinct groups. A solidarity group of five members might thus be divided into a couple of loan contracts: one contract restructuring debt for those whose loans were delinquent and another contract getting a new loan to one, two, or three members whose loans were fully repaid. I wrote about the initiative at the time. (See: New Structure.)

One key aspect to the approach was supposed to be that the separation was to be on paper only. Solidarity groups would retain their importance. Groups of five would remain groups of five.

In Marigo, however, this part of the message got somehow lost. When Fonkoze’s more capable members discovered that we were giving them new loans on the basis of their individual performance, they understood themselves to be receiving individual loans. For many of them, this meant solidarity be damned. Every woman for herself. And, of course, for her family.

It’s understandable enough. Though they entered Fonkoze solidarity groups with friends and neighbors they had chosen by themselves, their goal had not been neighborhood development. They had joined to improve their own lot. They are businesswomen trying to increase their earnings, fighting to lift their families out of poverty, and are right to choose the route that seems to them the quickest. We tell them that if they help their friend today, she will be able to help them tomorrow, but they tend to be so unfailingly optimistic that it’s hard to convince them that they might someday need the help. Even when the evidence seems clear. Haitians say, “We live in hope.”

And the problem that these new individual-seeming loans create is even greater than one might imagine. In the old groups of five, each woman put up 15% of her loan as collateral. If one woman has a disastrous inability to repay, her loan could be written off, and Fonkoze could take her savings and the collateral from the other four women to offset the loss. Since the percentage of write-offs has tended to be very low, Fonkoze had generally found itself to be well protected. But these new loans are individual on paper, and so they are secured by only the one woman’s 15%. Losses can thus be quite significant.

The core issue for management is thus to take steps towards recovering as much of the principle of solidarity as can be saved. We need to help the women see the advantages of solidarity and to get as many women back into the groups that offer Fonkoze the protection it needs.

Ideally, I’d like to meet with each solidarity group individually, but there are hundreds of them. So I have to attack the problem another way.

I decided to begin my approach by acting in the sphere where it is easiest for me to have the biggest effect and move outward from there. I mean: I would start by working with the three credit agents whom I’m with more or less every day. I would move together with them to re-educate the center chiefs, the elected leaders of the forty or so centers the Marigo branch serves. Finally, the credit agents would work with the center chiefs to re-educate solidarity-group leaders and the groups themselves.

The work with credit agents has been proceeding well. I’ve been spending almost all my time with them since I came to Marigo, and it appears to have paid off. They had become undisciplined in their work. Just to cite two examples. First, they had ceased entirely to collect penalties for late payments. In the three months since I arrived, they’ve collected almost four times the penalties collected in any other branch.

Second, they had been allowing borrowers’ loan amounts to increase much too significantly from loan to loan. A member who would get five-six thousand for her second loan would get 12,000 or more for her third. Members were getting more credit, much more credit, than they could manage, and that was pushing them almost directly into trouble. They latest round of loan amounts they’ve proposed have shown only small increases, and these increases have only come to borrowers who have closely respected the conditions under which they get their loans.

More importantly, when I see the agents with our member/borrowers, they are firm but friendly. They listen. They advocate for the women in front of me. They show every evidence of wanting to do things right.

Our next step is to begin re-educating the credit agents’ most important partners, the women whom credit centers elect as their chiefs. This work has begun already, but will intensify and accelerate over the next month with meeting that the agents and I organize for groups of five-ten chiefs at a time. After that, the agents and chiefs will work with group leaders.

So the work of putting the branch’s work on a stronger, more orderly foundation is well under way. But the goal is not to set up a branch that seems to operate well, but one whose members make sustainable progress out of poverty. Their progress is what will eventually make the branch’s operations sustainable, and this will in turn enable us to serve more women in the long run. And it is much too early to say whether the apparent results of our work are leading to real results in the impact we have on women’s lives.

But, we live in hope.

It’s more than puzzling. It’s a little concerning.

I was in Chodri on Friday, a very rural area, high in the mountains on the way to Belans. It’s just above the main road, where it starts to turn away from Segen. The credit center in Chodri has the typical problems: Attendance at regular meetings has been poor, and payments aren’t coming in on time.

At the same time, it’s a center that I have hope for. The center’s elected chief never appeared to really understand what Fonkoze expects from her, but she seems to be getting clearer and seems motivated to take her share of the responsibility for turning her center around. She’s beginning to take a hard line with women who are late or absent, changing them a small penalty. Moïse, the credit agent I was with, and I were a little late ourselves. We had rushed there from another center meeting that lasted too long. And she made us pay the penalty as well. She was active during the meeting, intervening in the conversations between Moïse and the other members, explaining him to them or them to him. Attendance at the meeting was the best we’ve seen in the center in some time, and she could tell us where the absent members were. And the reimbursement was better than we’ve been seeing in Chodri as well.

But I was disturbed to discover that a number of the women didn’t know exactly how much they owed. They didn’t even seem sure of the regular repayment amount. They would hand Moïse a sum of money, but when he would ask them how much they owed they would tell him that he was the one who could answer that question. “Se ou menm ki konnen.” They trust their credit agent implicitly, and that’s encouraging in a sense.

But it’s not what we’re really looking for. Borrowers who will be successful in the long run are women who will manage their own affairs closely and stick up for themselves when they think Fonkoze is wrong. And sometimes Fonkoze is wrong.

I met Josane in Fonjannwèl, a populous coffee-growing region on the way up the mountain from Marigo towards Segen. We have three credit centers there, with something like 120 members.

Josane was one of several women who had made a special appointment with their credit agent so they could pay off their loan a little early and apply for a new one. Moïse went patiently through their files with them, one at a time, taking their repayments and confirming that they were ready to make their request.

When he got to Josane, he found a problem. Her file showed that she had been late with two repayments, and she had paid a lateness penalty each time. Since our procedure is to collect penalties before repayments, each of those two repayments had thus been incomplete. What’s more, the resultant overdue balance continued to accumulate lateness charges. When she came once more with what she thought she owed, she was still left with a balance, so she wasn’t ready to apply for new credit. Moïse explained the situation to her patiently, and she was disappointed, but she said she understood.

She was determined to get a new loan quickly, so she said she would come to the office the next day to pay off her balance. She would then be able to make her loan request the next time Moïse visited her center.

She was good to her word. The next day we saw her in the office indeed. I greeted her as soon as she arrived, but then went about my business. My attention was drawn, however, to an argument that ensued between her and the teller. The teller was explaining how much Josane owed, but Josane didn’t want to believe it. Since I had spoken to her the day before, I took the file from the teller, asked Josane to sit down with me, and then prepared to start explaining.

That’s when I made a discovery. Josane had signed a 12-month contract, but when her previous credit agent had filled in her loan amount he had calculated it as though she would repay in six months. Perhaps he did so because she had announced her determination from the start to do just that, and so get her new loan more quickly, but it was a big mistake.

She began her program of double repayments. A remarkable achievement. The sacrifices she had to make were very real. She was dealing with a situation that was difficult to start with. She lost not only her business but all her livestock in last year’s hurricanes. She lost a harvest and some of her farmland as well. So she would need to cut her expenses drastically to make her repayments on her already-reduced income.

And she wasn’t willing to trim her budget in any old way. She herself can not read, but is all the more determined to keep paying her children’s school tuition. She has six, and the oldest are mid-way though high school. The one place she found to cut expenses was her food bill. And as she explained to me how hard it had been, she lifted her shirt to show how thin she had become.

Her effort was heroic, but barely enough. She fell a little behind her accelerated schedule, but she was still well ahead of what she owed to Fonkoze. But since her repayment amount was wrong, her credit agent and our teller thought she was behind. They assessed the lateness fees that made things worse for her.

She had been listening to our explanations patiently, without really understanding them. It wasn’t until she really insisted that we explain everything to her that we saw that we were wrong.

She was quiet and polite through the whole conversation. That’s not always the case with our members. They sometimes get angry and loud. Even when we are right and they are wrong. But we continually encourage them to get as angry as they feel they need to get. Their willingness to insist on her rights is of great value both to them and to Fonkoze.

Here are some photos I took around Fonkoze credit centers in Ravin Pal, a fertile agricultural area of Segen, the most important town in the mountains above Marigo. Fonkoze has two large credit centers in Ravin Pal, three others elsewhere in Segen, and several more nearby.

The trace of blue on the right is the Caribbean. I took the picture looking east towards Belle Anse.

Heading north from Ravin Pal takes you farther up into the mountains. There’s a pine forest there. Several of the members of the center in Ravin Pal live in or beyond the forest.

This is not the ravine that Ravin Pal was named for. In fact, this one appeared after a recent rain turned a natural drainage ditch into a torrent.

The building, which is both a school and a church, does not look long for this world. Neither does the house we met in, which is just through the trees on the right.

But even getting to Ravin Pal, and the other centers in the mountain, will be increasingly challenging. Recent rains cut the main road in two by washing out what had been a bridge.

The destruction of this road, which is the principal route from Marigo to the east and, more importantly, from the mountainous region above Marigo, through Marigo to Jakmèl and Port au Prince, will have hard consequences for many Fonkoze members. Crops that they were counting on shipping to Port au Prince will probably spoil in their hands. On the way up the hill towards Ravin Pal, we saw large baskets of oranges beginning to show signs of rot and mold.

And the rainy season is just getting underway.