KOFAEL – The Poor Will Be Glad

People who are treated as helpless come to hold a lesser view of themselves. People who believe they are “blessed to be a blessing” and not in need themselves come to a lesser view of the people they serve. These victim and savior complexes create a co-dependency that perpetuates the problems of poverty and far outweighs any temporary relief such missions provide…Poor people understand that getting help requires appearing helpless, and rich people unwittingly advance the helplessness of those they serve by seeing them as objects of charity, not equals (Greer and Smith 53-4).

A little while ago Eric came in after climbing the hill behind our house to check on a teenage girl with a life threatening medical condition. I asked him about the girl and after giving me the report he sighed and said, “seven”. Seven people stopped him to ask for money, food, and medicine on his short decent home. This makes us so sad. Not just because our neighbors are so poor or because we are so sick of so many “give me’s” (view the last post on that subject HERE)  but because we see the paralyzing effects that come from simply providing handouts which keep the poor in a position of helplessness and rob them of dignity, responsibility, and equality. Because we have seen the difference.

A helpful first step in thinking about working with the poor in any context is to discern whether the situation calls for relief, development, or some combination of the two. Both relief and development can be appropriate interventions, but if we sustain relief efforts instead of transitioning to longer-term development, we hurt the very people we are trying to help. Our desire is to see the church move from well-intentioned blunders to thoughtful compassionate acts of mercy that result in lasting change (56, 58, 60).

It was this same shared desire that birthed KOFAEL, the Haitian women’s mirco-finance program we have been working to progress alongside Haitian partners and founders Frantz and Julienne Osier. Progress seems to come slowly as we painstakingly and prayerfully discern how to transition from relief to development with many twists and tweaks along the way. Slowly and steadily the program has come a long way since my initiation three and a half years ago. We have learned so much. We have much to learn.

Last summer I discovered and quickly devoured the book The Poor Will Be Glad by Peter Greer and Phil Smith from which I am quoting. This book has been a great encouragement that KOFAEL has been headed in the right direction from its inception, a great resource for how we can continue to grow towards sustainability and a reminder that this program is not the end product, nor a total solution. It is simply an opportunity.

Unlike other forms of aid, microfinance is not an end product. While a bag of rice is the solution for immediate hunger, microfinance is an opportunity, not a total solution. Microfinance is a single step – albeit a very important one – in the process of poverty alleviation. Asserting that the goal of microfinance is poverty alleviation is quite different from asserting that the goal is poverty eradication. Would a 100 percent increase in an income of $1 per day eradicate a family’s poverty? Or would even a 500 percent increase? No, but it would alleviate their poverty and make their lives much better. For people earning a dollar a day, a second dollar can make a huge difference — pocket change to us, but the world to them (110-11).

I have never received a “give me” request/demand from any of the women in our KOFAEL program since my first meeting in October 2011. This says a lot about the program and the mentality of our Haitian leadership. However, I’m not ignorantly suggesting that if you happened to pass one of the KOFAEL women on the street that you could avoid the “give me”. Culturally it is considered stupid to not play that card when given an opportunity. But they know that KOFAEL is not THAT kind of opportunity. They are starting over with a new hand. Success is determined by how well they play their hand but also dependent on the draw dealt to them. Sometimes women who come to us needing immediate relief don’t have the experience to play very well. Sometimes they have the experience but their deck falls short of decent cards (for ex: personal or family health crisis, natural disaster, theft, government intervention on where sales can take place, increased travel distance and product pricing). There are several key factors that determine a chance for success. Not playing at all is a certain loss. Through KOFAEL the women are learning how to live beyond the hope of a handout, that the hand they play today affects tomorrow and that tomorrow matters. A paradigm shift has to happen in order for this to actualize because…

“For many in the developing world, everything revolves around today. What will I eat today? What will I wear today? Where will I find employment today? Beginning to accumulate savings helps shift an individual’s focus from today to tomorrow (85).”

KOFAEL has been working to educate its members on budgeting and saving in addition to growing their small businesses through their micro loans. Saving money in a place like Haiti is much easier said than done. Having any money to save in the first place is a great challenge. Finding a safe place where the money will still be there tomorrow is an even greater challenge. Imagine that you live in a tent with a dirt floor. Perhaps you could bury your money but that won’t work during rainy season. Your sister’s baby is sick, your brother broke his arm and can’t plough the field, the family is taking up a collection for your aunt’s funeral expenses, your church’s roof recently blew off in a storm and the pastor is going door to door taking up donations. Societal and family pressures such as these make it nearly impossible for our women to save money for budgeted necessities nor the unforeseen but realistically certain emergency that awaits tomorrow.

KOFAEL has recently experienced extreme challenges in this area causing us to take a harder look at how we help the women to handle their savings and give them a better chance of surviving beyond today. We have known for quite some time that we need to make some necessary changes to the program but have been praying about the right time to do so. The difficulty was that we have not yet cycled through all of the members that first started the program under their initial loan contracts. We debated starting different contracts with just the newest members but felt that would be too confusing. However, we have now found it necessary to interrupt the current loans on all members, make changes for the betterment of the whole group, and revise all contracts (just moving on from where each individual stands currently in the program). Only once before in the past three years have we had issues with women not repaying their loans and that was due to a hurricane wiping out their homes containing the merchandise they had just purchased in bulk with their loan money to sell. We were able to continue to help them through that time and they remained in the program. Emergency funds are essential to survival. In the past an emergency fund was more of a suggestion than an enforced requirement due to the way the initial contracts had been set up. The leadership of KOFAEL knew the day was coming that we would need to enforce this but how and when was the question. That day has arrived.

The past few months have been discouraging for KOFAEL but in hindsight we are thankful for the lessons learned. Several women who had previously been doing well seemingly abandoned the program and were nowhere to be found. We have finally located or found information on a few of them who have reportedly moved away or have suffered from personal or family illness that caused them to not be able to work. When the money that should have ONLY been used for their business purchases was misused for doctors and medicines they feared coming back to the program empty handed. These challenges are common and somewhat expected but the losses from them are even more challenging to recover. Because KOFAEL is not in the business of giving hand outs and the only way to ensure program success and future sustainability is for everyone to repay their loans on time, it affects everyone negatively when that many people have defaulted on their loans. The women have had to learn this the hard way. Our February meeting was not a fun one. The leadership had to inform the faithful members (those who had faced the same challenges yet continued to communicate, attend monthly meetings, and pay back their loans) that they would not be receiving their next loan installments even though they were due to receive them. We honestly explained the situation that the Port au Prince program has enough money to sustain loans for all members continually ONLY IF ALL MEMBERS PAID BACK THEIR LOANS.

When one person doesn’t pay the next person doesn’t get. That’s the way it goes. They are responsible to each other. So we told the women that if they wanted their next installment they needed to install some social pressure and go find the missing women. That’s how we found the few that had not moved far away. The women are also supposed to be paying into their savings accounts each month that we keep for them until the end of the program. This is incentive to pay back their final loan as well and protection for the program that they will if we are holding their savings. However, if they have not put in enough savings to make this worthwhile, why not just abandon as several have recently done? We had warned our Haitian directors often about this telling them that this was bound to happen soon if they did not start requiring that the women put more into savings. The challenge goes beyond a few members skipping meetings and not being able to pay back their loans for whatever reason. The root of the problem is poverty. Although we know that poverty will never be eradicated completely in this present world, our goal is to alleviate it as much as possible. Before it seemed that charging interest on the women’s loans was an impossibly cruel request. I don’t know of any other micro funding organizations that don’t charge interest and I understand why.

You need to if you are going to be fully self sustaining. However, KOFAEL is not like most other micro funding organizations in that we typically will take the women being turned away by other programs.  They are the poorest of the poor and for the majority KOFAEL is their last hope to keep their families together. Our hope is to help them move beyond needing desperate relief toward development so that they can graduate to the next step and possibly be accepted into one of the larger micro funding programs if they so choose. We need to do better to prepare them for the real business world where no bank or loan shark is going to give them a free pass. We are learning through experience that charging interest to both prepare and protect the program is essential. So, after praying, meeting, discussing, praying, and more discussing the leadership has decided upon some major changes that the women have since agreed upon enthusiastically as well. We informed the KOFAEL women of the upcoming changes at the March meeting and asked for their opinions because this is THEIR program. There was much discussion and dramatic debate until everyone understood that the reasons and intentions were positives not punishments. The following are the changes we will begin to implement at the April meeting the end of this month with revised contracts for all KOFAEL members.

  • First (small) loan installment: 3% interest charged on each month’s payment.
  • 2nd (medium) loan installment: 6% interest charged on each month’s payment.
  • 3rd (large) loan installment: 9% interest charged on each month’s payment.

All interest earned will be kept by KOFAEL in a savings account and will go back to each woman when she graduates the program. This system does several things to alleviate the problems our former system enabled. We are still able to give loans at 0% but with a required percentage going into a savings account designed to protect individual participants and the program as a whole. The women see the benefit of this system after being punished because someone else defaulted on their loans. Now if a member defaults, we will be able to roll her interest savings to cover the loss of her loan and protect other members from personal loss. Members who complete the program will have saved an amount equal to the 3rd large loan (previous savings when no interest was charged were only amounting to the first small loan) and will receive this to move forward and continue to build her business upon graduation. If there is a personal or family emergency that would prohibit a member from working and paying back her loan, she should communicate the specifics of the situation with the KOFAEL directors for help. If is it deemed necessary she can also apply to receive some of her accumulated savings upon approval. However, we are not in favor of dispersing savings accounts before a member graduates the program if it can be helped. Our next step is to take measures to help with the dire need of medical care as this is the #1 cause for defaulting on loans.

Medical care is very expensive in Haiti. One trip to the hospital and her entire loan and all profits are gone, plus she has most likely gone into debt. But what else can she do? This issue is of serious concern for all members who know the reality of inevitable sickness all too well. We have already watched members and family members die before they graduate. Over the past year we have been researching and physically checking out every possibility we can find in Haiti to help our women with medical care through a health insurance policy for KOFAEL members. But we are a small organization helping the poorest of the poor and there are not many options willing to help. In fact after a year of searching we have found only one that has agreed to work with our Port au Prince group. It is the DASH (Development Activities and Services for Health) program,” a Haitian NGO health provider that will offer a market-based, low-cost, pre-paid health card to serve 100,000 low-income Haitians with limited access to quality basic health care. The health services will be made accessible in the densely populated low-income neighborhoods of Port-au-Prince, where DASH has medical facilities…” We can acquire health services for our KOFAEL members at $10 (US) per woman per month. Insurance that would include their family members will be around triple this amount. Family insurance is highly desirable but at this point we do not see that as a near future possibility due to limited financial resources. Our women are already stretched to the max to be able to pay their loans and with the new interest/savings accounts will be stretched even more. Asking them to pay another $10 per month is more than they can afford. We have 50 women in our program and paying 50 x $10 totaling $500 monthly is definitely not a cost the program can afford. And yet how can we afford not to? So at this time we have proposed that DASH health services can be purchased optionally with members paying 50% at $5 per month rolled into their loan payment for those who choose this. KOFAEL would like to be able to offset the remaining 50% ($5 per month per woman) of the cost to make this much needed option affordably available to the women. We will need help to do this through donations by monthly or one time sponsors. Can you imagine that only $5 per month could help provide health care for a Haitian mom or grandmother to help keep her healthy and able to continue providing for her family? This would be $250 per month we would need to raise for all 50 women. For the time being we are testing the waters in this area to see how the women will benefit from the DASH program and will be asking for contributions of $60 for a yearly sponsorship ($5 x 12 months) for each woman that signs up this month for the optional insurance. Teaching the women about things like insurance has been another way they are learning to think about and prepare for tomorrow.

KOFAEL is now beginning to train those who have modeled success throughout the program to teach the next group of learners how to do the same. Here is one of our graduates sharing her experiences with the KOFAEL women at one of our monthly meetings.

A wise woman (Eleanor Turbull who has been a missionary in Haiti for 70 years) once shared with me, “Don’t learn the Haitian’s language so you can talk to the people. Learn their language so you can listen to the people!”

“How much time is spent diagnosing the causes before imposing solutions? How much time is spent listening to the people we are seeking to serve and developing strong enough relationships so that we can hear their voices? (55)” We pray we have listened well.

In summary here are some specifics we have been praying through over the past year for the KOFAEL program and would love your prayers and support as we move forward.

Keeping it small for the time being with the Port au Prince program as our main focus before trying to move forward with our second program in Trou du Nord (near Cap Haitian which is a six hour bus ride from Port au Prince). I made a trip with our Haitian director Frantz to Trou du Nord last November to assess the situation and Frantz continues to make trips each month to check on the current waiting women. We feel that until a Haitian director who lives in that area can be trusted and trained specifically for the needs of that group we cannot fully move forward and will just continue to patiently wait and pray for the right timing, financial provision and leadership to progress.

We received discouraging news that none of grants we spent a good deal of time and finances applying for were approved with no reasons given as to why. We had hoped to be able to move forward more quickly with the Trou du Nord program, hiring a few of our top KOFAEL graduate leaders to help run the growing Port au Prince programs, funding our minimal admin costs, at least cover the travel expenses of our volunteer leadership, and helping the women with health insurance costs. Receiving even one of the grants we applied for would have helped the program so very much with all of these things. Our mission organization/501c3 that KOFAEL is under is planning to try again with grant applications now that we have some experience under our belts in this area.

We are trusting the Lord in His timing and that keeping KOFAEL small and successful vs. growing too fast without sustainability is for everyone’s good.

Telling women about the lost members and money and not giving more loans out until a solution was agreed upon for how to proceed after these losses was very difficult. We cannot afford to waste limited resources. Each member has something to give and some responsibility to use their resources to serve. What one person does affects another. We are praying these are lessons well learned and continue to praying for protection over the missing members and provision for everyone. Please pray with us as we move forward with the revised loans this month that the process with go smoothly and alleviate some of the past struggles.

Out of the sadness of the lost members and lost money came the greatest joy at the end of the day. We were able to share the plan of salvation in Christ alone with a KOFAEL member who accepted her free gift of eternal life. This joyous occasion happened directly after the February Kofael meeting where we broke the bad news to the women. It reminded us of why we are here. We are not the solution. We are here to share about the One who is the solution and look for every opportunity to share Him! What one does with a life changing opportunity like microfinance in Haiti, or the ultimate life changing opportunity to know and follow Jesus is not up to us, but the responsibility of sharing because we know Him and care about them is up to us.

We praise God that some of the missing women were searched out and found and remember how God has done this in our lives as well.
We praise God that there was a unanimous positive response by the women toward the new implementations decided upon for their benefit and program success.

We praise God for our sweet Canadian friends who care about and recently donated to KOFAEL.

Thank you for reading this long update and praying with us for this ministry!

“The poor will see and be glad–you who seek God, may your hearts live!” Psalm 69:32



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