Bringing Livelihoods to the 'Extreme Poor'

Anne E. Hastings helped create Fonkoze, Haiti's largest microfinance organization, in the mid 1990s, after 15 years as a management consultant. In a few years, the organization was having an impact. "When you offer these women convenient, accessible financial services," Hastings told an audience at Yale SOM on September 27, "amazing things happen." Fonkoze later added healthcare and insurance services. But she added, "There were many people we were leaving behind."

Hastings spoke as part of the long-running lecture series of Yale's Program on Nonprofit Organizations (PONPO), which is jointly overseen by Yale SOM's Program on Social Enterprise and the Whitney and Betty MacMillan Center for International and Area Studies at Yale.

The traditional microfinance model, Hastings said, doesn't work for the isolated "extreme poor"—those with no productive assets like land or animals, whose children don't go to school, who face hunger daily. Hastings helped implement a program, modeled after a program successfully implemented in Bangladesh by the organization BRAC, to give such people the support, stability and skills to be able to benefit from microfinance.

Under the program, called Chemen Lavi Miyò (CLM), which is Haitian Creole for "A Road to a Better Life," clients receive a carefully sequenced set of services: stipends to allow them to feed their families, training in livelihood activities, and an "asset transfer" (generally livestock) with which to generate income. A caseworker visits each client weekly for 18 months. Upon graduation from the program, clients may move up to the first step on Fonkoze's three tiers of microfinance programs, which provides small loans.

In its initial pilot phase, 96% of participants completed CLM, and two thirds continued with Fonkoze's programs. That success, Hastings said, required intense support from caseworkers, who helped clients overcome frequent obstacles. "We can't do the climb for them," she said. "Our job is to catch them when they are falling off and put them back on."

Answering questions from an engaged audience of Yale SOM students and academics from elsewhere at Yale, Hastings said that Fonkoze's biggest challenge was human resources: the caseworker position requires both local expertise and organizational skill, complicating the task of scaling up the program from the pilot phase.