FONKOZE

Meet FONKOZE: Haiti’s Alternative Bank for the Organized Poor

Fonkoze is a bank the poor can call their own: Haiti’s Alternative Bank for the Organized Poor. It is the largest microfinance institution in Haiti and offers a full range of financial and educational services to the Country’s poor, primarily outside of the urban centre.

Fonkoze is committed to democratizing economic and social opportunities for the poor communities of Haiti, the Western Hemisphere’s poorest country.

The word “Fonkoze” is an abbreviation of Fondasyon Kole Zepòl, which means the “Shoulder to Shoulder Foundation” in Creole Fonkoze was founded in 1994 by Fr. Joseph Philippe, a Spiritan priest, and a group of grass roots leaders.

Anne Hastings arrived in Haiti in 1996 as the Executor Director and launched the first branch. Today Fonkoze operates 36 branches throughout Haiti that serve over 50,000 borrowers and 170,000 total clients. The Fonkoze Family encompasses four entities, three of which are operating companies: Fonkoze, (referred to as “the Foundation”), a Haitian Foundation, Sèvis Finansye Fonkoze S.A. (“Fonkoze Financial Services” in English) or “SFF”, a Haitian non‐bank financial institution, and Fonkoze USA, a 501(c)(3) non‐profit organization incorporated in the United States of America. The fourth entity is a Haitian holding company, Fonkoze S.A., which owns 99.9% of the operating company SFF, and has no operations or other significant assets.

Project Objectives

The main objective for the consultancy project was to develop tools to help Management for efficiency and profitability, and to assist Fonkoze (SFF and Foundation) to increase its efficiency by addressing product pricing, risk management and process efficiency.

Set up of the Project

  • 1. Analyze the existing lending procedures, the procedures around deposits, withdrawals, remittance payments, and currency exchange transactions
  • 2. Analyze the process of Banking Products. Basis for the analysis of the process will be an activity-based costing (ABC) derived analysis of the two products. A dedicated staff of Fonkoze accompanied the ABC activity, receiving on-the-job training in the method and the used tool. After the activity, Fonkoze will be in a position to carry out the costing exercise independently in the future.
  • 3. Analyze other factors related to the efficiency of the loan process. These may comprise:
    • Staff incentive schemes
    • Capacity Utilization analysis (productivity per Loan Officer)
    • Product development based on improvements of lending procedures
    • Method and extent of risk analysis (Microsave Matrix)
    • Use of profit centre concepts and transparency of information to staff to increase efficiency
    • Other factors that come to the attention of the consultant
  • 4. Analyze the processes and cost around the transformation of Foundation Branches to Bank Branches.
  • 5. Analyze the changes of processes and resulting efficiency increases through the introduction of Point of Sales systems (provided that this introduction is during the timeframe of the project.
  • 6. Present and discuss the findings with the senior management and board members in a workshop, and develop an implementation plan of agreed improvements.
  • 7. Follow-up on the implementation of the agreed improvements.
    • Immediately after the workshop, this will comprise assistance in the adjustment of procedures, as well as other tasks resulting from the workshop.
    • The Consultant will also carry out a training of loan officers and other concerned staff to introduce the changes to procedures.

back

Productivity Project

  • Productivity is common known as an overall measure of the ability to produce a good or service. More specifically, productivity is the measure of how specified resources are managed to accomplish timely objectives as stated in terms of quantity and quality.
  • Productivity may also be defined as an index that measures output (goods and services) relative to the input (labor, materials, energy, etc., used to produce the output). In finance, the two primary inputs are human resources and financial resources which are used to achieve specific outputs, such as portfolio amount, number of clients and credits and income.
  • Productivity in microfinance is measured using ratios of performance, outputs (numerator) per input (denominator: staff or loan officers).     

To What Extend Decentralize?

  • Sometimes people think – wrongly – that decentralization means automatically pushing all decisions lower in the organization, whether or not the people at the bottom have the skills to make the decisions wisely.
  • Besides, some decisions often need to be centralize, especially those who needs experience, special skills and knowledge to make the right choice. However, even in such cases a business may benefit from developing good decision-making capabilities in more people.     

Productivity Improvement Clients