In 2020, the Raising Haiti Foundation began funding the provision of small loans ($25-$50) to 50 women clients per community. By July 2024, the program had grown to a total of 426 beneficiaries who received loans in the $76 to $1,132 range. By the end of 2024, the program will expand to enroll 500 clients, with an increasing loan range.
Most of the women use their loans to become entrepreneurs, or to expand their current businesses, selling goods in local markets. Some use them to purchase livestock or crop seeds, improving their farming outputs. Besides loans, the women receive training on topics such as business management, customer satisfaction, how to avoid supply shortages, and the role of local leaders in community development.
what’s the interest rate?
This always bothered me about Kiva.org. My money provides the collateral to secure loans for people that would have difficulty getting a loan otherwise. All good so far. But then the loan company charges 20%+ of interest. Wtf? I have already collateralized the loan, why are they still charging that level of interest?
20-40% is still okay. Payday loans in those amounts are usually 200-400% (APR) in the US, or even twice that. In Haiti the official interest rate has been ~7-30%, now 17%. Real interest rate seems to be -14% at the moment because of inflation, historically it was ~7% to 0%.
So 20% is actually an amazing deal, especially if you consider that processing costs are much higher for micro loans, proportionally speaking.
Whoever is handing out these loans must barely be making a profit at all. I assume they are non-profit?
But I’m not sure how it works in detail, it might be a different picture with dollar loans.
It says “low interest” on their website: https://www.smallholderfarmersalliance.org/programs
They’ve had 100% repayment rate for over a decade. One of the quirks of the program is that women band together with other women to ensure the loan is paid back. The maximum loan term duration is 6 months.
NB: All of this information is from the alliance. I haven’t seen anything from a third party to verify the claims.
All those subprime lenders had to go somewhere where there isn’t as much regulation…