Adapting to Adversity: Rural Population and KPPP Members Cope through Phase 3 of 'Peyi Lok'
Creating economic prosperity for all of Haiti’s citizens remains a challenge today. Haiti is the poorest country in the Western Hemisphere, with 59 percent of the population living below the national poverty line of US $2.41 per day, according to the most recent household survey (2012), and only 13 percent of the labor force in the formal sector. Despite this, World Council of Credit Unions’ (WOCCU) experience in Haiti demonstrates that Haitians do have money to save, even if deposits are small. However, accessing financial services poses another layer of challenges. Reaching a financial institution requires paying high transport costs, as services are several hours away and concentrated in the main cities. Furthermore, financial institutions often lack liquidity and the capital needed to introduce new products and services tailored to both meet client demand and attract new clients to the sector.
WOCCU has been working on increasing financial inclusion in Haiti for over nine years. This effort has culminated in the Accessible Finance Activity, funded by the United States Agency for International Development (USAID). This program supports both USAID’s objective of promoting a stable and economically viable Haiti, and the Central Bank of Haiti’s goal of creating a financially and economically more inclusive society by ensuring the greatest possible access to savings, credit, and other financial products and services. Building on knowledge gained under USAID’s previous financial inclusion project, HIFIVE implemented by WOCCU, the Accessible Finance Activity tackles financial access challenges through two primary objectives:
Expand financial services and products to rural areas through established groups and digital financial services (mainly field officer banking methodology).
Sustainably address liquidity and capital challengesfaced by microfinance institutions (MFIs) and credit unions.
Under objective 1, WOCCU is piloting its Field Officer Banking methodology —developed and tested in several Latin American countries—with CPF, SOCOLAVIM and LE LEVIER federation of credit unions in Haiti. Through field officer banking, branded as Kes Pam Pi Pre’m (KPPP) in Haiti, or ‘My Credit Union Close to Me’ in English, Rural Agents from formal financial institutions use motorbikes to reach rural areas, bringing financial services through smartphones or tablets with portable printers.
Rural Agents meet with members in person to collect deposits, process loan applications and payments, and sign up new members. Utilizing digital channels reduces transaction costs for both clients and financial institutions and increases transparency through digital receipts. With direct access to accounts through the smartphone or tablet, financial institutions can offer clients individual accounts, rather than the traditional group accounts and guarantees—enabling clients to have a direct relationship with financial institutions to start building credit history and access an array of products that meet their individual needs.
Under objective 2, WOCCU addresses liquidity and capital challenges faced by MFIs and credit unions through savings and investment mobilization. The program is working with the national association of credit unions, Association Nationale des Caisses Populaires haïtiennes (ANACAPH), an affiliate member of WOCCU, to identify and recommend client-driven deposit products, policies, and mobilization strategies. WOCCU is also partnering with SSG Advisors/Resonance to pilot its Sustainable Investment Facilitation Toolkit (SIFT) with FINCA Haiti to support capital-raising efforts.
During Q4 FY20, KPPP services were maintained with added public health measures related to the COVID-19 pandemic. For example, working hours were reduced and a rule of a maximum of 10 members at each group meeting was enforced. All partners maintained the public health measures related to the pandemic, as instructed by the Haiti Government authorities since March 2020. This led financial institution partners to slow down their planned project activities to focus on critical COVID-19 response activities, including reviewing organizational plans to protect staff and members while maintaining services as much as feasible.
As of September 2020, KPPP pilot credit unions are serving 289 groups, with 4,157 members, of which 62% are women. Despite a challenging environment of unrest and the onset of COVID-19, KPPP service has been maintained. Loans outstanding have regained volume, specifically for the SOCOLAVIM credit union in Artibonite; in the North, the CPF credit union continues to intensively manage recovery of loans and has not been issuing new loans. Outstanding loans during Q4 FY20 amounted to HTG 5,133,042 in Haitian Gourdes (HTG)(USD 76,613), an increase of 38% from last quarter.
In this quarter, savings increased by 39% to HTG 23,887,289 (USD 356,527). Despite the challenging economic environment and pandemic, members remain conscious of the importance of saving money for unexpected situations; in fact, members report that KPPP has helped them to save and cope with these conditions of unrest. The field officer banking methodology is based on demonstrating the value of saving money over the long run, even if in small amounts. Even in this context, the methodology proves effective in educating and supporting people with adopting wise decisions for their future.
Moreover, rural agents resumed the financial education training in this quarter.105 groups benefited from this training in Q4 FY20; 27 of the KPPP groups were CPF members and 78 were SOCOLAVIM members. A total of 1,175 participants attended the training sessions.
During Q4 FY20, Intermediary Agents and LE LEVIER staff completed planned training on the related application. Due to the insecurity prevailing in Gonaïves, only LE LEVIER staff were to then replicate the training locally with Intermediary Agents. The launching of the Intermediary Agent component of field officer banking is still pending due to technical issues that remain to be solved and the conditions of insecurity. A this stage, 8 Intermediary Agents are anticipated to launch by the end of the project.
Furthermore, Association Nationale des Caisses Populaires Haïtiennes (ANACAPH) continues to carry on the implementation of the marketing and communications plans for credit unions. In Q4 FY20, 21 participating credit unions completed their marketing and communication plans and 5 credit unions are in the process of launching their new savings products.
The Accessible Finance project is preparing to host a virtual closeout event in November with partners and stakeholders to reflect on project results, lessons learned, and the continuity of positive impact.