Georgianne Nienaber is back with a long, well-researched article in LA Progressive.com: Are Haiti's Cholera Victims Warren Buffett's "Girls in the Convertible?" Excerpt (read the whole piece to learn what the title means):
Fonkoze is Haiti’s largest micro finance organization. Founded in 1994 as Fondasyon Kole Zépol by Father Joseph Philippe, the Grameen Foundation recipient currently has 50,533 women borrowers with an outstanding loan balance of 409,376,655 (HTG Haitian Gourdes) or US $10,021,257.
The Grameen Foundation has been supporting microfinance activities in Haiti since 2003. It has no formal ties with the Grameen Bank, which was started in 1976 in Bangladesh as a means of supplying small loans (micro-credit) to the poor who had no collateral. Grameen gives Fonkoze high marks and positive assessments for its work in Haiti.
Within 24 hours of the January 12, 2010 earthquake that paralyzed Haiti, Fonkoze mobilized and was able to secure approval to acquire $2 million of cash from accounts in the City National Bank of New Jersey. The money was shipped to Haiti on a US military C-17, providing critical cash infusion for members. Haiti’s major banking institutions were shut down and cash was virtually unavailable.
Swiss Re is also partnered with Fonkoze in a natural catastrophe micro insurance program that provides protection to women clients against work losses due to earthquakes, floods and hurricanes. The policy paid out following very heavy rains in late May and early June 2012[sic] in the southwest part of Haiti. A total of 3,815 clients received insurance benefits, according to James Kurz, Fonkoze’s senior financial analyst.
Kurz explained in an email that the price of the current work loss policy is 3% of the value of the client’s loan. “They pay the premium at the time of the disbursement. So for example, a client taking a $250 loan would pay $7.50 when they receive their loan.”
The actual price of the insurance is about 5% of the value of the loan, so Fonkoze is currently subsidizing a portion of the price. “We are working on lowering the cost and setting a roadmap to decrease the subsidy over time,” Kurz said.
Under the current plan, if a client made payments AFTER the catastrophic event and is eligible, she receives reimbursement of those payments. She does not receive reimbursement of payments made before the event. The policies covers damage to the clients’ home, business assets and inventory. A qualifying claim results in: repayment of the client’s outstanding loan balance; a $125 cash payout to help with emergency expenses; and a new loan if and when the client is ready, Kurz said.
The other insurance Fonkoze offers is credit/life. “If a client dies, their loan is forgiven and their beneficiary receives a $125 cash payout,” Kurz added. The current catastrophic policy does not include cholera insurance, which is still under development.
“The commitment that the partners made at CGI was to develop a cholera product, test it, roll it out with Fonkoze’s clients, and then share the results with the world,” Kurz says. That means that it is very early. We don’t know exactly how the product will work, or what the price will be.”
