The Wisconsin Microfinance Partnership developed out of a desire to find a longer term solution to addressing the devastation wrought on the Haitian people by the earthquake in 2010. Instead of providing donations/aide to address short-term needs, our purpose was to help Haitian citizens get back on their feet by providing small, short term loans that would be used to re-build their businesses.
Commonly called “micro-finance”, this approach was popularized by Muhammad Yunus and the Grameen Bank. Mr Yunus won the Noble Peace Prize in 2006 for his work in making loans of small amounts of money to groups of poor people in Bangladesh. He proved that such loans not only would be repaid, but that local economic development would blossom.
Microfinance is an extremely effective way of supporting those that are committed to recovering from the earthquake. Access to capital is extremely limited in Haiti, and this type of micro-lending program can serve to meet a need which is currently unmet.
We sought to use the principles developed by Mr Yunus in order to help the Haitian people begin their journey out of poverty.
Our program was based on relationships that existed between Madison and Haiti. Gergens Polynice, a native of Haiti, is a PhD student studying at Madison. Pastor Walliere Pierre was Gergens’ pastor as he grew up, and is currently a regional supervising pastor for a number of churches in Haiti.
With Pastor Walliere’s help, requests for money were screened and 42 Haitians received a total of $3000 in August, 2010. Loans were 5 month loans, at a cost of 1%/month. This interest rate is much lower than any other funds that are available in Haiti. Loans were made for such things as purchasing food in Port-au-Prince for resale in Barau Michel, purchasing seed for growing vegetables, and buying raw materials such as thread or cloth for making clothes.
Adhering to traditional microfinance practices, loan agents frequently visit the capital borrowers, and offer assistance in business training and financial planning. Not only has this micro-finance program been warmly received with gratitude, interest and excitement in Barau Michel, but early repayment rates have been remarkably high across lending groups.
The strong demand for capital exists and continues to grow in Haiti, and in order to respond, the WI Microfinance group plans to expand our program so as to provide funds more frequently, effectively and widely to those who are in greatest need. We have $8,000 committed to the program with an additional $2000 to be provided in summer 2013 when Tom visits Haiti for the second time (supported by a grant from the Global Health Initiative). This will supplement the money that has already been paid back into the revolving loan fund.
By incorporating as a 501(c)(3) organization, we hope that we can continue to supplement the loan fund that now exists with additional contributions.